Taxpayers paid for the nonprofit Sunshine of Warren Inc. to purchase and rehabilitate houses for low-income residents, and now taxpayers are paying for some of those houses to be torn down.
Critics complain that it's improper to use money from a government grant to tear down houses in the multi-million-dollar, nonprofit corporation's portfolio. They are also irked that some Sunshine properties are dangerous nuisances and others so poorly maintained that they needed to be rehabbed twice.
Houses to be demolished: • 959 Front
Purchase date: April 6, 1995
Purchase price: $9,000
Current value: $4,800
• 481 Oriole Place
Purchase date: Sept. 6, 1996
Purchase price: $9,500
Current value: $4,100
• 951 Front
Purchase date: July 14, 1997
Purchase price: $12,000
Current value: $11,100
''A big problem is that many of these houses haven't been monitored like they should have been,'' said Warren City Councilman Al Novak. ''Sunshine acquired them, but then they sat vacant or were rented to people and not taken care of the way they should have been.''
But Sunshine Executive Director Anthony Iannucci, whose corporation has $7.5 million in assets according to 2009 IRS forms, defends the program's record of improving neighborhoods and serving low-income residents. He blames the poor housing market for Sunshine's failures, which he said are relatively few.
''The problem is determining which properties are in condition and are located in areas that it is worth the financial investment to bring them back into shape so they can be leased,'' Iannucci said. ''Because of the current housing market, there are homes that even if we put the money into them we do not know if we would be able to get anyone to move into them.''
Have been demolished:
Sunshine houses that have already been demolished:
- 421 Oriole Place S.W.
- 2036 Oak St. S.W.
- 12 more Sunshine properties are in need of significant repair and at least eight of the 12 will not be saved
- Those 12 are among the 33 Sunshine properties that sit vacant
- 10 other Sunshine properties had to be rehabbed twice after tenants trashed the houses
Sunshine houses on Warren condemnation list:
677 Second St.
2518 Hamilton St., which was raided because the residents had sick and deceased dogs and cats inside, will be recommended for condemnation, according to Warren Deputy Health Commissioner Bob Pinti. See story, 6A.
The City of Warren and Trumbull County created Sunshine in 1993 using federal HOME grants to provide housing for low-income residents. Sunshine obtained money from the city and U.S. Department of Housing and Urban Development to purchase, rehab and construct homes, mostly in Warren. Iannucci said he doesn't know how much money Sunshine has drawn since its inception, but the nonprofit continues to draw government funds.
Sunshine, which expanded into four additional incorporations, has 87 single-family homes while its subsidiaries - Warren First Homes, Warren Homes II, Warren Homes III and Warren Neighborhood Redevelopment Inc. - own 148 Low Income Housing Tax Credit properties.
Four of the properties have been demolished, three are on the city's demo list and another is on the city's condemned list. Trumbull County has placed a tax lien against Sunshine for the cost of two demolitions.
Sunshine owns 33 vacant houses, 12 of which need significant repairs, according to Iannucci. He said eight of the 12 are in such poor condition and in such undesirable locations that they're not worth repairing.
''They should be demolished,'' he said.
Warren's Deputy Health Commissioner Bob Pinti said he's about to place another Sunshine home on the condemned list.
Another 10 Sunshine properties were trashed and stripped so badly by tenants that they had to be rehabbed twice.
''So besides our initial investments, we've had to put more money into them just to keep them up,'' said Rosalyn Lampley, a manager with Sunshine Inc.
''When our properties become vacant, we work to fill them as soon as we can,'' Lampley said. ''However, there are people who go into properties very quickly and steal whatever they can. Thieves steal wiring, copper, windows and woodwork. They can destroy whatever value that may be in the home very quickly.''
For the past eight years, Tomara Russell has known this all too well. That's how long she has resided two lots from a stripped Sunshine house at 481 Oriole Place. She said people frequently enter the house, which does not have windows or doors, is missing its exterior siding and no longer contains anything of value inside.
The rat infestation is so bad, Russell said, that rat poison is used to keep the critters from her home.
''I've complained, but nothing has been done,'' she said.
Former Warren Safety-Service Director Fred Harris described Sunshine as an excellent program at its inception. He praised the outfit's ability to get low-income residents from highly concentrated, low-income complexes into single-family homes.
''We used government money to get people out of the projects into these single-family houses,'' Harris said. ''It would be a shame to use government money to tear some of these houses down.''
Harris said a cornerstone of the Sunshine program initially was home ownership training that helped tenants who lacked previous experience maintaining a property. Now, Iannucci said, that training will be provided when there are tenants identified as having an interest in purchasing homes.
''Once we have someone who is likely to go through the purchasing process, we can offer the training,'' he said. ''The problem is we haven't even been able to sell the homes until now, so it's difficult to train people when they haven't been identified as potential homeowners.''
But Novak and Councilman Greg Bartholomew, D-4th Ward, are among those who say the training should be provided even if the tenant has no intention of owning.
"The problem with the whole program is that the original mission statement has fallen by the wayside," Novak said.
Bartholomew also questions whether a government grant - obtained by the Ohio attorney general from a mortgage settlement with banks - should be used to tear down houses purchased with a government grant and operated by the publicly supported nonprofit agency.
''We should not use funding from a state-administered program to pay for the demolition of properties purchased using federal, state and local grants and tax credits,'' Bartholomew said. ''That is not right.''
Novak questions how much money was put into the properties during their initial purchase, rehabilitation and ongoing maintenance.
''Was it worth the investment?'' Novak questioned.
During the mid-1990s when many of the homes were purchased, the cost of the houses ranged from $10,000 to $30,000, according to county tax records. Average rehabilitation costs ranged from $25,000 to $35,000.
''Some of the homes needed roofing, structural repairs, wiring, plumbing, heating and air conditioning systems as well as other improvements,'' Iannucci said.
Homes purchased using Low Income Housing Tax Credits are being leased to tenants on an annual basis and cannot be sold for 15 years. The 48 Warren First Homes - the initial tax credit houses built and rehabbed - may be sold in 2013. The 80 homes under the Warren Homes II and Warren Homes III names will be eligible for selling within the next four years.
''We would have liked to have had the people who went into the houses originally to have stayed in them for the entire 15 years, so they would have been able to purchase them at substantial savings,'' Iannucci said. ''However, if for whatever reason, the tenants move, whoever now lives in the houses will be able to purchase the properties. Or, if they are vacant, we will attempt to sell them at market rates.''
The average rent for two-bedroom, single-family Sunshine homes is $400 per month.
''Finding renters for the two-bedroom houses is part of our problem, because most families want more bedrooms,'' Lampley said.
Sunshine has a local company that does most repairs and inspections on its properties.
''About 60 percent of our properties are Section 8, so they are inspected at least once a year,'' Iannucci said. ''We also inspect the remaining properties at least once a year.''
That hasn't prevented houses from falling into disrepair, which has prompted Bartholomew to call for better oversight after the properties are leased.