CANTON − Roger Wells has lived for 18 years on Charles Ede Boulevard SE in a low-income housing development built by ABCD Inc. with state tax credits.
He unsuccessfully tried to purchase the four-bedroom house from ABCD in 2020 under the original rent-to-own terms and was taken aback when the new owners, Gateway Cherry LLC, raised rent from $565 to $825 last January.
Wells wasn’t the only one with grievances about the rent increase, purchasing process or maintenance. He and seven other residents met at his home in late August and discussed forming a tenant union with representatives from Canton for All People and Community Legal Aid.
“Everybody here got to have a place to live,” said Wells, who doesn’t want to move and feels as if low-income residents are being ousted.
Criticism of ABCD has come from residents in southeast Canton and a few residents of the northeast Richmond Homes ― an affordable senior housing complex where some residents also praised the development. Both projects used some form of government funding.
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Now the nonprofit corporation has asked for a share of Canton’s American Rescue Plan Act (ARPA) funds. Will Dent, president and CEO of ABCD, said he hopes to receive $1 million for construction of a 100-unit housing development on Richmond Avenue NE; and $186,000 for a storage garage, a training center and 24 senior apartments in the 1200 block of Harrisburg Road NE.
ABCD sells Gateway, Cherry homes
The Ohio Housing Finance Agency awarded $332,043 in low-income housing tax credits to help ABCD finance Gateway Place and awarded $335,233 for Cherry Homes, according to past reports. Each consists of about 30, four-bedroom houses in the area of Gateway Boulevard SE and Cherry Avenue SE.
The 15-year tax credits expired in 2019. The following year, ABCD sold both developments to Gateway Cherry LLC. Stark County Property records show that a total of 60 parcels were purchased for about $1.35 million.
“We sold them with the understanding that the equity that residents had accrued would pass on and they would remain affordable,” Dent said, and such terms are included in the purchase agreements he shared.
Residents earn $1,000 a year or a maximum of $15,000 in equity to be used toward the purchase of the houses.
Dent said the former property management company, East Akron Neighborhood Development Corporation, mailed letters about the sale to residents. But all eight residents who met at Wells’ place said they received nothing of the sort.
Yolanda Howard, who has lived in the community for 11 years and volunteered to be the tenant union president, said she once saw a person in the area introducing themselves as the new owner. Vanessa Colter, a resident for seven years, said she found a handwritten note in her mailbox about the new owner.
That was the extent of the group’s notifications about the sale. Several residents also said they received little advanced notice about the rent increase or only the second of two apparent notices sent by mail.
Gateway Cherry raise rent in Canton
Ryan Stubenrauch, an attorney representing Gateway Cherry LLC, said the rent increase “probably could’ve been communicated better.”
Stubenrauch said the ownership group tried to give residents a month’s notice by mail and, although they would’ve liked to send representatives door-to-door, don’t have enough personnel for that. Gateway Cherry must adhere to federal housing standards and rent to low-income residents even though the tax credits have expired, he added.
“So these projects, for the first 15 years they’re in the tax credit phase and then for the next 15 years, they’re in what’s called the extended use phase,” he said.
The Ohio Housing Finance Agency approved the increase in rent, which is less than the maximum permitted for a four-bedroom LIHTC unit in Stark County this year ― $1,116 for households earning 50% or less of the area median income and $1,339 for households earning 60% or less of the area median income.
ABCD had not raised the rent in years, and Stubenrauch said the new owners acquired “a lot of deferred maintenance.” They refrained from raising rent in the midst of the pandemic.
“Eventually, this just became a math problem,” he said. “There’s no way to meet the maintenance needs to pay for these increasing costs of repairs and supplies. We simply can’t do that on rent amounts that hadn’t changed since the mid-2010s.”
Maintenance was another point of contention for the southeast residents. Brandy Brown, who has lived on Gateway Boulevard for 18 years, said appliances are replaced with even older ones and contacting maintenance is difficult.
“Nobody picks up the phone,” Brown said, adding that she only gets a response by text message.
Canton Councilwoman Chris Smith, who represents the southeast Ward 4 and is an ABCD board member, said she spoke with Mike Doss ― a former NFL player born in Canton who is part of the ownership group ― and his attorney about resident concerns but felt like she “didn’t get anywhere.” She wanted the new owners to meet with residents to explain the rent increase and hear their concerns.
“I just want the residents to be, you know, happy pleased, get some solutions and to be taken care of in a proper and timely manner, especially when it comes to their repairs,” Smith said.
Stubenrauch said the owners have reviewed the communication practices of the property management company, Lawrence Realty, after the concerns were brought to their attention. A letter to tenants dated Feb. 23 shared a number to an automated phone system for service requests and stated that “records show there are many maintenance requests each month and almost all of them are scheduled for repairs or resolved within a day.”
The letter also addressed the reason for the rent increase and the process for purchasing the homes.
Residents report purchasing problems
Dent said ABCD began selling the homes after the first 15 years, as intended, and four purchase agreements were transferred to the new owners. Before the sale to Gateway Cherry LLC, the nonprofit sent letters encouraging residents to buy their houses.
“They never had any problems from us,” Dent said about residents who reported purchasing issues.
Howard said she asked for information about buying her house and never received a response when the property was owned by ABCD and managed by EANDC. Wells and Brown both said it took repeated attempts to receive their purchase agreements and they also learned about liens on the property without explanation.
Brown ultimately gave up when she felt “stonewalled” by ABCD and then the new owners. Wells was told by lenders that his credit score wasn’t good enough after he received his purchase contract in February 2020 from ABCD.
“I just had a lot of problems,” he said.
Vanessa Colter, a resident of seven years, was pre-qualified for a mortgage loan in June and has texted Lawrence Realty about purchasing her house for the past several months. She said she’s received no definitive answer about the status of the transaction.
However, three residents successfully purchased their homes since the ownership change because Stubenrauch said Gateway Cherry now owns 57 properties. The letter sent in February also encouraged long-term residents who are interested in buying their house to get a mortgage preapproval and then contact the owners or management company.
The liens are from OFHA, he added. “The lien is to prevent us from selling it to a private company,” Stubenrauch said. “These units can only be sold with government approval.”
Home values questioned
Rev. Don Ackerman, who leads Crossroads United Methodist Church’s community development corporation ― Canton For All People, said his greatest concern is the seeming sale of homes to Gateway Cherry for less than their worth.
“I know Will (Dent) said that all the people were offered a chance to buy their homes, but was it the same price that he sold them to Mike Doss for?” he said.
Dent said ABCD offered to sell houses to residents at below the appraised values of $40,000 to $50,000. The purchase contract given to Wells in February 2020 listed an appraised value of $39,655 for a purchase price of $24,655 after accounting for his 15 years of equity.
The Gateway and Cherry homes were sold in two groups to the new owners, according to Stark County property records. The average price per parcel was $21,516 for Gateway Place houses and $23,793 for Cherry Homes.
In June 2021, Gateway Cherry LLC and Brown entered a contract for a base purchase price of $56,400 and her credit was $11,000 toward the base price and $4,000 toward closing costs.
Stubenrauch said some frustration likely comes from the “market reality” of increased house prices. “People sell things at what a buyer’s willing to pay and what a seller’s willing to sell.”
Gateway Cherry is a for-profit company but low-income housing is not a “get rich” venture, Stubenrauch said. The ownership’s goal is to make a little money while providing for Canton residents.
The tenants who agreed to form a union plan to meet again this week and define their objectives. Ackerman said they also will ratify an organizing covenant that defines the responsibilities of the tenants, Community Legal Aid and Canton For All People.
“I know they’re going to start meeting monthly, stay up-to-date, develop out objectives, and organize together to see better living conditions in their units,” he said.
ABCD Inc. plans more developments in Canton
ABCD has requested government assistance for more developments in northeast Canton.
Dent described one as a “massive development” on about 28 acres along Richmond Avenue NE. It’ll consist of 100 apartments and some duplexes and single-family houses. ABCD will work with Giltz & Associates, the developer of the existing Richmond Homes ― nine single-family houses that were sold to low- to moderate-income residents for $117,500 each in 2021.
“We’re partnering with them with the same kind of structure, except in this instance we are 50% owners of the land,” Dent said. “So we are more involved with the new development than we were with the nine Richmond Homes.”
One resident of those homes has numerous complaints about the quality of construction, two others mentioned slow response times for repairs or maintenance, and another praised Harry Giltz Sr. as a man of “integrity” at City Council the same night that Dent presented ABCD’s plans to council members.
Dent said the developers have been “very responsive” to residents and both he and Giltz said the complaints have come from a single resident.
“There’s one out there who’s had some complaints, but I don’t need to go into that,” Giltz said.
Dent said the new $38 million development along Richmond Avenue will be “totally separate” and called Richmond Heights. The other upcoming projects involve converting the former Huntington Bank building on Mahoning Road NE into ABCD’s office ― for which the city already approved $300,000 in federal Community Development Block Grant funds ― and redeveloping the former Parkland Market nearby.
The former market building on Harrisburg Road NE is expected to be demolished and replaced with a training center, storage garage and 24-unit apartment complex. That combined with the bank renovations is estimated to cost $8 million.
According to Public Service Director John Highman, the city has received multiple requests for ARPA funding and the administration is determining which ones to present to City Council for approval. ABCD has requested a total of nearly $1.19 million.
“As you know, we have limited ARPA funds, so just because a request was made does not necessarily mean a project is moving forward,” Highman said via email. “At this point, it would be premature to speculate as to whether or not the city will be able to participate with the other requests as they are in the vetting process.”
Reach Kelly at 330-580-8323 or kelly.byer@cantonrep.comOn Twitter: @kbyerREP
