A unit at G Street Apartments, a Sanford Capital property in Southeast D.C. Credit: Darrow Montgomery

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A D.C.-based organization is adding to the pile of litigation against Sanford Capital, a landlord that owns and manages hundreds of apartments housing low-income and working-class tenants.

Through private and nonprofit attorneys, the Equal Rights Center, a civil rights group, has filed a new lawsuit against the Bethesda-based company in D.C. Superior Court. The complaint alleges that Sanford illegally refuses to lease apartments at one of its largest complexes to residents who rely on temporary rental subsidies, including veterans and their families. The D.C. Human Rights Act prohibits housing discrimination on the basis of income—even if the source of that income is government-provided benefits, the group’s lawyers say. Morrison & Foerster LLP and the Washington Lawyers’ Committee for Civil Rights and Urban Affairs are representing the ERC.

The property in question is called Belmont Crossing, and is comprised of 275 units spread across 25 buildings. The complex winds along Barnaby Road and 7th Street SE.

Named as defendants in the lawsuit are parent company Sanford Capital LLC, management arm Oakmont Management Group, and affiliate Belmont Crossing Apartments LLC. “Defendants’ employees and/or agents told an ERC tester and a Housing Counseling Services case manager who called the property that they do not accept any temporary subsidies, including [Supportive Services for Veteran Families Rapid Rehousing Assistance],” the suit states. “[This] policy or practice…therefore constitutes unlawful source of income discrimination under the DCHRA.” (Housing Counseling Services is a nonprofit advocacy group based in the District that gets funding from both the public and private sources.)

Stephen Hessler, an attorney who represents Sanford Capital in other cases against the company, declined to comment.

Purchased in 2015, Belmont Crossing is Sanford Capital’s most recent D.C. acquisition. Since then, the property has been plagued by raw sewage flooding both occupied and vacant units, among other problems typical of Sanford properties: broken locks, squatters, and pests. Since 2006, Sanford has bought more than 65 buildings in Southeast, Northeast, and Northwest.

ERC’s case in part highlights D.C.’s severe shortage of safe, decent, affordable housing. Even when low-income and voucher tenants do find apartments in the District, the conditions at those units and buildings can be distressed.

In mid-March, D.C.’s Department of Consumer and Regulatory Affairs inspected almost 60 units at the property, following an order by Mayor Muriel Bowser to inspect all Sanford properties, and found more than 160 violations of the District’s housing code at Belmont Crossing alone. This amounted to thousands of dollars in possible civil fines. Sanford Capital has appealed all 1,083 housing code violations DCRA found at its properties this yearthe equivalent of roughly $540,000 in potential fines. Earlier this month, the company won a temporary victory in administrative court by convincing a judge to delay hearings until late July and early August.

Tenants of Belmont Crossing have told City Paper that the rental office closes unexpectedly and that they get intimidating notices on their doors. They also recall that Sanford removed landscaping, benches, and a playground that used to be at the complex before the company took control of it.

In its filings, the ERC explains that it performed a “civil rights test” on the property after a Housing Counseling Services staffer who was helping a homeless veteran find housing with an SSFV voucher was told by an Oakmont representative in 2016 that Belmont Crossing did not accept temporary subsidies. Then, an ERC tester posing as a potential tenant using the same kind of voucher was told by a different Oakmont representative that the management did not accept any short-term rental subsidies. (ERC says the veteran happened to die on the same day as the test was done.)

“By filing this action, we hope to put more housing providers on notice that this type of discrimination is illegal and will not be tolerated,” ERC Executive Director Melvina Ford says in a statement. She adds that many voucher holders are at significant risk of becoming homeless.

The new lawsuit comes as the District pursues two ongoing lawsuits against Sanford Capital over separate complexes it owns in Ward 8. One case, involving the company’s 61-unit Terrace Manor complex, is both in D.C. Superior Court and U.S. Bankruptcy Court because the Sanford affiliate that governs the property has filed for Chapter 11 bankruptcy in the hopes of selling it to a third-party buyer for $5.8 million. While the bankruptcy proceeds, attorneys for the District and for the company have agreed to appoint an outside expert called a receiver to assess code and safety issues at Terrace Manor, file a report on them, and conduct repairs. If the affiliate achieves bankruptcy, it will have avoided the tenant association’s right to buy the property under D.C. law.

The other case, which entails a collection of buildings above the Congress Heights Metro station, is entirely within the Superior Court’s purview. A status hearing on both cases is set for late June. D.C. Attorney General Karl Racine brought the two civil complaints over the course of last year. Racine’s office declined to comment because it is not a party to the case.

City Paper reporting earlier this year revealed that Oakmont Management had filed 95 eviction lawsuits against Belmont Crossing tenants for non-payment of rent. Most of these cases were filed in a single day about three months after Sanford Capital purchased the complex. And while the company allegedly denies housing to voucher tenants at Belmont Crossing, it has filled other properties it owns with upwards of 300 low-income voucher holders and the formerly homeless, guaranteeing itself at least an estimated $3.7 million a year in subsidies bankrolled by taxpayers. 

This also isn’t the only housing case that the ERC has launched in recent months. In April, the group sued long-time D.C. landlord the Lenkin Company for allegedly denying voucher-holders apartments in four of its buildings. That case, also filed in D.C. Superior Court, remains pending.