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Cover Story

This cold house

No furnace. No toilet. No hot water. The city seems powerless to stop problem landlords.

For rent: 12201 Mansfield - no toilet, no tub.
A vent in Anetta Foster's rental lacks a grate - and a working furnace.
For rent: 13561 Cloverdale
For rent: 12201 Mansfield - no furnace.
For rent: 13561 Cloverdale
Joy Management's nondescript headquarters (l) on Grand River Avenue.
Joy Management renter Clothilda Jones says the city's to blame for slumlords.
Luther and Leona Gist occupy a Joy rental that lacks a working furnace.
Joy's office manager Eugene Hunter.
SEE ALSO
More from Lisa M. Collins

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Memories from a reporter who believed

A grand visionary (5/21/2008)
Artist Matthew Blake helped make Detroit the city we love

Fashion that walks the line (4/25/2007)
Eugenia Paul goes for vintage with a twist

 

Published 11/6/2002

Tears spring from Anetta Foster’s fiery bronze eyes.

She’s frightened to open her rental home’s refrigerator, lest rats scurry from behind it. Rodent feces line the countertops. In the basement, the furnace is dead; gas pipes jut aimlessly from the wall. The bathtub doesn’t work. Lightbulbs blink out every couple of days — there’s some kind of electrical problem — and despite a persistent autumn sun the two-story brick house on Detroit’s west side is frigid and dark; windows are nailed shut. Upstairs, holes gape in the roof and bird droppings cover the floor. A nest sits innocently in the rafters.

Foster is furious her twin 5-year-old daughters live here.

“My babies mean everything to me,” says the unemployed hairdresser. “They’re scared here. I have to go with them into the bathroom. Before I use any dishes, I have to wash them with bleach, and rewash them, ’cause of the rat mess. At night it’s freezing. I have to wrap my babies in two sheets and two blankets and thermal pajamas, and my baby still has a cold.”

It’s been four years since Foster’s husband was shot to death (a case of mistaken identity, she says; the perpetrator will be paroled soon) leaving her to care for their infant girls and son, who was 10 when he saw his dad die. Foster and the kids stayed with friends and family for as long as she could.

In desperation, she found this place at 13918 Ward, a dump, one of hundreds for rent by Detroit’s most notorious slumlord: Joy Management.

The house isn’t legal to live in — it doesn’t meet minimum housing codes and until March the city planned to demolish it — but nobody seems to care. At $325 a month, it was the only place Foster could afford.

Now, Foster hand-washes her children every morning and watches over them all night — to ward off rats — as they sleep around a space heater, listening to birds and squirrels chatter about upstairs. Foster says she can’t get a job until she finds a decent place to live; she dropped out of GED classes to deal with this mess.

“It’s been so hard,” she says, sobbing.

Foster jumps with a start when she realizes the time, wiping her tears. Elicia and Latricia bound in screeching, “Mommy! Mommy!” A tangle of backpacks, coats and school papers engulf the room. For a moment everything seems normal.

“Right now it’s here or nowhere, and I won’t go to a shelter,” says Foster. “This is the most disgusting house I’ve ever seen. But I can’t be on the street with my babies. It’s getting cold.”

Joy to Detroit

Foster’s landlord, Joy Management, and the company’s elusive owner, Ernest Karr of Bloomfield Township, are well known to Detroit officials. Companies owned by or associated with Karr hold title to an estimated 1,000 Detroit houses, a city housing official says, making Karr’s firms among the city’s largest single-lot landowners. Taxes are delinquent on at least 500 of the homes.

Karr’s firms have enjoyed carte blanche in Detroit for 20 years, renting out dilapidated and sometimes hazardous houses.

The University of Michigan business administration grad flouts city rules and gets city policies overturned in court. For years, Detroit’s laws to discourage and punish problem landlords were poorly written and loosely enforced. Karr’s companies don’t certify properties as rentals with the city and don’t get the homes inspected annually, as required by law.

Joy’s rentals sometimes lack toilets, cabinets, windows, heat and safe flooring, according to tenants and housing activists such as Ted Phillips, director of the United Community Housing Coalition, which helps low-income residents find housing.

City Council President Maryann Mahaffey calls Karr “a slumlord.” She considers him an enemy of Detroit.

“Karr is a predator, in my view,” says Mahaffey. “He preys on poor people and he preys on this city.”

To avoid attention, Karr, 64, operates a web of companies and shuffles deeds for rental properties between them. The city can’t keep track of them.

Despite years of battles with Karr’s companies, city departments don’t share information on his properties. In response to Metro Times’ formal request for public records, the city produced scant documentation on Karr’s operations.

Karr’s firms dodge Detroit taxes, fighting city tax bills in court for more than a decade. City attorneys estimate Karr’s companies owe $4 million in taxes for some 500 houses. But city officials don’t know how many more properties Karr or his companies own or what their total tax bill amounts to, because the property deeds are held by so many different companies, and ownership of them can be difficult to determine.

“He only pays taxes when there’s a judgment,” says Stuart Trager, supervisor of the Law Department’s tax division. “If I were him, I would feel very uncomfortable being a tax deadbeat, living off poor people. But he’s shown incredible chutzpah.”

Ironically, Karr’s corporations — Acorn Investment, Castle Investment, Rex Investment, Rex Construction — built their property inventories by purchasing homes seized by the government for nonpayment of taxes or default on federally subsidized low-income mortgages. According to deed records, most of the homes were purchased from the U.S. Department of Housing and Urban Development; dozens of others were bought from the state. The city has sold Karr’s companies a handful of properties.

Mayor Kwame Kilpatrick tells Metro Times he wants to change the pattern of abuse. He says a team of officials is working to clean up Detroit’s housing problems.

“I am very concerned about this situation and my administration is working actively to develop a city strategy so we can prevent slum landlords from operating in Detroit in the future,” says Kilpatrick.

But for years, Karr’s companies have evaded Detroit officials. Since founding Ernest Karr Investment of Highland Park in 1978, he’s owned or been connected with at least 15 Detroit companies. They all share post office box addresses and rent properties out of Joy Management’s Grand River office.

In numerous court cases, Karr has denied owning shoddy rentals. He’s claimed he’s merely the property manager. Because Michigan corporations aren’t required to disclose ownership or financial information, Karr’s tactic often works. If authorities and the courts can’t figure out who owns a property, it’s difficult to hold anyone accountable.

But in March, Karr admitted under oath that he owns Joy Management and four affiliated companies. The city deposed him (one of his companies is suing for $25,000 over a house the city demolished), and Karr testified, “We’re all related companies,” and “I own them all.”

It is possible that Karr has silent partners and investors who own some of the companies he operates. Michigan laws don’t require this information to be reported.

G. Ann Baker, corporations division director for Michigan’s Department of Consumer and Industry Services, says there’s nothing illegal about owning a number of corporations that purchase property and perhaps disguise ownership. But if the corporation does something fraudulent, it can be held accountable much as a person would.

“No time in my lifetime have companies had to disclose who their owners are,” says Baker. “The reason we have corporations is because they’re good for business. … Corporations encourage people to invest because they protect investors.”

Yet some who’ve dealt with Karr say he intends to deceive.

“Karr, he’s a different kind of person,” says James Carlin, an attorney who’s represented numerous tenants who alleged they were injured in Karr’s properties. For years, Carlin says, court bailiffs were frightened to serve Karr notice of lawsuits because vicious dogs guarded his office at the time, which was situated above a Joy Road hardware store. Cases were thrown out because court papers didn’t get served.

“He’s designed his whole corporate framework to disguise who he is,” Carlin says.

Greener pastures

The road to Ernest Aaron Karr’s home is long and winding. Electric-green fairways and elaborate mansions line the trail through Bloomfield Township’s Forest Lake Country Club. Swans float under a bridge near Karr’s home in the 1600 block of Lochridge.

Boxes for the Detroit News and the Wall Street Journal sit at Karr’s driveway, where his wife’s ’89 Mercedes 300E is parked next to a Mercedes station wagon. Trees and unkempt plants block the view to Karr’s ranch-style home. It looks shabby compared to neighboring estates, but it’s evident the lakeside house is elegant inside.

A casually dressed man answers the doorbell. He takes one look at a notepad and camera, says, “No,” and quickly shuts the door. A large black chow barks at the unwanted visitors.

Karr refused to comment on his Detroit businesses. He didn’t return numerous phone calls.

“Mr. Karr doesn’t sit down and talk to anybody,” says his attorney, Valeta P. Brooks-Burkett. “He feels like all he gets is bad publicity. He says it doesn’t matter. He’s been in this business a long time.”

To his tenants and detractors, Karr is a phantom. He rarely shows up in court or visits rentals. When he’s not at his $400,000 abode in Bloomfield, he might be at his $300,000 home on a golf resort in Palm Beach Gardens, Fla.

According to his Michigan driver’s license, Karr is white, 5-foot-8 and 178 pounds with brown eyes. His address on his license is 14815 Grand River, the offices of Joy Management. He holds Michigan licenses as a real estate broker and commercial builder. He also holds a Certified Property Manager certificate from the National Association of Realtors, the equivalent of a master’s degree in real estate.

Karr is popular with his Bloomfield Township neighbors.

“He’s a good neighbor and we have social contact with him,” says Dr. Jan Wybranowski, a native of Poland who speaks staccato English.

Wybranowski says Karr doesn’t discuss his business. “He’s selective in the people he communicates with. But he, his wife, they are nice people. I know them for many, many years. I have nothing negative to say about him.”

Sue city

Karr’s companies have been involved in hundreds of court cases since Joy Management was incorporated in 1982. Disgruntled tenants and the government have sued him and his businesses time and again, with little impact.

Karr’s firms, in turn, sue with great success. His ace in the hole might be Brooks-Burkett. The tall, slight Detroit attorney makes mincemeat of opponents in court. She buries foes in a blizzard of paperwork.

“Their way of defending cases is to file motion after motion on technicalities, harassing the plaintiff attorney and making it so difficult that most attorneys just give up,” says Carlin, who’s faced Brooks-Burkett numerous times.

Her success is uncanny. When Detroit issued Karr’s companies a slew of housing violations, Brooks-Burkett won a ruling that forced the city to toss out its housing maintenance code. She argued the city code was “improperly adopted,” and the court agreed. The city is still finalizing a new code. In the meantime, it’s ostensibly using old ordinances to enforce minimum housing standards, according to city officials.

When the Detroit Water and Sewerage Department demanded that Joy Management file required paperwork when tenants vacate, Brooks-Burkett got that policy overturned as well. As a result, the water department has difficulty collecting on delinquent bills charged to the company’s properties, because Joy Management, in essence, found a loophole, says George Ellenwood, water department spokesman.

The water bill is “sizable,” but because the water department’s computer system is antiquated and keeps data based on addresses, not owners, Ellenwood says the department doesn’t know how much Joy or other Karr companies owe.

Karr’s Castle Investment is currently suing to overturn a Detroit ordinance requiring that a property be inspected before it can be sold.

And in the 1980s, Joy filed three class action lawsuits against Detroit on behalf of delinquent taxpayers. A decision in one of the cases set a precedent that caused a “hemorrhaging” in tax revenue for the city, Brooks-Burkett boasts in court papers. The ruling made it more difficult for Detroit to collect overdue bills, forcing the city instead to foreclose on often-worthless property. The city, with some 50,000 parcels in its inventory, is reluctant to foreclose on derelict property.

Another ruling barred the city from charging a $275 attorney and research fee on each overdue bill.

Trager says Brooks-Burkett exaggerates Joy’s impact on Detroit tax collection.

“The only thing Joy has done is forced us to do our job right,” says Trager. “It’s business. They call the fouls. Sometimes they win, sometimes they don’t.”

Detroit lawyers won last year, securing a $420,000 judgment for back taxes on 70 properties owned by Karr’s firms. The city’s remaining lawsuits to collect back taxes or seize property will be filed in batches of 70 — the most the court will allow at once, says Trager.

Brooks-Burkett is appealing last year’s tax judgment, arguing the city waited too long to collect. She also says the city can’t assess penalty fees.

Brooks-Burkett says the problem with Detroit is that it doesn’t follow its own laws, codes and procedures. In case after case, she argues Detroit lacks laws to back up policies.

“We always fight the city,” Brooks-Burkett tells Metro Times. “We generally lose in the lower court, but we appeal. And when we appeal, we win. That’s because the city doesn’t do things properly.

“This is why we fight the city. If they’re asking us to do something correctly, we’re asking them to do what they are supposed to do.”

Mahaffey says it’s been difficult to hold Karr accountable.

“Everything we’ve done to have control over his operations, he’s contested in court,” Mahaffey says. “These people, they stay up all night thinking of ways to bypass the system. I wish they had that kind of zeal to protect people, so [people would] have decent living quarters.”

The city isn’t the only entity skirmishing with Karr’s companies. Michigan Basic Property Insurance Association is fighting seven fire insurance claims by Karr’s companies. In at least three of those cases, fire department officials list the fires as “suspicious.” The fires occurred within a month of the application for insurance, Michigan Basic claims. The insurer says the houses were never eligible for coverage because of their dilapidated state.

One Michigan Basic lawsuit says a Karr company’s application contained false statements and was submitted “to fraudulently procure insurance benefits.”

Brooks-Burkett argues in court papers the properties are covered because the insurance company waited too long to deny or reject coverage while collecting premiums.

Housing crisis

Foster taps her foot impatiently at Joy Management’s dingy Grand River office. She’s here to demand a refund of her $650 deposit and $350 housecleaning bill, or else a new rental.

The office, which sits next to the Detroit Gentlemen bikers club, lacks exterior signage. The waiting room contains a ripped car bench seat, a few chairs and two rickety tables. Demand for Joy Management’s housing is apparent: A constant buzz of mothers with kids, of men and women, fills the small room. They turn to Joy when there’s nowhere else to go.

“This is low-income,” says a woman as she leaves the office. “We know what we’re getting. What do you think? We can’t afford anything else.”

Some 30 percent of Detroit households are low-income, according to the National Low Income Housing Coalition. With $21,000 a year or less in income, these households can afford $525 a month in rent, well under the market average of $771 for a two-bedroom residence in Detroit.

With public and subsidized affordable housing units quickly disappearing — the waiting list for such housing contains 17,000 names — people turn to Joy Management.

“Basically, the city of Detroit has an affordable-housing crisis,” says Steve Tobocman, a recently elected state representative and attorney specializing in city housing issues. “Hundreds of thousands of Detroiters can’t afford safe, decent, viable housing. So it creates an underclass of low-income housing providers. The Joy Managements grab the headlines, but there’s an economic reality that creates them.”

Housing activist Phillips says that while Joy is not the only problem landlord, the company stands out because it owns so many rentals that are in the “worst” condition.

The Grand River office sells a list of available rentals for $10; applications cost $30. Rents vary from $275 to $495. One recent list of 46 houses for rent included seven on the city demolition list and another seven listed by inspectors as “open and dangerous.” Nearly all the houses on the list are in the city’s database of nuisance structures. City records indicate a total of $130,000 in back taxes is owed on them.

Joy has leases stating that tenants are responsible for repairs, maintenance and any injuries that occur at the houses. In response to numerous lawsuits alleging injuries, Brooks-Burkett argues that problems — crumbling porches and floors — are obvious and therefore the fault of the injured. She argues that Joy has no duty to inspect or repair its rentals on a regular basis.

But Bob Day, a lawyer for Legal Aid and Defenders who specializes in landlord-tenant issues, says this is false. Landlords must comply with minimum housing codes.

“If there’s no furnace, that’s against the law. We can sue the landlord for that,” says Day. “Any landlord knows that heating, water, electricity, plumbing that works — these things have to be there or it’s not habitable, it’s not a house.”

Day says he commonly sees rental houses with “roaches, rats, mice, lead, black mold, asbestos, roof problems, ceilings falling down on people” in Detroit.

“A lot of these places, the electrical is shot. It’s dangerous stuff. And it’s scary, because every winter there’s fires and people are killed,” Day says.

Some tenants accept the conditions.

“If all the houses look like mine, I understand why it takes so long for them to come for repairs. I do everything myself,” says Richard Parham as he enters the Joy Management office to pay rent. “I’m paying $350, so I can’t complain. I’ve never seen the owner, but he always has a place for people to stay.”

Others put up a fight. A short drive away, Joy tenant Luther Gist points to a leaky basement wall, which is caving in, and the furnace, which doesn’t work. He says he’s spent $5,000 over the past year to upgrade the place.

“I can’t move; I’ve got bad credit. They know that. They prey on people. You should have seen it here when we moved in — it was hideous. I had no toilet and no bathroom sink,” says Gist, noting an electrical outlet situated on crumbling bricks. “If the wall buckles in, we’re going to have more than an electrical fire. We’re going to have a fireworks display.”

Gist says he’d sacrifice “almost anything” to buy one of these homes.

“My family would be a total asset to an area with a vacant home. I’d go in there and fix it up. We would love to do that. But that’s not an opportunity for us.”

He gestures toward mysterious wires sticking about.

“It seems like nit-picking, but this is the kind of stuff you wake up dead to.”

“They’re deadbeats”

“Patience my ass, I’m gonna kill somebody,” are the words displayed on the front window of a large camper truck with handicapped plates parked outside Joy Management’s offices. Its driver, known as “Magic,” is tall, muscular, bearded, wearing sunglasses and decked in black Harley gear from hat to toe. He sometimes drives prospective tenants to look at properties.

When a photographer starts snapping photos, Magic becomes infuriated, yelling, “I just smashed a guy’s camera for taking my photo,” before stomping off in a fit of curses.

Inside the office, Eugene Hunter, the office manager, sits with a tenant, surrounded by a cloud of cigarette smoke. His blue plaid shirt is sticking out of his pants; his clothes are disheveled and stained. When asked about the condition of houses Joy Management rents, Hunter launches a harangue.

“These houses are low-income houses, period. What the hell do these people think? I advise people, ‘Beware, they are low-income houses.’ They choose them on their own.

“Let me put this to you another way. Don’t you know a deadbeat when you see one? Their credit is fucked up. Why don’t you start this story on the right side, and go look into their history with landlords. … They’re deadbeats! They don’t have to rent these houses. If they want a mansion, keep going. We don’t have none.

“We fix them as soon as possible. The houses are as old as hell. If they don’t like it, kiss my ass. Fuck ’em. They’re the ones in this situation. Their problem is they want repairs and don’t pay any damn money.

“I’m sick of this shit. You deal with what you got. If you jerk my chain too hard, I jerk back. A lot of people lie, they lie to the reporters. I dare them to find any better in Detroit.

“If they think they’re so great, they can go to the same-ass place we went to get these houses: the city and the state. It’s not that hard. If you got some money, just bid on a house.”

Hunter says his “boss,” Karr, is providing a service in Detroit.

“If we don’t rent to these sons of bitches, they go in there and squat. Is that what you want?”

Outside, a repairman sits in a truck, looking through invoices. He says he works on furnaces and plumbing for Karr’s firms. The man won’t give his name and rolls his eyes when asked if the houses are properly repaired.

“Yeah, he works on them,” scoffs the man. He says he has a list of 60 furnaces to fix. Repairs aren’t done well, because Karr’s companies are miserly with contractors, he adds.

“The people that come here, they’re desperate. They’ll put down $800, and the houses don’t have a furnace, a toilet, doors, windows, they don’t have anything. I wouldn’t go rent a house without toilets or windows. He waits till they move in and pay rent before he fixes a house. But you get a backlog. On the other hand, if he fixes them up and nobody moves in, then he’s out money. He can’t fix them up until someone moves in and pays rent.”

The man says he’s seen the same dilapidated house rented out to as many as 15 different tenants. People don’t stay because the homes are in disrepair or Karr kicks them out because they won’t pay rent, he says.

“He is a bad landlord. But it’s like a gunfighter. It depends on how you look at it.”

Detroit inertia

For decades, Detroit’s lax attitude toward inspections, tax collection and business in general allowed for a “raping” of city neighborhoods by bad landlords, says City Council President Maryann Mahaffey. She holds former Mayors Coleman Young and Dennis Archer partially responsible.

For years, City Council voted to hire more inspectors, but the mayors wouldn’t do it, she says. The city never enforced its requirement that landlords register rentals with the city and that rental units must pass inspection every year, she says. Housing officials don’t check to make sure landlords are following the rules, and the city sells homes to companies without checking to see if the company is up on its taxes or has registered other rental properties, according to Mahaffey.

Reform won’t happen without mayoral support and leadership, she adds.

Mahaffey says the city should get its properties into the hands of nonprofit developers and prospective individual homeowners. The former mayors instead wanted to sell each property for as much as possible, she says.

“Better someone lives in it and fixes it up and pays taxes than to let it sit there until it’s snapped up by a slum landlord,” says Mahaffey, who’s been on the council since 1973. “Every other city in the state gives property away for $1 or $100. Archer stopped that.”

She says people earning less than $25,000 a year find it “almost impossible” to buy a home from the city.

Adding insult to injury, the city doesn’t make property owners pay the $7,000 bill to demolish dilapidated houses, she says.

Archer tells Metro Times he has no “personal knowledge” of Joy Management or Ernest Karr. He says under his administration, the city hired a collection agency to go after people who didn’t pay taxes, and he doesn’t recall ever receiving a memo or report about Karr’s operations.

Archer says it’s easy for city officials to blame him for problems.

“I’m the target on the wall,” says Archer. “It’s easy to point a finger.”

But the fact that Archer is ignorant of Karr’s companies, which city bureaucrats and council members cite as a huge headache, speaks volumes.

Karr’s firms have slipped through the cracks for many reasons, says Trager, supervisor of the law department’s tax division.

“Our efforts are not as comprehensive as they should be. We’re not doing a good job with tax collection or code enforcement,” says Trager.

Management of data is also a major problem, he says.

“Ordinance violations, delinquent water bills, sewer backups, delinquent tax payments, the body of information doesn’t interrelate,” Trager says. “It’s kept in separate departments.”

But Kilpatrick administration officials say that’s going to change.

“It’s a formidable problem,” says Michael Taylor, chief housing inspector for the Department of Building Safety and Engineering.

One problem in tracking owners who ignore city housing codes is that Detroit keeps data on properties by address, not owner, he says. But the department is trying to figure out how it can enforce the codes aggressively.

“I would have to agree that what we’ve done in the past is not enough,” he says. “We understand these problems have been around for a while, but there is really a new focus under the current administration to do things differently and to do whatever we need to do to resolve these problems.”

In addition to suing Karr’s companies for back taxes, the city has demolished a number of his corporation’s properties, though Taylor didn’t know how many.

He says the city is also expanding its “nuisance abatement” program to allow prospective homeowners to live in abandoned, tax-delinquent houses seized by the city for three years, tax-free. The building and safety department will draw up a list of repairs. If the repairs are completed in the three years, the individuals can receive the deed to the house.

Taylor insists that Joy Management and its affiliates are in the bull’s eye.

“We want to get those homes. We’re either going to sue them for the taxes, demolish them or seize them and put new owners in them,” Taylor says.

City attorneys hope their tax case against Karr’s companies is his undoing.

“It’s kind of like Al Capone,” deadpans Trager. “They couldn’t get him for bank robbery, so they went after him for tax evasion.”

Others aren’t as optimistic.

Clothilda Jones waits for hours on a recent weekday to retrieve her $840 deposit on a Joy Management rental. The home health aid worker says raw sewage and water leak into the basement and there’s no heat.

When she spots a reporter she says with a sneer, “You doing a story? What’s it going to change? He’s been in the news before. … TV cameras have come down and seen his places. It didn’t change anything.”

She blames the city.

“It starts with them. You couldn’t rent these houses if they did inspections.

“Mr. Karr is making his money. I have no problem with that. That’s what people do. But the city, they take vows and oaths when they take office, and they don’t have the decency to come check out the houses. What’s going to change?”

Lisa M. Collins is a Metro Times staff writer. E-mail lcollins@metrotimes.com.

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