Mold, no hot water or security: How Memphis renters are fighting poor living conditions

The mold that made Andrea Smith sick first showed up on her bathroom ceiling, she said, and then appeared on her kitchen ceiling.

After calling code enforcement about it, she said her landlord, The Millennia Companies, sent someone to spray a fresh coat of paint over the mold, proving to her they didn’t care about her health. (A Millennia spokeswoman said the company wouldn’t have painted over a molded area without first remediating the mold.)

Smith, 51, said the company is the worst landlord she’s ever had. Tired of the company’s mismanagement, Smith and about 20 of her Memphis Towers neighbors have banded together to fight for safer living conditions alongside organizers from the Memphis Tenants Union, a small nonprofit trying to organize local renters.

“There is power in people, and there’s power in numbers,” said Alex Uhlmann, the nonprofit’s only paid organizer. “We know (the tenants union) model has worked in other places, and now we’re trying to have it work in Memphis … (which is) a particularly tough environment when it comes to renters’ rights.”

To improve conditions at the building, the MTU is taking a unique approach. Since late June, its members and organizers have been advocating at the meetings of the obscure quasi-governmental body in charge of tax breaks and tax-exempt bonds for low-income housing in Memphis, The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee. In return for this financial assistance, landlords promise to maintain healthy, safe and attractive exteriors and provide certain “tenant benefits,” such as renovations, upgraded appliances or social services. If they don’t, the board can end the lucrative tax incentives.

Millennia received its Memphis Towers tax break in January 2020 in exchange for an $18 million renovation that would include the building’s flooring, kitchens, elevators and electrical system. For the last three years, the property has been under construction.

At the board’s recent meetings, the residents have described shocking conditions — including retaliatory evictions, harassment and an utter lack of security — all of which Millennia has denied. The union hopes the board will force improvements or end Millennia’s tax break.

“When is Millennia going to be held responsible for what they’ve done to their residents?” MTU member Joyce Warren asked the board at its Oct. 4 meeting.

Memphis Towers tenants are the first to show up at HEHFB meetings in the 15 years Charles Carpenter, the board’s lawyer, has been there, he said. The HEHFB is one of three Memphis boards appointed by elected officials that grant payment-in-lieu-of-tax property tax incentives. Unlike the other two boards — the Economic Development Growth Engine for Memphis & Shelby County and the Downtown Memphis Commission — little media attention is ever paid to the HEHFB.

While the board members have sometimes appeared uncomfortable with the MTU renters crowding their conference room, they’ve taken the tenants seriously. They’ve asked Millennia representatives sharp questions and discussed the possibility of ending the tax incentive, a measure they rarely consider.

In turn, Millennia has sent top executives to the meetings and promised to make the improvements necessary for retaining their favorable tax treatment.

However, those improvements have been slow to materialize, and the board has repeatedly delayed any decision on cutting the company off.

While Uhlmann has been encouraged by some of the board members’ vocal support, he and the property’s tenants have been frustrated by its lack of action.

He said the tenants will continue to make their voice heard at the meetings until their demands are met — exercising the type of power that local renters rarely have.

A landlord known for its failures

The Millennia Cos. is one of the country’s most notorious landlords.

In 2022, an explosion that may have been caused by a gas leak killed three people at one of the company’s Arkansas properties, and two renters at a Mississippi Millennia property died after a gas leak. The City of Atlanta is currently suing the company over conditions at one of its properties there.

In Memphis, the group owns five properties. Residents at its Downtown property Hope Heights went without hot water for six weeks earlier this year. And local public officials have reprimanded and fined the company for years for its mismanagement of Serenity Towers, a 10-story property near the University of Memphis that the company recently said it would sell. Residents there have had to live without air conditioning, hot water or reliable elevators for months at a time.

At Memphis Towers, which is located in the Medical District, residents had inconsistent access to hot water for the majority of last year, mold has shown up frequently and there’s been a worrying lack of security, according to MTU members and organizers.

In part due to Tennessee’s landlord-friendly laws, it is often quite difficult for Memphis renters to hold their landlords accountable for the type of issues Millennia tenants face, according to local experts.

If tenants withhold rent because their air conditioning is broken in July, landlords frequently respond by filing for eviction, experts say. If tenants call code enforcement or the local media because of a pest or mold infestation, property managers sometimes refuse to renew their leases or find legal ways to evict them.

Because of the large power imbalance between tenants and landlords here, the Memphis Tenants Union — which launched in 2021 and has primarily focused on Memphis Towers — has spent a lot of its time figuring out how to establish power for the residents it represents, Uhlmann said.

Before advocating at HEHFB meetings, the nonprofit tried to push the U.S. Department of Housing and Urban Development to hold Millennia accountable through numerous calls to department employees and elected officials, as well as showing up at its Memphis office. Memphis Towers tenants pay a reduced rent equal to roughly one-third of their income, and  HUD covers the difference between that amount and the apartments’ fair market rate through its Project-Based Rental Assistance program.

Landlords participating in the PBRA are required to lease “decent, safe, and sanitary units,” and HUD can cut off a landlord’s payments if they don’t provide such conditions. However, HUD has traditionally been hesitant to strictly enforce its standards, and Uhlmann said the department’s representatives that he spoke with weren’t helpful.

Frustrated with HUD, a couple of MTU representatives decided to virtually attend a HEHFB meeting in June, knowing the board also had some regulatory authority over the property.

Uhlmann was pleasantly surprised when the board showed receptiveness and interest in his comments, as opposed to apathy. So, in the months since, multiple MTU members have attended the meetings and shared their experiences during the public comment period.

“I think that has been a really empowering thing for residents — to be able to have a forum to talk about their issues with a board that directly gives tax (breaks) to their landlord,” Uhlmann said. “We are taken seriously.”

A board trying to do better

For much of 2023, the HEHFB has been bolstering its compliance work.

At the beginning of the year, the board asked its third-party monitoring firm to move from conducting a single, scheduled inspection of each of its more than 110 incentivized properties to two scheduled inspections and two unannounced inspections. In late summer, it added a second compliance employee to its full-time staff so that the staff could make its own inspections of each property every three months, along with more frequent inspections of “troubled properties,” such as Memphis Towers. And in recent months, the board’s staff has been developing relationships with City of Memphis Code Enforcement and Shelby County Environmental Court that hardly existed previously.

The board’s office manager, Stephanie Bryant, told the board in August that the staff has been working to take a proactive approach to compliance for the first time she can remember in her five years there and is developing a compliance scoring system to use, according to minutes from the meeting. (MLK50: Justice Through Journalism was denied interviews with HEHFB staff and board members. Bryant referred MLK50 to Carpenter, who asked to have all questions emailed to him; the public body’s policy is to not grant any verbal interviews to media members.)

HEHFB site inspections don’t usually include speaking with tenants at the properties. When a board member asked Bryant at the August meeting if the staff had a system for fielding communications from tenants, she simply said that her email address is on the board’s website, along with the office’s phone number, according to the minutes. When they have heard from tenants, though, Bryant said they do send a staff member to the site.

When the board decides that one of its subsidized properties is non-compliant with its requirements, it initially provides the landlord with a written notice of the things that need to be fixed, Carpenter said. If the repairs aren’t made within 30 days, the property enters the board’s “watch list.” If the issues are serious enough, the board will then also have Carpenter issue a legal notice that the landlord is in default on its tax break agreement. If the owner and manager still fail to remedy the issues, the board will consider ending the subsidy.

Memphis Towers is currently one of six properties on the board’s watch list but has not been issued a notice of default. The other five watch list properties are Creekside Meadows, Mill Creek, New Horizon, Sunrise Terrace, and Eden Pointe.

Most of the landlords that end up on the board’s watch list eventually address their issues enough to not lose their subsidy. The board has only ended six of the 90 tax breaks it has issued in the last 10 years, despite dealing with many of the city’s most infamous landlords.

A contentious meeting

HEHFB meetings take place in a long, skinny conference room on the eleventh floor of a Downtown office building. Other than at the conference table itself, there’s only a handful of seats. There’s hardly any room for Memphis residents to attend the public meetings, which hadn’t been a problem until the Memphis Tenants Union members became the first tenants to advocate there in at least 15 years.

On Oct. 4, at least half a dozen MTU members crowded into the room in bright red shirts, most forced to stand. They told the board about broken elevators and doors that didn’t work. Smith recounted the spray painting of her mold, and a blind resident reported repeated disrespect, including a property manager calling him a “cross-eyed crow.”

JP Townsend, the board’s newest compliance staffer, then backed up some of the residents’ complaints, reporting to the board that on his visit that week, the front door was broken; the fire alarm was going off; the internal security cameras weren’t working; and a single elevator was operational for the eight-story property with over 160 residents.

Millennia representatives, including interim executive director Arthur Krauer, told the board a disgruntled former tenant had broken the door and one of the elevators (according to a police report, an apartment manager found the tenant in the operations room shortly after the elevator stopped working). And they promised all of the security issues would be addressed by the end of 2023, when the company finishes the renovations it’s been conducting. This was after telling the board in early August that the work would be completed in November, according to meeting minutes.

Board members told Krauer they were frustrated.

“This does not feel like you have a sustainable solution for this property,” said board member Cliff Henderson, a vice president at Monogram Foods Solutions. “You’ve got to nail this down or we’re going to have to take some action.”

BOB: Health, Educational and Housing Facility Board active members: 

• Daniel Reid, president of West Tennessee banking groups with Renasant Bank

• Monice Moore-Hagler, a partner at Hagler Law Group

• James Jalenak, an attorney with Harris Shelton Hanover Walsh

• Buckner Wellford, a shareholder and attorney at Baker Donelson

• Cliff Henderson, a vice president at Monogram Foods Solutions

• Katie Shotts, CEO at the Memphis Area Association of Realtors

Board member Buckner Wellford, a shareholder at the law firm Baker Donelson, told Krauer he needed to engage with the tenants union and address their complaints. He said he was considering voting to end the tax break but called this a “nuclear option,” warning the tenants and his fellow board members that Millennia could “pull out” if the tax break ends.

Since Wellford declined to be interviewed, it is unclear what he meant by that comment. Through its contract with HUD, Millennia is required to either operate the towers as affordable housing through January 31, 2041, or sell the property to another experienced landlord. And, because of tax-exempt bond financing Millennia received from the Tennessee Housing Development Agency, the company is contractually obligated to operate it affordably until at least 2053 unless it sells the towers.

If Millennia does sell, Warren said it would be a “great thing.” A 10-year resident of the towers, she said Millennia is far worse than her previous landlords, who would quickly fix things that broke. She preferred her apartment before the renovations, which removed the bars in her bathtub that she used to stand up as well as her doorbell.

“(Millennia has) been getting away with it for so long. We don’t mean anything to them,” she said.

When asked about Wellford’s comments, Millennia spokesperson Isys Caffey-Horne said the company “has no intention to stop managing or (to) sell the property.” But, she said ending the tax break would “have a substantial negative impact on the residents of Memphis Towers as it would … restrict available funds for future repairs, improvements, resident services, and event programming.”

Wellford’s comments frustrated Uhlmann. He said it should be normal, not a nuclear option, for landlords to lose their tax incentives if they don’t provide decent living conditions. And if it does force the company to sell, he said the tenants would be “really excited.”

Carpenter said, though, that the board’s tax breaks — which cost the city roughly $4.2 million in the 12 months that ended June 30, 2022 — are crucial for landlords to be able to profitably operate low-income housing. Ending Millennia’s tax break, he said, could force it to place the building in bankruptcy, sell it or stop paying for any maintenance.

“Our experience has shown, in these cases, an immediate decline in the physical condition of the property (takes place),” he said.

During the meeting, he warned the board that they “don’t want to” do this, if possible.

The board decided not to take any action regarding Millennia that October day and asked the company’s representatives to attend their November meeting with updates on repairs.

An uncertain future

On Nov. 1, Memphis Tenants Union members returned to that skinny conference room to once again share their experiences at the Towers with the board. Multiple residents reported mold and frustration with property managers’ treatment of them.

Bryce Miller, from the board’s compliance staff, reported that on his visit days before, he saw a back door propped open, a hole in the fence and interior cameras that still weren’t operational. Millennia had fixed the front door and the broken elevator.

The board members didn’t spend nearly as long discussing the item as they had in October, instead deciding to conduct more thorough research — including talking at length with Code Enforcement and Environmental Court representatives about the property  — before their December meeting. At that meeting, Carpenter said, the board will come up with a final date by which Millennia must become compliant.

The tenants union members left the meeting frustrated by the lack of action.

“They’re still giving them (too much) time,” said Warren. “The people don’t matter. The residents don’t matter. It’s just wrong.”

Regardless of the board’s actions, Warren said she plans to keep fighting for Memphis Towers tenants until residents are “happy again in their homes.”

And after that, she said she would go preaching the gospel of tenants’ rights to renters across the city.

“I'm just trying to help those who didn't know that they have rights,” she said.

Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com, MLK50: Justice Through Journalism is a nonprofit newsroom focused on poverty, power and policy in Memphis.

This article originally appeared on Memphis Commercial Appeal: Millenia Companies see Memphis tenants rally against poor conditions