Court orders HUD action on Parkview Apartments in Ypsilanti

Simultaneously, HUD and Legal Services of South Central Michigan, which is representing the tenants, were ordered to meet to settle the issue of what kind of housing vouchers the tenants are entitled to. 

Issues at the complex, built in the 1970s and now less than a quarter full, date back to 2003.

At that time, the mortgage was assigned to HUD after the original developer, a nonprofit group, defaulted on water and sewer bills, according to Roberts' summary of the case. 

HUD became the "mortgagee-in-possession" in 2006. Last year, HUD offered tenants aid to relocate, then sent notice that the tenants' housing subsidy vouchers could be canceled if they stayed at Parkview. 

HUD's goal, according to court records, was to empty the building and sell it. But over the years, HUD also had invested nearly $4 million in improving the complex. 

That led Roberts to rebuke the agency in her order. She wrote HUD's actions prompt the question, "Why, after investing years and millions of dollars into Parkview, HUD decided to empty it altogether. HUD contends the policy change is due to deteriorating health and safety conditions. However, housing and security appear to have largely improved since 2006, casting doubt on the validity of this explanation." 

She also said HUD failed to answer that question: "The court discerns no continuity in the department's reasoning."

HUD officials in Detroit couldn't be reached for comment. 

Ypsilanti Mayor Paul Schreiber said Roberts' ruling is "a big victory for the tenants."

He said  lot of details still need to be worked out before the housing commission can take responsibility for the apartments, including how many so-called "project based" subsidy vouchers can be assigned to Parkview. 

Those vouchers would be permanently attached to the Parkview units, making renovation easier to afford. "Tenant-based" vouchers, on the other hand, are assigned to low-income residents wherever they choose to live. 

Project-based vouchers, Schreiber said, "can be used as a way to help with funding."

He said the housing commission has been working with Chesapeake Community Advisors, a developer interested in redeveloping the property. 

Bob Gillett, an attorney with Legal Services of South Central Michigan, said the first meeting with HUD after the court ruling was productive. The next court date is Oct. 29, when all parties will appear to update Roberts on their settlement progress. 

Schreiber said about 30 tenants remain in the building, and the best-case scenario is for them to be able to stay in the building while it is being renovated. 

In 2008, after HUD claimed the 2005 Deficit Reduction Act prohibited it from selling Parkview to the housing commission for less than market value, U.S. Rep. John Dingell, D-Dearborn, sponsored legislation clearing the way for the sale. Dingell and U.S. Sens. Carl Levin, D-Detroit, and Debbie Stabenow, D-Lansing, also sent a letter to HUD asking it to sell the property to the commission.