HUD ASSUMES CONTROL OF THREE CLEVELAND APARTMENT COMPLEXES NEGLECTED FOR YEARS BY OWNERS

WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today announced a settlement agreement giving HUD control of three subsidized apartment complexes in Cleveland that failed to meet HUD's minimum health and safety standards.

The agreement requires the current owners to sell the apartments to new owners approved by HUD. The new owners will be expected to renovate damaged apartments, correct all violations, create recreation areas, and initiate training programs for residents in computers and in other skills to help them get jobs and become self-sufficient.

Cuomo said the agreement will lead to improved living conditions for low- and moderate-income families living in nearly 1,400 apartments in the three complexes - Park Village, Longwood, and Rainbow Terrace.

"This settlement agreement sends a strong message to owners and managers of housing subsidized by HUD," Cuomo said. "If you don't provide safe and decent housing to families in need, your days of getting money from this Department are over."

"This agreement is good news for the residents of these apartment complexes and the City of Cleveland," said Cleveland Mayor Michael R. White. "It enables us to preserve a source of much-needed affordable housing so that families who call these developments home will be able to enjoy decent living conditions."

The apartments have been owned since the 1980s by a group of companies and controlled by Associated Estates Realty Corp., a real estate development and management company based in Richmond Heights, OH. The owners received HUD rental assistance subsidies under the Project-Based Section 8 Program to provide affordable housing at the apartments. HUD will continue making subsidies available to the new owners.

Inspectors for the City of Cleveland found more than 9,000 housing code violations at the three apartment complexes. Most of those violations remain uncorrected.

HUD inspectors found deficiencies at virtually every apartment in the complexes, including: rat and roach infestations, inadequate security, faulty and exposed wiring, leaking roofs, leaking pipes, clogged sinks, other faulty plumbing, severely damaged walls, inoperable appliances, uncovered electrical outlets, doors that didn't lock, windows that didn't have screens, damaged walls, damaged driveways and cracked sidewalks.

"The residents of these developments are the real winners," said Councilman Frank Jackson, whose ward encompasses Rainbow Terrace and Longwood. "We look forward to working with HUD and the new owners to provide a quality living environment for the people residing in these developments."

The settlement agreement was negotiated by HUD's Office of Housing, with the help of the Department's new Enforcement Center. The Enforcement Center was created as part of HUD's management reforms to intensify the Department's crackdown on waste, fraud and abuse by housing authorities, private landlords, local governments, businesses and individuals receiving HUD funds.