One resident of Sandy Studios, a condemned housing complex for veterans in Northeast Portland, wore a coat and beanie to bed to keep the bugs off her skin while she slept. Another killed 15 rats scurrying across his first-floor unit in one day, a “personal best.” A third tenant found so much black mold growing above his ceiling that it looked like the rafters had been scorched in a fire.

According to an investigation out Tuesday from Portland’s city auditor, the Joint Office of Homeless Services bears most of the blame for letting formerly homeless veterans languish for over a year in moldy, expensive housing units.

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The auditor’s investigation began last year after a tip to the city’s fraud hotline alleging that the Joint Office had frittered away money by continuing to pay to house veterans in a 32-unit complex clearly unfit for human habitation. The Joint Office of Homeless Services oversees homeless services across Multnomah County as part of a partnership between the county and Portland city governments. After investigating, auditors concluded the agency should have stepped in much more quickly to either fix the poor conditions or move residents out. Instead, according to the report, the agency spent over $850,000 to house the veterans before the city condemned the property last year.

OPB first reported on Sandy Studios last March. Veterans said problems with the small kitchen-less studio apartments had been obvious for years, but their complaints and maintenance requests were largely ignored. Finally, in January 2021, a ceiling collapsed on a resident and his girlfriend, revealing large patches of black mold. Soon after, city inspectors condemned the building.

Related: After bugs, mold, and ceiling collapse, an affordable housing complex for veterans in NE Portland will shut down

The closure implicated a host of agencies in charge of caring for and housing the city’s most vulnerable residents. Do Good Multnomah, a nonprofit that serves homeless veterans, provided support services to residents with staff on site every day of the week. The nonprofit paid a company called Home First Development to do day-to-day property management. Local hotelier Ganesh Sonpatki owned the building. Home Forward, the local housing authority, provided vouchers to the vast majority of residents to help cover rent and said it inspected units before these tenants moved in.

But it was the Joint Office that held the purse strings and was responsible for making sure tenants’ $1,045 monthly rent was paid in full. And it’s the Joint Office, the auditor’s office maintains, that should have stepped in to lift the residents out of squalor.

Drywall crashed into the Sandy Studios unit of David White, a 51-year-old army veteran, and his girlfriend. Then black mold blanketed his apartment, including his sink.

Drywall crashed into the Sandy Studios unit of David White, a 51-year-old army veteran, and his girlfriend. Then black mold blanketed his apartment, including his sink.

Photo courtesy of David White

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KC Jones, director of the city’s audit services division, said in an interview that he believed the Joint Office moved too slowly to help the veterans, allowing some to move into apartments even when the extent of the property’s issues should have been clear.

“For us, still bringing new people into the property showed that they weren’t taking the issue seriously,” he said.

Instead, the report states, the Joint Office continued to give Do Good Multnomah a long leash, trusting the nonprofit to make sure necessary repairs were completed and their subcontractor maintained the property satisfactorily. The Joint Office also failed to make sure Do Good Multnomah conducted a “thorough inspection of the property” when they acquired it or assess the condition of the property during their reviews, according to the report.

In a pointed four-page response to the investigation, Joint Office head Shannon Singleton indicated she felt that the auditors’ concerns were overblown and accused the office of “inaccurate statements and inflammatory language.” Singleton said the report failed to take into account the pandemic, which exacerbated the mental health issues of people living in the units and made it harder to do property repairs, and ignored the fact that the agency had been trying to remove residents from the buildings since August 2020.

“That relocation work was well underway when facilities issues escalated at Sandy Studios in early 2021,” Singleton wrote. “To say otherwise – to assert conditions there had devolved ‘without action from the Joint Office,’ when there is evidence in the public record that says otherwise – is disappointing and should be corrected in the hotline report.”

Singleton added that the agency has already taken several steps to prevent another Sandy Studios-type situation, including hiring new more people to help upkeep of facilities. (Singleton is the interim director of the Joint Office. Former director Marc Jolin oversaw the agency when it was responsible for Sandy Studios. He stepped down in March.)

Do Good Multnomah did not immediately respond to a request for comment and a response from the nonprofit was not included in the audit. The group’s executive director, Chris Aiosa, told OPB last year that soon after taking over the Sandy Studios lease in 2018, he sat down with staff from the Joint Office, along with his day-to-day property manager from Home First Development and the property’s owner, to figure out what needed to be done to improve the space. He said none of the improvements happened, a failure he blamed partially on the landlord, who he said was responsible for making big fixes on a building.

Christy Grever, 43, lived in Sandy Studios for three years. Grever has since moved to a new apartment complex further up Sandy Boulevard with vouchers provided by Home Forward. Her partner Paul, who had been diagnosed with lupus, died in October 2020, a few months before the ceiling collapse. She said most residents she knew in the complex have since been rehoused.

A file photo of Sandy Studios in Northeast Portland on March 29, 2021. All residents of this supportive housing for formerly homeless veterans were relocated due to the conditions in its apartments.

A file photo of Sandy Studios in Northeast Portland on March 29, 2021. All residents of this supportive housing for formerly homeless veterans were relocated due to the conditions in its apartments.

Kristyna Wentz-Graff / OPB

Grever said she believes every official who knew the veterans were suffering and did little help deserves a share of the blame for the intolerable conditions she and her partner endured for years.

“These veterans made enough freaking noise for somebody to be able to hear and somebody to be able to do something,” she said. “And they just didn’t care.”

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