Google Ads help pay the expense of maintaining this site
Click Here for the Neighborhood Transformation Website
Miami Herald -
July 26, 2006
Fair Use Disclaimer
Neighborhood Transformation is a nonprofit,
noncommercial website that, at times, may contain copyrighted material
that have not always been specifically authorized by the copyright
owner. It makes such material available in its efforts to advance the
understanding of poverty and low income distressed neighborhoods in
hopes of helping to find solutions for those problems. It believes that
this constitutes a 'fair use' of any such copyrighted material as
provided for in section 107 of the US Copyright Law. Persons wishing to
use copyrighted material from this site for purposes of their own that
go beyond 'fair use' must first obtain permission from the copyright
of Lies" (part 4)
Buyers flipping homes for profit
Homes intended for low-income buyers have instead been snapped up by
investors and others who flip them for a profit
By Debbie Cenziper
In a county seized by one of the most dramatic affordable housing
shortages in the nation, developers entrusted with government land and
money to build homes for the poor have sold instead to real estate
investors, wealthy buyers or families who turned quick profits.
Jesse Jones pocketed $21,000 after he sold his new threebedroom in less
than a month to a Broward County investor.
Fredricka Trapp and her son Clifton did even better: They made $175,000
in 14 months selling nine houses built for the poor in Florida City.
Said Clifton Trapp: "I basically just spread the word . . . It's not
like it was a killer deal or anything."
So far, the Miami-Dade Housing Agency hasn't tried to stop them.
The "flipping'' of homes for the poor is among a string of problems
that taint an innovative program launched by county commissioners five
years ago to bring new life to abandoned lots scattered across
The idea seemed deceptively simple: giving developers government land
and in some cases construction loans in exchange for houses that poor
families could afford.
Since 2001, developers promised to build more than 580 houses. But only
190 homes one-third of what was promised have been delivered. And not
all the homes have been sold to needy families.
Kenya Tookes just snagged a house at a reduced price of $180,000. On
the sales contract, obtained by The Miami Herald, Tookes declared
herself a firsttime buyer, a requirement of the program even though she
owns four other houses valued at more than $700,000 in total.
"She swindled me," said developer Elena Diaz de Villegas, who said she
didn't realize until after the sale that Tookes owns other homes.
Tookes' response to The Miami Herald: "Talk to my lawyer."
For years, the Housing Agency not only overlooked the flipping of
properties, but also allowed widespread delays and red tape to overtake
Miami's working poor paid a stiff price, shut out at a time when the
county's home prices soared to some of the highest levels in the
nation. At the same time, other crucial Housing Agency building
projects were derailed by insider deals and chronic mismanagement.
Burned by the breakdowns: Ozie Porter, who several years ago started
hunting for a house in the program but was blocked by waiting lists and
developers who never built what they promised.
When she started her search, the houses were selling for just under
$100,000, the maximum price allowed by the Housing Agency. Now the cap
has been raised to $225,000 and Porter is no longer sure she can afford
"Everything has gone up," said Porter, who managed to save $5,000 for a
down payment on a cafeteria cook's salary while living in public
housing for the past 16 years.
"All I want to do is get into a house. I want a green yard. I've never
had that before."
Known as infill housing, Miami-Dade's land program has drawn national
recognition, honored with awards and praised by politicians. But The
Miami Herald's investigation found:
• Not once has the Housing Agency confiscated a lot from
deadbeat developers, even though dozens of lots are still empty and the
land is supposed to revert back to the county in 12 months if no
• County inspectors in recent years have levied more than
$65,000 in fines against developers for everything from illegal dumping
to shoddy lot maintenance to failing to haul off industrial waste.
Still, the Housing Agency didn't intervene in pushing construction
• The Housing Agency gave out land but never bothered to make
sure developers could build on it. When even well-intentioned
developers complained they couldn't start construction because of red
tape everything from old liens to zoning problems the agency largely
• Meanwhile, the Housing Agency shrugged off the
single-most-important goal of the program helping the poor by failing
to ensure that the new houses were sold to low-income buyers.
Instead, officials left the oversight to developers, who stood to
profit more quickly by selling to buyers with easy access to cash.
"Unacceptable," said Cynthia Curry, senior advisor to County Manager
George Burgess. "It's an abused situation and it's one clearly that the
county has to take control over. There was a lack of monitoring on the
Housing Agency's part and that lack of oversight obviously cost us."
FAST, EASY MONEY
INVESTORS SNAP UP HOUSES FOR THE POOR
In at least 14 cases, The Miami Herald found, houses built for the poor
were sold to real estate investors, buyers who owned more than one
property or families who flipped the houses for a quick profit.
Housing Agency rules stipulate that buyers must be low-income,
first-time homeowners. The guidelines also state the houses must be
sold at an affordable price and remain that way for 10 years, meaning
that if a buyer sells before then to someone who is not qualified, the
Housing Agency can potentially take back the property.
But the Housing Agency never bothered to ensure its guidelines were
enforced, nor did it place restrictions in deeds before the developers
took control of the land.
In 2002, the for-profit Citywide Development received a $1 million loan
from the Housing Agency to build 70 infill houses. But Citywide sold at
least 11 to real estate investors.
One was Clifton Trapp and his mother Fredricka, who bought nine of the
houses and sold them to five other investors over the course of 14
months, earning a profit of $175,000. Combined, the five investors own
property valued at more than $2 million.
"We didn't know anything about it being low-income," said Clifton
Trapp, of Pembroke Pines, who owns at least 10 houses.
Citywide defends the sales, saying homes were sold to unqualified
buyers because it already had paid back the $1 million loan to the
"We were out from under the requirements," said Diaz de Villegas.
But records show many of the houses were sold weeks or even months
before the loan was paid off. Either way, Housing Agency officials say,
Citywide signed a contract in 2002 promising the "units approved under
this agreement must be occupied by lowto moderate-income families."
Citywide got the loan over other developers in a competitive process.
"That was supposed to be affordable housing period," said Housing
Agency construction loan chief Tawana Thompson.
Diaz de Villegas said Citywide has built dozens of affordable homes in
"This was only one of my cases," she said. "It's blood, sweat and tears
building affordable housing. I've always been very careful about
selling to affordablehousing people."
But records show Citywide just sold another house in the infill program
to Tookes, who owns four other homes.
Tookes was not told the house was built for the poor, argued her
attorney, Dacia Riley.
"It seems to me that maybe the checks and balances were not made in
this case, and now that it has been determined that she was not a
firsttime home buyer, people are going on the offensive," Riley said.
But Tookes signed a sales contract claiming she was a first-time buyer.
Said Riley: "The [fine print] is so small."
In some cases developers unintentionally sold to buyers who profited
off the program: Youth in Action Center, a Miami nonprofit, sold a
$140,000 house to Jesse and Lukesha Jones in January. The couple
flipped it weeks later.
Broward County resident Julio Cortez took over their mortgage and paid
the Joneses $21,000 after hiring an appraiser to access the house's
Youth in Action executive director Linda Stevenson said she had no idea
the buyer was going to resell the house at a profit.
"If you knew what we went through to build that house, just to sell it
to them for $140,000," she said. "This makes me angry. We have honest
people who need homes."
In 2005, Personal Paradise Developers sold a house to Deney and
Katherine Navarro for $153,900. The couple qualified as low income and
even received a second mortgage from the Housing Agency
Seven months after they bought the house, the Navarros sold for
$207,000 reaping a $53,100 profit.
The new owners, Roger Perez and Maria Hernandez, earn less than $30,000
between them and said they were unaware the house had been flipped and
the price hiked by 35 percent.
"It gets frustrating when you do it for affordable housing and this
happens," said Personal Paradise president Octavio Castellanos when he
was told of the sale by The Miami Herald.
Curry, with the county manager's office, wants the Housing Agency to
keep better track of the sales by requiring closing statements, copies
of contracts and proof of income for all buyers. She recently moved the
infill program out from under the Housing Agency to the county's
General Services Administration.
"We have to flip this," she said. "The program lost its way."
LOTS WERE SADDLED WITH LIENS, PROBLEMS
Other problems disrupted the program: The Housing Agency gave land
freely to groups with no track record or building expertise. The Miami
Herald found more than 20 nonprofit and community groups benefited from
the program, but never produced a single home.
But there were problems even with experienced developers.
The county set up an infill housing committee to ensure developers were
given lots suitable for building. But the committee, overseen by the
Housing Agency, regularly passed along lots saddled with tax liens and
Affordable house in Opa-locka. (Raul Rubiera/Miami Herald) Part 4 photos
Housing officials admit that about 70 percent of the lots weren't
"clean'' or ready for building. But the committee approved them anyway.
Some lots were too small for a single-family house and needed zoning
exemptions, which can take months. Others needed to tap into water and
The lots also came with costly liens from old violations, such as
illegal dumping, that developers inherited when they took control of
the land. That caused problems because developers can't get banks to
approve loans or the county to issue building permits until the liens
are gone a snag that can all but halt construction.
The for-profit Fortex Construction was forced to pay off $80,000 in
liens before the county would approve building permits, draining the
company's profits on houses that already were being built for cheap.
"It's just all this existing red tape that has been there forever that
is hard to fight," said Jose Perez de Corcho, a civil engineer with
Finally, the Housing Agency last year persuaded the county to change
its policy and waive the liens in advance of construction.
Jerry Flick a developer for the Housing League, who is building
affordable houses like the one shown in Opa-locka. (Raul Rubiera/Miami
Herald) Part 4 photos
The program remain in flux, but county officials say they are trying to
find ways to speed up construction.
On a quiet street just east of Interstate 95, longtime local developer
Jerry Flick has been trying to build a 1,200square-foot three-bedroom.
He got the lot four years ago but couldn't build on it because of
lingering liens from the city of Miami, delaying the project by a year.
Then he discovered inadequate sewer lines.
Flick spent $6,500 removing a fallen Banyan tree overturned by
Hurricane Wilma last fall. Every two months, he spends $200 clearing
debris that's dumped onto the lot; sometimes he's too late and is
slapped with a fine.
Overall, Flick has spent more than $20,000 on attorneys, fees,
permitting and expenses not including the cost of building the home.
The infill program should have been better planned before the land was
distributed, he said.
"I think there are some people who just get so frustrated they don't
know what to do and let the lot sit there," said Flick, who finally has
started construction on the house. "We've got a bunch of dead lots out
there. It's hurt everybody."
Miami Herald staff writers Susannah Nesmith and Jason Grotto, and
Herald researcher Monika Leal contributed to this report.