Credit: Darrow Montgomery

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During her annual State of the District Address last night, Mayor Muriel Bowser had harsh words for Bethesda-based Sanford Capital, which owns about 20 distressed low-income properties amounting to more than 1,300 units across D.C. Substandard housing conditions are common at Sanford’s more than 65 buildings, and the company receives millions of dollars annually in taxpayer subsidies.

Bowser announced that the Department of Consumer and Regulatory Affairs has inspected all of Sanford Capital’s District properties—a review she commissioned at the beginning of March following investigations by City Paper and the Washington Post. She said none of the buildings would have to be condemned “and people made homeless,” but that “there are lots of [housing-code] violations, years in the making, that need immediate attention.”

“Like you, I was horrified to read residents’ complaints about apartments in buildings owned by Sanford Capital,” Bowser said. “They will have a choice … fix the violations … face nearly half a million dollars in fines … or see us in court. Lawyers in [D.C. Attorney General] Karl Racine‘s office and primed and ready to go.” In fact, by last October Racine had taken the company to court over two Ward 8 properties in deplorable condition.

DCRA’s recent review of Sanford’s properties turned up 1,083 housing-code violations, totaling $539,500 in potential fines. And although the agency has not yet levied those fines on the company—it has to reinspect properties first—Sanford has appealed all the citations in the Office of Administrative Hearings, note DCRA Director Melinda Bolling and Deputy Mayor for Planning and Economic Development Brian Kenner in an interview.

“Now, typically that doesn’t happen because the violation gives you an abatement period, a time to cure,” Bolling explained. “In these instances, it was either a one-day or a seven-day period. We’re absolutely confident that we [gave Sanford proper notice], because we served them electronically, in person, and via mail. So they just have to follow the process.”

Stephen Hessler, an attorney for the company, declined to comment Thursday afternoon, but did say in an email that he and his client “enjoy a good working relationship with DCRA and [the Office of the Attorney General] and shall continue in that direction.” For the two properties Racine has sued Sanford over, the company is accountable to court-monitored abatement plans that establish specific timeframes and parameters for resolving problems.

Whether the spotlight cast on Sanford Capital will improve the lives of its tenants remains to be seen. The company has routinely neglected to perform basic maintenance and left its renters, many of whom are on housing vouchers or transitioning out of homeless shelters, in the cold. Two weeks ago, a Sanford tenant told City Paper her heat was only fixed after DCRA came.

Kenner says none of the violations DCRA found during its recent wave of inspections “rose to the level of life-, safety-, or health-related” issues that would lead to shuttering a building. “That’s not to say we’re not vigorously moving forward to make sure those are addressed,” he points out. He adds that DCRA has provided Sanford recommendations on remediating housing-code violations but has not heard back from the company. Bolling says DCRA met with Sanford co-founder Aubrey Carter Nowell, Hessler, and a second attorney on March 21.

Last week, Racine proposed including Nowell as well as Sanford’s chief property manager as parties in one of the lawsuits against the company, which could put them personally on the hook for damages. The company’s other co-founder, Patrick B. Strauss, has avoided the District’s crosshairs, though City Paper found he and his wife, Mary J. Strauss, signed the vast majority of loan agreements for Sanford’s properties. Documents obtained by City Paper also show Patrick was directly involved in the company at least until the end of 2014. City Paper recently emailed Strauss at his Sanford Capital email address twice, and the emails did not produce a bounce-back message. Strauss did not respond to the emails or voicemails. 

Some advocates have called for harsher action against Sanford Capital and its negligent-landlord peers, such as placing properties in receivership, revoking business licenses, or scooping up private affordable housing. D.C. has an unimplemented law called the District Opportunity to Purchase Act that would allow it to do the latter. Bowser said in her State of the District Address that her administration would implement DOPA in the coming months.

Councilmembers have floated various solutions, like targeted inspections for buildings with significant numbers of voucher tenants, reforms to DCRA’s fine structure, and more-robust oversight. In a recent interview with City Paper, At-Large Councilmember Robert White, who sits on the housing committee, highlighted the careful line the District is toeing with delinquent landlords. “It’s easy to say the city shouldn’t do business with such companies, but none of us want to see people put out in the street,” White said. “I think receivership should be the first step. Fine them for every code violation, then they either pay the fines and bring deficiencies up to code—or they don’t, and [then] the city takes the property.”

“I don’t think anything is off the table,” Kenner says of the District’s options moving forward.

Beyond Sanford Capital, Kenner says Bowser will include an additional $300,000 for DCRA housing inspectors in her fiscal year 2018 budget proposal, which is enough funding for at least three full-time employees. Bowser will also propose an extra $1.2 million for the city’s nuisance abatement fund, he adds. The budget plan is due to the D.C. Council next week.

Jeff Anderson contributed reporting.