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MANDELA LANDLORD SUES HUD OVER ALLEGED DISCRIMINATION
Author(s): Michael Grunwald, Globe Staff Date: February 13, 1995 Page: 18 Section: METRO
A Roxbury landlord has sued the US Department of Housing and Urban Development for $12 million, claiming the agency has discriminated against him for years, in part because his tenants are black and Hispanic. In a lawsuit filed in US District Court, Alphonse Mourad, a Lebanese immigrant who owns the so-called Mandela Apartments on Washington Street and has frequently sued government agencies, accuses HUD officials of driving him to the brink of bankruptcy while lavishing profits on owners of predominantly white housing developments. Ever since Mourad and his ex-partners bought the 276-unit development from HUD in 1982, he has been involved in legal battles with the city, the state and the Boston Redevelopment Authority. He now claims HUD has shortchanged him and his 1,500 tenants in an attempt to gentrify Lower Roxbury.
HUD officials said they have treated Mourad as they would any other landlord with his history of code violations and said he is using high-minded rhetoric about racism as a smoke screen for private grievances.
"We can argue about the history of Mandela," said Casimir Kolaski, HUD's regional housing director. "But discrimination is not a valid issue here."
Mourad has always inspired mixed emotions among tenants and black leaders, with some hailing his clashes with authorities and others denouncing him as a slumlord.
He is known for feisty, flamboyant gestures -- for instance, his decision to rename the Westminster-Willard Apartments for the black South African leader. He is also known for lawsuits -- against the city of Boston (for blocking a sale of Mandela), the director of the BRA (for slander) and the state Department of Public Utilities (for increasing rates). He is also fighting the attorney general, who wants Mandela put into receivership because of code violations and mismanagement.
Mourad admits Mandela has problems, although even Kolaski says it is now in "decent shape." In his 35-page complaint, Mourad says those problems stem from a lack of HUD support.
He says the agency has kept rent subsidies at Mandela below market levels, while approving rents as high as 170 percent of market rates at housing developments with fewer minorities. He also says HUD denied him a chance to refinance loans in order to stem losses, while refinancing loans to give other landlords multimillion dollar profits. Records confirm those claims, although HUD officials say their decisions were justified.
In a two-hour interview, Mourad accused HUD officials of lying about his tax status, management rights and mortgages. He said he has lost $5.3 million at Mandela, including $1.5 million in legal fees, and said his tenants have paid the price.
"They're not just screwing me, they're screwing the minority community," he said. "They want to redline Roxbury, so they play me for a sucker."
Several local housing specialists expressed skepticism about the lawsuit, citing Mourad's reputation for lax management and trigger-happy litigation. But they noted HUD's reputation lacks luster as well.
"The guy doesn't have a lot of credibility," said longtime housing activist Lew Finfer. "But it's not going to surprise anyone if HUD made mistakes. They've made enough in the past."
In making his case, Mourad has seized on the latest HUD embarrassment, an endangered affordable housing program known as Title II. The owners of 23 Title II housing developments in Massachusetts have received more than $100 million in profits, simply for agreeing to refinance rather than prepay their HUD-insured mortgages. After reading Globe reports about Title II, Mourad obtained HUD records for four of those housing developments and found that only one of them has a minority population abov e 25 percent.
Mourad says that while Title II landlords refinanced for windfall profits, HUD denied him a chance to refinance $7.5 million in debts and avoid high interest rates, even though an internal agency memorandum recommended approval in 1992.
He also complains that while Title II landlords have enjoyed dramatic rent increases, Mandela's rents -- which range from $579 for a studio to $876 for a four-bedroom -- are below market rates.
"Look at Grant Manor across the street," Mourad said. "Look at Roxse Homes. Look at Campfield Gardens."
Kolaski said that comparing Mourad to Title II landlords makes no sense, because he is not eligible for that particular program, because he didn't have the federally insured mortgage required. Kolaski also noted that most of the tenants in Grant, Roxse and Campfield are black or Hispanic. "So much for discrimination," he said.
The future of affordable housing at Mandela is up in the air. The development's 15-year rent subsidies expire in November 1996. With HUD phasing out project-based subsidies nationwide, and a bid for a tenant cooperative to buy the project falling through, low-income tenants could end up at risk no matter what happens in court.