Two years ago, the tenants of the Webb Forest Apartments were teetering on the brink of seeing their low- and moderate-rent units plowed under to make way for a commercial development. The owners had asked for an upgrade in zoning, which the city granted after an agreement was reached between the owners and the Webb Forest Tenants Alliance. The tenants signed a contract to stop opposing the zoning change; in return, the owners agreed to retain ninety-five units on the site for two years, pay rent subsidies for eighteen months for all displaced residents, and develop 240 replacement units in two years. A year after the agreement was made, the owners filed Chapter 11 and the apartments reverted to the lienholder, Southmark Corporation.
About that time, the bottom fell out of the commercial development business, so all the apartment units remain, although all but the agreed-upon ninety-five have been vacated, which means Southmark met the first requirement. The company also paid the remaining subsidies. But no replacement units have been built. Claiming betrayal, the tenants filed suit.
“We want them to provide 240 replacement units,” says Lori Haugen, head of the tenants’ group. ’”If they don’t want to do that then we’re going to ask them to deed [the complex | to us to develop as a tenants’ co-op to run as low-income housing.”
“Southmark is not a signatory to that original agreement,” says attorney Kirk Williams. But Haugen insists that Southmark accepted the terms of the contract when it left the ninety-five occupied units on the site and paid some of the rent subsidies.
John Fullinwider, a local housing activist, says the case is significant whichever way it goes because it points out how little control the city has over its low-income housing stock. “Although policy makers don’t like to admit it,” he says, “the principles of urban development aren’t the governing factors here-it’s the greater power of money versus the weaker power of the people who live there. That needs to change.”
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