Home NEWS A corporate landlord in Ohio pushes to evict tenants, critics say-EnglishHindiBlogs-News

A corporate landlord in Ohio pushes to evict tenants, critics say-EnglishHindiBlogs-News

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In February, Jenike Allen went to Cincinnati housing court to try to prevent eviction from her three-bedroom rental home. Her landlord said she didn’t pay the rent increase she was told about, and Allen wanted to assure the judge he never received notice of the increase.

A single mother who cares for Alzheimer’s patients at a nearby nursing home, Allen did not have a lawyer and waited nervously in the courtroom for her case to be heard. When she did, the woman, whom Allen did not know, described her own eviction in court. Not only were her charges the same as Allen’s, so was the woman’s owner.

“We had the same story and the same company, VineBrook Homes,” Allen told NBC News. “If I told anybody that, they’d say, ‘You’re making it up.’

Allen’s experience in court that day was not unusual, local legal aid lawyers say. VineBrook Homes Trust Inc., which owns more than 3,000 single-family homes in the Cincinnati area, is one of the most aggressive landlords in evicting its residents, they said. A large institutional owner of more than 24,000 single-family homes in predominantly low-income neighborhoods, VineBrook Homes is a real estate investment trust (REIT) with properties in 18 states, including Alabama, Indiana, Missouri and Mississippi.

“They are some of the worst landlords in our service area,” said Nick DiNardo, managing attorney for the Legal Aid Society of Southwest Ohio, who estimated that his office has handled hundreds of VineBrook evictions in the past two years. “They charge illegal or in some cases illegal fees, they block people [online] rental portal, when a tenant fails to pay these improper fees, they don’t give the tenant an opportunity to dispute the fee and then immediately file an eviction notice.”

VineBrook Homes was founded in 2007 by Dana Sprong, a Massachusetts developer and graduate of Harvard Business School, and his partner, Ryan McGarry. The company is one of a growing number of institutional investors who are buying up single-family homes around the country that they rent out. According to regulatory filings, it is backed by wealthy investors and tied to Dallas-based real estate and private equity firm NexPoint Capital.

Sprong declined to respond to DiNardo’s criticism or answer specific questions about the controversy and difficulties Allen and other VineBrook tenants have had with NBC News. Instead, he provided a statement saying the company’s mission is to “provide safe, functional and clean rental homes that are affordable for a variety of budgets.” Our commitment and investment in affordable housing in Cincinnati is significant, we have a proven track record and satisfied residents — more than four out of five residents renew each year — and the average tenure in our homes is approaching five years.”

Research shows that residential acquisitions by institutional investors like VineBrook have an impact far beyond their tenants. The property of these investors as well increases the cost of housing in the region, according to a 2020 study by the Federal Reserve Bank of St. Louis. And higher housing costs could contribute to homelessness, a 2020 Government Accountability study found; it was concluded that a $100 increase in the average rent in the area is due to increase in homelessness by 9%..

Laura Brunner, president of the Greater Cincinnati Port Development Authority, an economic development agency, characterized VineBrook’s business model as predatory and said it and other absentee landlords are causing significant problems for Cincinnati tenants.

“For decades, real estate investment trusts and investment funds have been looking for office buildings, apartments, retail space, but after the foreclosure crisis, they started buying single-family homes cheaply,” Brunner told NBC News. “They realized that the leverage is much different when you’re talking about a poor family than if Walmart is your tenant. It’s easy to bully them, ignore their needs, evict them if you don’t like them, or raise their rent.”

VineBrook declined to officially respond to Brunner’s views.

Image: Laura Brunner
Laura Brunner manages an economic development and housing agency that operates in Cincinnati and Hamilton County, Ohio.NBC News

In July 2021, the city of Cincinnati sued VineBrook to collect more than $600,000 in unpaid water bills and fines it owed for building code violations, trash and litter. The lawsuit accused Winebrook of “negligent, reckless and willful conduct” that “prevents the public health, welfare and safety of Cincinnati.” and found approximately 50 properties with code violations, including unsafe wiring, yards with grass over 10 inches tall, unrepaired roof and fire damage and no smoke alarms.

VineBrook did not comment on the record about the lawsuit, but settled it in August 2021, paying almost all of what the city owed.

Lack of housing

Compared to other states, Ohio has landlord-friendly eviction laws, legal aid lawyers say, making it something of a magnet for big-time real estate investors. Tenants accused of non-payment of rent are usually given what is known as a three-day notice that they must leave within that period or face eviction proceedings. From start to finish, an eviction can take about a month, legal aid lawyers say.

Back in February, the judge handling Allen’s case delayed her eviction, requiring VineBrook to provide notice of an increase in her rent. According to the lawsuit filed on Allen’s behalf, VineBrook failed to provide the documentation three times. Throughout the process, Allen said she tried to contact VineBrook both by phone and through its online portal, but was unsuccessful.

After trying to defend herself against the eviction, Allen, a VineBrook tenant since January 2021, sought legal help from Jordan Kotler, a staff attorney at the Legal Aid Society of Greater Cincinnati. Allen began paying her rent in court and in June reached a settlement with VineBrook to reverse the rent increase and eviction; the deal was filed in court and reviewed by NBC News.

A corporate landlord in Ohio pushes to evict tenants, critics say-EnglishHindiBlogs-News - EnglishHindiBlogs

But this was not the end of Allen’s troubles with Vinebrook. The following month, the landlord again gave her three days to leave, saying that she had not paid the rent. This time, VineBrook claimed Allen was owed nearly double the amount agreed to in a June settlement.

In late August, Kotler filed a complaint and temporary restraining order against VineBrook, alleging the company repeatedly mishandled Allen’s rental account and harassed her with eviction threats.

Allen’s case “is a classic example of how automation and lack of communication with private equity-backed companies like VineBrook lead to housing insecurity,” Kotler told NBC News. “We currently have several customers who have been locked out of the VineBrook portal due to rent increases, charging fees without warning. These tenants don’t understand what’s going on until they’re in eviction court.”

A Weinbrook spokesman declined to comment on the complaint and Kotler’s criticism.

In October, after NBC News contacted the company about its case, VineBrook reached a second settlement with Allen, in which the company agreed to drop the fees, deny the new eviction and pay all legal costs. Under the second agreement, Allen agreed to pay an additional $95 per month in rent for the new lease. Kotler said Allen was still having trouble communicating with VineBrook through its online portal and ended up signing a new lease by hand.

Denisha Vox, a former tenant at VineBrook, told NBC News that she had constant trouble getting the company to respond to her maintenance requests, including turning on the furnace, fixing a broken front door lock and evicting a squatter who lived in the basement. According to her, she left the apartment as soon as she could.

“Maintenance requests went unanswered for weeks,” Vox said. “Once there were a bunch of bugs that I had to fix myself because they didn’t want to fix it. The shower is broken, the heating is broken. It wasn’t until I put my rent in escrow with the court and delayed the payments that they came and fixed what was wrong.”

Denisha Vox sent photos of her broken front door lock to Vinebrook Homes, but was unable to get the company to respond to a repair request.
Denisha Vox sent photos of her broken front door lock to Vinebrook Homes, but was unable to get the company to respond to a repair request.Denisa Vox

Vox provided NBC News with photos of broken lights, leaks and screenshots of text messages indicating that her requests for repairs have gone unanswered. VineBrook declined to comment on Vaulx’s criticism, saying in a statement: “VineBrook is always committed to resolving maintenance issues quickly and efficiently.”

In addition to speedy evictions and code violations, VineBrook’s large purchases of starter homes are hurting the Cincinnati area, DiNardo said. “They’re certainly buying homes that would be affordable for first-time homebuyers, taking a lot of that supply out of the market,” he told NBC News.

Xenovia Jenkins can attest to that. Jenkins, who lives in a north Cincinnati rental home, said she told her previous owner she would like to buy the property if he ever wanted to sell. Jenkins said she enjoyed living in the home and installed kitchen cabinets, flooring and other improvements with her own money.

One day she came home to find a note taped to the door saying that Vinebrook had bought the property and was its new owner. Although the rent initially remained the same, Jenkins said, VineBrook began adding fees. She left as soon as she could.

“I’m gone in December 2021,” Jenkins told NBC News. “I felt like I was being pushed out, so I bought my own home.” She says she admits she’s lucky to be a homemaker. “Once the property is theirs,” she said of Vinebrook, “they’re free to do what they want with it.”

Directors of a high level

Sprong and McGarry started small when they started VineBrook in 2007, but now their operation is part of VineBrook Homes Trust, founded in 2018. Rental income at the REIT rose to $153 million last year from $75 million in 2020. Net cash from operations reflected this performance, rising to $64 million in 2021 from $30 million in the prior year.

Vinebrook Homes owns more than 3,000 single-family homes in the Cincinnati area, including many in suburbs like North College Hill.
Vinebrook Homes owns more than 3,000 single-family homes in the Cincinnati area, including many in suburbs like North College Hill.NBC News

Sophisticated investors can buy shares of a private REIT; Those shares have risen in price from $25 each in 2018 to $54 at the end of 2021, securities filings show.

Sprong and McGarry operate a REIT management firm, selecting single-family homes for purchase, renovation, operation, maintenance and lease. This organization receives 1 percent of the purchase price of purchased homes as a commission and a sliding fee for property management that starts at 8 percent of the rental income collected and gradually decreases as the income increases.

VineBrook REIT has senior board members. Among them is Arthur Laffer, an economist in the Reagan administration who received the Presidential Medal of Freedom, the nation’s highest civilian award, from President Donald Trump in 2019. Also on the board is celebrity fund manager Cathy Wood, founder of Ark Investment Management, a group of exchange-traded funds that skyrocketed during Covid and then collapsed. Neither Laffer nor Wood responded to requests for comment on VineBrook’s eviction practices and code violations.

NexPoint Real Estate Advisors is the REIT’s adviser, managing its “business operations subject to our board,” according to securities filings. Wood and Laffer also serve on the board of NexPoint companies. A NexPoint spokeswoman did not respond to emails seeking comment.