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Facing $800,000 budget deficit, Annapolis housing authority director pleads for help over inspection fines

Melissa Maddox-Evans, who has led the agency since 2019, has asked the city to temporarily waive all fines stemming from the ongoing inspections of public housing properties between March 2020 to December 2022.
Melissa Maddox-Evans, who has led the agency since 2019, has asked the city to temporarily waive all fines stemming from the ongoing inspections of public housing properties between March 2020 to December 2022. (Joshua McKerrow/Capital Gazette)

Facing a nearly $800,000 budget deficit due to unpaid rent, the Annapolis housing authority’s director made an impassioned plea to elected officials this week to help curb a rising tide of inspection fines that she says is worsening the agency’s financial health.

In all, about $18,000 in fines dating back to last year have been issued by city inspectors to the Housing Authority of the City of Annapolis for violations inside units like deactivated or removed smoke detectors, housekeeping issues, general damage, resident-installed locks or similar violations, said Director Melissa Maddox-Evans in a seven-page prepared statement to Mayor Gavin Buckley and the Annapolis City Council on Monday night.

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Maddox-Evans, who has led the agency since 2019, asked the city to temporarily waive all fines stemming from the ongoing inspections of public housing properties between March 2020 to December 2022.

The fines, which were later reduced to $1,500 by a judge, and the resultant time and legal fees that come from the housing authority fighting them in court, place an “incredible fiscal and administration burden” on her agency, Maddox-Evans said. Such a waiver would not have any adverse effect on tenants because the agency would continue its compliance and repair obligations, she said.

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In addition to the fines, the housing authority currently has a nearly $800,000 budget shortfall due to uncollected rent during the pandemic, equal to about 23% of its annual maintenance budget.

The U.S. Department of Housing and Urban Development, the federal agency that oversees the housing authority, will not be providing additional funding to the agency, she said. Thus every dollar the housing authority has should be directed toward bridging that shortfall.

“I am coming to you to respectfully request that if the city cannot agree to be part of the solution, that it stop making things worse for HACA,” she said.

The city cannot stop inspections or waive fines for violations because city inspectors must treat the housing authority like every other private landlord in the city, said City Manager David Jarrell in an interview Tuesday.

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In 2019, the city was sued by more than 50 public housing residents, in part, because the city stopped inspecting public housing properties in late 2017. The plaintiffs also alleged decades of discrimination that resulted in unsafe living conditions and resultant negative health effects. The city settled for $900,000 and entered into a consent decree, which requires the city to follow rigorous legislative and policy guidelines. The housing authority also agreed to a separate $900,000 settlement and its own consent decree.

“When we do inspections, we cite them and when they don’t take care of the violations, they get fined, just like every other multifamily unit,” Jarrell said, and because it’s too difficult to determine who caused the violation, the landlord is accountable for the fines.

Several council members expressed their frustration at only finding out about the housing authority’s financial issues this week.

Alderwoman Sheila Finlayson, D-Ward 4, urged city staff to work with Maddox-Evans to find solutions. Others, including Alderman DaJuan Gay, D-Ward 6, said that the city wasn’t doing enough to be a partner with the housing authority.

Jarrell urged Maddox-Evans to take up the issue with the federal judge that oversees the consent decree. Because the city is bound by the agreement, it is unable to make unilateral changes to its inspections regime, he said.

On Monday, Maddox-Evans also described the agency’s current financial status, which has worsened during the coronavirus pandemic.

Rent collection has dropped by 30% over the last 20 months since COVID-19 reached Anne Arundel County in March 2020, resulting in a revenue loss of $788,031 in fiscal year 2021.

The budget shortfall could mean the housing authority may soon be unable to make payroll, and cost-saving measures like furloughs may need to be considered, Maddox-Evans said.

When asked if she would be able to make payroll through the end of the year, she said, “Yes, but barely,” before adding, “I don’t know for the next six months what that’s going to look like.”

Maddox-Evans has made several attempts to sound the alarm as the amount of unpaid rent grew, writing letters to politicians, housing advocates and community members warning of an impending wave of evictions. She has also urged residents to enter into payment plans, with little effect.

Mass evictions have been prevented, for now, thanks to a patchwork of eviction moratoria imposed at the federal and state level. Rental assistance programs, funded by money from multiple federal coronavirus aid packages, have also helped get rent money to residents who need it.

Anne Arundel County has put millions of CARES Act and American Rescue Plan Act money toward the Renter Eviction Avoidance Program, which contracts with Civil Justice, a nonprofit legal services group, to provide financial and legal help to renters who owe back rent.

That money, which totals in the millions of dollars, has been slow in reaching Annapolis public housing residents. One reason is because the housing authority is unable to provide personal information to rental assistance coordinators because the agency is bound by federal privacy statutes, Maddox-Evans said.

Those inflexible laws make it difficult to find residents who need assistance and get them into the system, said Lisa Sarro, general counsel for Arundel Community Development Services, which oversees the rental assistance program.

Instead, the program coordinators have to canvass, door-knock and use other time-consuming outreach methods to find eligible residents, something the housing authority has permitted them to do.

So far, the housing authority has received just under $53,000 in rental assistance for its residents. At such a rate, it would take years for the housing authority to balance its budget, Maddox-Evans said.

She has said that filing failure to pay rent actions against residents — the first steps toward eviction — is a last resort for the agency and a “fruitless process that is both cost and time-intensive.”

The housing authority does notify rental assistance groups when it has filed legal action against a tenant who is late on rent.

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That initiates a rushed process by Sarro and other coordinators to contact those tenants, register them into the program and fast-track rent money to them before an eviction takes place.

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“We have enough money to cover back rent for everyone who is eligible,” Sarro said. “We have millions (of dollars) left.”

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