April 6, 2016 Nancie-Ann Bodell Director, Office of Asset Management U.S. Department of Housing and Urban Development 451 7th Street SW Washington, DC 20410 [email protected] VIA EMAIL Dear Ms. Bodell: We are attorneys throughout the country who work with community-based organizations and tenant associations to improve and preserve project-based Section 8 housing. We write to you today to share our collective experience attempting to ensure the right to organize outlined in 24 C.F.R. part 245, subpart B is protected. Too often, when asserting the right to organize, our clients have been met with resistance not only from property managers and owners, but also from U.S. Department of Housing and Urban Development (“HUD”) personnel and contract administrators. While this is a longstanding issue, a recent HUD-funded program that partners lawyers with organizers has resulted in increased awareness of violations of the right to organize and an increased number of complaints to HUD. The Right to Organize in 24 C.F.R. Part 245 Subpart B As you know, tenants in HUD multifamily housing have the right to establish and operate a tenant organization. HUD regulations recognize the importance of tenant participation in creating and maintaining good living environments. With the goal of cooperation in mind, ownership and management must recognize legitimate tenant organizations and organizing committees and not interfere with their creation or operation. These protections extend to tenant organizers as well. HUD regulations found at 24 CFR 245.115(a) provide that owners and property managers in covered properties must allow tenants and tenant organizers to conduct protected activities, including making contact with tenants, distributing flyers, and holding tenant organization meetings in an accessible room on site. 24 CFR 245.115(b). In addition to these enumerated activities, owners and management must allow tenants and tenant organizers to conduct other reasonable activities related to the establishment or operation of a tenant organization. Tenants and tenant organizers are not required to seek owner or management permission before engaging in any of these activities. 24 CFR 245.115(c). Additional information regarding the tenant participation requirements may be found at HUD Notice H 2016-05 and HUD Handbook 4381.5 REV-2 The Management Agent Handbook. Potential sanctions for interference with any of these protected activities include debarment, suspension, limited denial of participation, and civil monetary penalties. 2 CFR Parts 180 and 2424;

24 CFR 30.45. However, to our knowledge, none of these sanctions has ever been imposed on an owner as a result of interference with the right to organize. This is in part because local HUD offices have not issued any notices of violation, no matter how severe the violation. Widespread Interference with the Right to Organize in the VISTA Affordable Housing Preservation Project and other HUD Funded Programs In our experience, interference with the right to organize is a nationwide problem. In this letter, we are providing examples from six states illustrating the spectrum of violations throughout the country. Many of the attorneys who provided examples are participating in the Equal Justice Works VISTA Affordable Housing Preservation Project (“VAHPP”). This program is facilitated by Equal Justice Works and sponsored by HUD and the Corporation for National and Community Service. There are 12 legal fellows and 33 community organizers funded through this project nationwide, and many have already completed a year of service. This project is unique in that it brings lawyers and community organizers together to support tenants and tenant organizations in project-based Section 8 housing. The goal is to work with tenants to preserve and improve their housing throughout the country. Through the combination of legal and organizing support, the VAHPP legal fellows quickly learned that the right to organize outlined in 24 C.F.R. part 245 subpart B is frequently violated throughout the country. In addition to the VAHPP program, lawyers have worked with tenant organizers and tenant organizations experiencing interference for decades. Some of this organizing work has been historically funded through HUD, through the Tenant Resource Network or prior programs. We recognize and commend HUD’s commitment to tenant participation with these programs and seek to highlight the ways in which effective use of HUD’s resources are being impeded when the tenant participation requirements are not enforced. Examples of Interference in Illinois The VAHPP Legal Fellow at the Sargent Shriver National Center on Poverty Law filed an administrative complaint with HUD Region V citing years of interference with the tenant organization at a senior development in Peoria, IL. The tenants had documented years of interference, including numerous emails sent to HUD to which they received no response. The complaint included documentation from the property manager stating that the tenants could not hold an election and tenants were repeatedly denied use of the community room to hold an election. The complaint requested that an election be held immediately and that a management and occupancy review occur. Although HUD did intervene to ensure that an election was able to occur, HUD declined to conduct a management and occupancy review and its initial response put onerous restrictions on the tenants to conduct their election in a particular way, to draft new bylaws, and to submit regular reports to HUD on the contents of their organization. Further, HUD did not issue a notice of violation. As a result, the management company was not held accountable for its actions. More recently in Chicago, IL, organizers at the Kenwood-Oakland Community Organization were unable to schedule a meeting between a tenant organization and their property owner. After being ignored by ownership, the tenant association went to HUD for assistance in urging ownership and management to meet with their tenant organization. The tenants were referred to the contract administrator, National Housing Compliance. National Housing Compliance relayed the property owner’s wishes, which were for the tenants to set up individual appointments with the onsite property management to deal with their individual issues. Further, the Contract Administrator stated 2

that the property owner would not meet with residents if the community organizers were involved. Rather than reject the property owner’s request that non-tenant tenant organizers be excluded from tenant organization activities, the contract administrator simply reinforced his wishes despite their clear contradiction to HUD regulation. Examples of Interference in New York The VAHPP Legal Fellows at the Urban Justice Center based in New York City observed that tenant organizations are routinely denied access to on-site community rooms, making it nearly impossible for tenants to organize. For example, at a development in Brooklyn, NY, it took the VAHPP lawyer and organizer nearly a year for the owner to allow the tenants to meet in the on-site community space. The VAHPP lawyer and organizer had to enlist the assistance of a community development organization to broker a deal between the landlord, HUD, and the tenants solely for the purpose of allowing the tenants to meet and hold tenant organization meetings. In Brooklyn, New York, there is one large management company that proudly explains how property managers can thwart tenant organizing. Their policy, as listed on their website, states: Defusing of Tenant Organization - To discourage tenants from organizing into action groups, such situations are identified early and the leaders are spoken to individually and at length. The staff will resolve problems before they become building wide.1 This unambiguous policy brings into serious question this management company’s compliance with, and respect for, HUD’s regulations. In practice, this policy includes denying access to meeting space, demanding to see the list of tenants participating in tenant association meetings, and taking tenant association leaders to court on frivolous legal claims. Although the VAHPP Legal Fellows sent a letter to the management company and HUD explaining that this policy is in violation of 24 C.F.R. part 245 subpart B and asking for its removal, the posting remains. Example of Interference in Michigan In Detroit, Michigan, a VAHPP organizer and legal fellow began to engage tenants at an at-risk property. Immediately thereafter, the property management company implemented a new $40 room reservation fee for all groups to use the community room. This policy was a direct result of the organizers and lawyers attempting to engage tenants in the building, and an effort to make participation much more difficult. Michigan Legal Services wrote a letter to HUD documenting the retaliatory change in policy and requested that the tenant organization be allowed to use the community room for free. As of the date of this letter, Michigan Legal Services has not received a response and the retaliatory conduct of the management company has gone unchallenged. Example of Interference in Texas In Dallas, Texas, VAHPP organizers at the Texas Tenant Union were invited onto a property to assist multiple tenants in asserting their rights during the rehab of the property. On their way out of the development, the VAHPP organizers were confronted by the on-site property manager. The 1

http://www.sharpmgmtcorp.com/policies_defusing_of_tenant_organization.asp 3

property manager told them that they were not allowed on the property and, if they returned, the police would be called. When offered a copy of the regulations, the property manager stated that the decision was up to the owner, not HUD, and stated that she had spoken to some unnamed HUD official about the issue. With the assistance of a VAHPP lawyer, VAHPP organizers filed a complaint with HUD Region VI that had not been responded to by the date of this letter. Example of Interference in Ohio The Legal Aid Society of Southwest Ohio filed a complaint in the middle of very serious issues at a development in Cincinnati, OH. Management representatives denied the Tenant Organization access to the community room, attended a Tenant Organization meeting disguised as a resident, attempted to form a competing tenant organization under management control, and threatened tenant leaders with unlawful eviction. Further, members of the tenant organization who contacted the City with concerns about code violations were subjected to unannounced inspections by property management and were told it was because they were communicating with the City. Although HUD continues to be supportive of the overall effort at this development to address problems with ownership and management, the lawyers never received a formal acknowledgement or response to their complaint at this critical point in time. Examples of Interference in California in the Tenant Resource Network Program A lawyer in Los Angeles, CA worked with TRN organizers at the Coalition for Economic Survival. TRN organizers were repeatedly denied access to a large development, resulting in the lawyer writing a demand letter to the owner explaining the TRN program and the HUD tenant participation regulations and did not receive a response. The lawyer then sent a formal complaint to the local HUD office, in accordance with HUD Notice H 2012-21, which outlined the complaint process at the time. The complaint described a number of violations, including: management prohibiting distribution of leaflets; instructions to pick up leaflets that were already distributed; denial of access and denial of contact with tenants; denial of posting information; and requiring prior permission before engaging in protected activities, like organizing tenant meetings. Eventually, after the complaint was sent to HUD with ownership/management copied, management relented and granted the organizers access. Unfortunately, HUD did not respond to the complaint to ensure management compliance or issue a notice of violation. Our Recommendations While we recognize that the specter of lawyer involvement is frequently enough to resolve issues of management interference with 24 C.F.R. part 245 subpart B, we believe HUD can support our efforts to protect the right to organize with the following recommendations. Letter from HUD for Organizers: We understand that the National Alliance of HUD Tenants (“NAHT”) has requested a letter to be used by all VAHPP organizers when attempting to meet tenants. A sample letter was submitted to Kate Nzive on February 25, 2016. We urge HUD to approve a letter quickly so that VAHPP organizers have a letter to present to property management in the event the property manager attempts to deny them or restrict access to tenants. Further, we recommend that a sample letter be provided to organizers outside of the VAHPP program as well, perhaps in the form of an attachment to a notice including information on how to determine who to contact at HUD with questions. 4

It is our understanding that in response to an administrative complaint in San Diego, CA involving a TRN organizer, HUD sent a letter to the development owner explaining the TRN program and the property management’s responsibilities under 24 C.F.R. part 245. Similarly, in Illinois, the VAHPP Legal Fellows requested, and were provided, a letter from Region V that organizers can present to property managers with contact information for a staff member trained on the tenant participation requirements. We recommend that HUD develop a similar letter for use in both the VAHPP program and for organizers and tenant associations who are not involved in the VAHPP program. Train HUD Staff on the Enforcement Procedure Described in 2016-05: In our experience under the previous notice, if HUD responds to the complaint, it initiates a version of the conciliation process that does not serve to protect tenants. While it is clear under Notice H 2016-05 that the conciliation process is voluntary, the conciliation process frequently begins with HUD requesting that the tenants do more than is required of them under 24 C.F.R. part 245, subpart B. For example, HUD staff in the conciliation process have required that tenant associations first receive permission from management before engaging in protected activities. This request is in clear violation of the C.F.R. Conciliation can only work if the HUD staff are educated on what they are permitted to negotiate or demand in compliance with federal law and regulations. Further, HUD staff should respond to tenant complaints quickly, especially given the Notice’s requirement that current owners be copied on complaints. When HUD does not respond, it puts tenants at risk of retaliation. Without sufficient HUD training, the current protocol puts tenants seeking to assert their rights under the regulations in an unequal position, despite the regulations providing for strong tenant participation rights. When there is strong evidence to support that a violation has occurred, local HUD offices should issue a notice of violation without imposing undue restrictions on the tenants. Impose Civil Monetary Penalties: We applaud HUD’s recent expansion of civil monetary penalties under Notice H 2016-05. Unfortunately, to our knowledge, HUD has never issued civil monetary penalties or other sanctions against owners for violating the tenant participation rules despite having the longstanding authority to do so. In part, this is because local HUD offices do not issue notices of violation and the cases are not brought to the Department Enforcement Center for enforcement. While we recognize the need for flexibility in order to ensure the housing stock is preserved, to our knowledge, no civil monetary penalties have been assessed against owners who violate the right to organize, no matter how egregious the violation. This renders the threat of financial penalty for noncompliance meaningless, and allows owners to interfere with tenant organizing with impunity. Going forward, HUD should begin to issue notices of violation so that civil monetary penalties can then be imposed on non-compliant owners. Educate Contract Administrators About the Right to Organize: When tenants and community organizers attempt to assert the right to organize without lawyer involvement, they are frequently routed to the contract administrator. The contract administrators are frequently not familiar with the requirements of 24 C.F.R. part 245, subpart B and, as a result, relent to the requests of management that are at variance with the protections of the regulations. This also often results in contract administrators imposing additional obligations on tenants that the C.F.R. does not require, such as mandating that tenants preview flyers with management prior to their circulation. 5

Conclusion Thank you for your attention to this important issue. It is our goal to ensure that the purpose of 24 C.F.R part 245, subpart B is protected throughout the country so that tenants are included in the decisions made regarding their homes. We would welcome a phone call with you next week to further discuss these issues and recommendations. Sincerely, Emily Coffey Equal Justice Works VISTA Affordable Housing Preservation Project Attorney Sargent Shriver National Center on Poverty Law Jim Grow Senior Staff Attorney National Housing Law Project

CC: Urban Justice Center, New York, NY Michigan Legal Services, Detroit, MI Legal Aid Society of Southwest Ohio, Cincinnati, OH Public Counsel, Los Angeles, CA

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