By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
By Pete Kotz
By Monica Alonzo
By New Times
Motorola office worker Betty Piott figured that, at age 54, she had her life pretty well settled.
She had a steady income. She had a house on South 16th Street near Broadway Road that was hers, free and clear. She lived there with her husband, Virgil. And in a separate cottage on the property, she cared for her 87-year-old mother, Rebecca Glaze.
But that was before Phoenix decided that it just had to have that property so a private developer could come in and build offices and space for "light industry." City officials told Piott the score and, the next thing she knew, she got an eviction notice.
The city promised to take care of her, to find her and her family comparable living arrangements. And it wasn't supposed to cost the family anything. Piott got about $42,000 plus a relocation fee of $15,000. In the meantime, the city leveled Piott's property.
Now, four years later, Betty Piott finds herself with a $704-a-month mortgage payment. She wound up relocating herself after the city couldn't come up with anything suitable.
"We really felt kind of bitter about the whole thing," Piott says. "We're old. We should be at a point in our life where I don't owe a big mortgage like I now do."
Federal officials say Piott's financial burden should be a helluva lot lighter. They contend that Phoenix shortchanged her out of about $12,000. And they say Piott's case is not an isolated incident.
The city's relocation efforts, aided by federal grants in the name of urban renewal, have forced out other homeowners, renters and businesses. And federal officials claim that Phoenix, in trying to cut costs, has snookered some residents out of money that federal law requires the city to offer. Piott's is just one of about fifteen similar cases the feds discovered during a random audit of Phoenix's relocation program.
In Piott's case, there's another reason for bitterness. Her former property is still a vacant lot--after four years. The city's development plans for Piott's property have evaporated.
The reason the city gets involved in private projects in the first place is to attract developers to "target" areas, such as the south side. The city uses its condemnation powers to buy the property. To entice developers, the city offers the property for below market value.
The program is subsidized by community development block grant funds from the federal Department of Housing and Urban Development (HUD).
The nub is that federal law requires the city to provide "comparable" housing to anyone displaced. If such housing can't be found, the city has only two choices: Don't displace the person or make up the difference in mortgage or rent payments.
And HUD says Phoenix has, until recently, violated the law. The situation got so bad that HUD formally accused Phoenix of not giving residents and businesses fair compensation.
Gordon H. McKay, HUD's regional director of community planning and development, says the audit shows:
The city did not offer comparable housing to people being kicked out of their homes.
The city "routinely" gave replacement-housing options to displaced people "in an incorrect and inappropriate manner." The result, McKay wrote to city officials, was that people who were entitled to additional aid would "waive" their rights to these funds.
Families about to be displaced were not informed of all their rights. Down-payment assistance was not accurately presented to relocatees, appeal rights were misrepresented and the city's brochures contained inaccuracies.
Marvin Bowles, director of the city's Neighborhood Improvement and Housing Department, admitted to HUD there were some mistakes but contended they were isolated incidents. He told the city council and insists to New Times that his department has handled relocation well.
When HUD demanded that the city make additional payments to fifteen relocatees, the city threatened to take HUD to court.
But Phoenix backed down after HUD threatened a few months ago to withhold $9 million in federal aid. Why did the city back down? "We were looking at the situation if they held up our grant for this year, the inconvenience that would cost," says Bowles. "I think it was pure mathematical."
HUD's McKay says math isn't the problem.
"During our monitoring," he wrote to Bowles, "not one tenant that we interviewed gave any indication that they ever understood the options presented to them, or that the options were properly discussed with them." McKay said that fact should have been obvious to the city because no one was accepting the additional aid HUD says the city was required to give those who were forced into higher-cost housing.
Even now, the city is unwilling to admit it did anything wrong. Charles Bentheim, the city's relocation coordinator, calls the problems with HUD a "difference in interpretation" of federal laws. But the city's own internal audit of the program, conducted after HUD complained, concludes that:
The number of relocatees who appeal their deals is "much higher" than in similar cities.
Relocatees cannot get "an unbiased review of their case" by Bentheim.
The appeals process is cumbersome and, instead of helping solve complaints, "is used to wear down" the relocatees' resolve.
Asked about the audit, Bentheim says, "That was the opinion from somebody from the outside," he says, "though [the appeals process] was kind of cumbersome." He says changes have been made. Now, those who think they're getting a raw deal from the city have to go through only three steps instead of the four or five that used to be involved.