Agency Urges Halt to Jones’ Rent Subsidies

Citing federal conflict of interest guidelines, an attorney for the San Diego Housing Commission has recommended that the agency stop paying Councilman William Jones rental subsidies for tenants living in a small Southeast San Diego apartment building he owns.

Since Jones, as a councilman, has a final vote on commission matters, U.S. Dept. of Housing and Urban Development guidelines require the housing commission to cancel two contracts it has to pay Jones about $600 a month in rent subsidies, housing commission attorney C. Michael Cowett concluded in an opinion released Thursday.

And because the contracts are considered “void,” the tenants must move out within 60 days or forfeit their future claims to rent subsidies, Cowett wrote.

The opinion is the first on behalf of a public agency that has determined Jones has a problem in connection with his four-unit apartment building at 3055 L Street. The city attorney’s office is studying the matter and is expected to render an opinion sometime next week.

Cowett’s determination wasn’t a surprise, and as recently this week, Jones has taken steps to distance himself from any appearance of impropriety.

Late last month, he asked the housing commission to stop sending him subsidy checks, offering instead to pay the difference out of his own pocket for an undetermined amount of time.

And earlier this week, Jones informed commission officials he will be sending them a check for $1,000 to make up for the rental subsidies he has received since buying the apartments on July 31, said commission spokesman Ken Guyer.

“He has acted very responsibly and we feel it is a very innocent mistake,” Guyer said about the conflict. “People make mistakes. Sometimes in this city, it’s not accepted that they do.”

Jones’s attorney, Roger Krauel, said on Thursday he’s not sure what the housing commission opinion means for his client.

“I’m not his financial adviser, so I don’t know how he’s going to approach this,” Krauel said.

But Krauel did say that Jones may consider selling the property--a move that would leave the tenants and their federal subsidies under the federal Section 8 program undisturbed.

“One of the purposes for acquiring the property was to benefit the community, and part of that community was Section 8 people,” said Krauel. “The property can no longer be used by him for Section 8 people.”

Jones was out of town and could not be reached for comment. Several calls to his administrative assistant, Rich Juarez, were not returned on Thursday.

The District 4 councilman purchased the income property with no money down after Great American First Savings Bank gave him a loan for 100% of the $150,000 sales price.

Jones said he originally offered to make a $30,000 downpayment, but Great American officials countered with the 100% loan instead. He said he pays interest only, with the principal due in five years.

Housing commission officials didn’t know that Jones purchased the property until they read about it in news stories several weeks ago, Guyer said. They immediately asked for a legal opinion on whether Jones had a conflict and how it would affect the Section 8 tenants, some of whom had lived in the building before the councilman bought it.

Currently, three of Jones’ four tenants are eligible for rent subsidies. The commission had been paying about $600 a month for two of them, while it is withholding payments on a third until Jones makes repairs to the tenant’s apartment.

If Jones keeps the property all three tenants will have to find other places to live if they want to keep the Section 8 subsidy.

“Pursuant to mutual agreement with Councilman Jones, the commission has discontinued all payments to him,” Cowett wrote in his opinion. “I understand that HUD regulations provide for certificate holders to either give up their Section 8 certificates or to move to other premises within 60 days after the expiration or rescission of ... contracts with landlords. Therefore, the tenants should be informed of that choice by the commission.”

When informed of the options late Thursday, Shirley Reed--a 28-year-old mother of three who moved into a three-bedroom apartment on Oct. 1--said she will begin hunting for new quarters.

“I guess I’m going to have to move because I don’t want to lose my Section 8,” she said, adding that she is unemployed and receives welfare. The rent on her three-bedroom unit is $535, but she pays only $149.

“I really can’t pay the rent as it is because I have three kids and I take care of them myself,” she said. “If I paid that amount, that wouldn’t give us anything to live off of.”

Her neighbor, 39-year-old Glenda Parrish, said she, too, will begin looking for a new apartment.

“I’m flabbergasted,” said Parrish, who also lives in a three-bedroom apartment.