Acclaimed Latino Teacher Accused of Exploiting Tenants : Housing: The Oxnard educator says the charges are motivated by racism. He allegedly demanded side payments from his renters.

An Oxnard high school teacher honored last week as one of Ventura County’s top Latino leaders is being expelled from a federal rent-subsidy program for allegedly exploiting poor tenants, The Times has learned.

County building code inspectors also have recommended that William Terrazas of El Rio be charged with renting illegal dwellings. And county prosecutors said they are investigating additional allegations that the landlord collected illegal side payments from some tenants.

Terrazas, 43, denied any wrongdoing and said the inquiries are the result of racial bias and jealousy stemming from his success as an activist teacher and real estate developer in the unincorporated communities of El Rio and Nyeland Acres.

“You get a successful Chicano doing good and everybody wants to screw you over,” he said. “And they find every technicality to get you. . . . I feel racially harassed on this.”

But Assistant County Counsel Robin McGrew, acting on behalf of the district attorney’s office, said she soon expects to file misdemeanor charges against Terrazas for illegally converting garages into rentals and adding rooms to existing houses in violation of county building codes.

Assistant Dist. Atty. Colleen Toy White also said that prosecutors are investigating claims by several former tenants that Terrazas threatened to evict them if they did not pay more rent than approved by the Area Housing Authority of Ventura County.

The former tenants----all poor Latinos--have said they paid $50 to $150 a month extra, sources said. Because of the complaints about extra payments, housing authority officials said they are expelling Terrazas from their federal rent-subsidy program, the first landlord to be removed in the agency’s 20-year history.

The authority has refused to renew any of Terrazas’ 17 rental contracts as they expire. Twelve contracts already have expired and five more will expire by summer, officials said.

David Roddick, the authority’s director of housing management, said the agency has never before accumulated so much evidence of illegal payments--including canceled checks and signed tenant declarations--against a landlord.

“We’re excluding (Terrazas) from the program because he has breached his contract provisions,” said Roddick. “I know he took payments in excess of what he was supposed to.

“That’s not to say I don’t have landlords that we believe to be in a similar situation,” he said, “but until we have hard evidence we’re not going to react.”

Roddick said Terrazas’ ethnicity and success had nothing to do with the authority’s crackdown. “I don’t know the man,” he said. “The decision was . . . not based on personality.”

The housing authority notified Terrazas in October that his contracts would not be renewed unless he could show that the allegations were unfounded, and he did not, Roddick said.

Accepting side payments from tenants could constitute an illegal business practice under state law and would be a felony violation of federal housing laws, county and federal authorities said.

Such payments would undercut the federal government’s goal of subsidizing the rent of poor people so they have more money for other essentials, they said.

Roddick said that because tenants’ records are incomplete he could not say how much Terrazas may have received improperly. But one source told The Times that one tenant estimated paying $8,000 extra over several years.

Terrazas, who is also a general contractor, said he has bought or built 30 houses worth $5 million since 1978, but has never illegally converted garages or added unauthorized rooms to homes. Those alterations already existed when he bought the properties, he said.

And in an interview last week, he insisted that he never collected side payments, even after his debts began to mount with the recession in 1989.

Housing authority officials, jealous of his success, have conspired against him, Terrazas said. He said he suspects that some tenants are criticizing him now because of housing officials’ threats to take away rent subsidies--a charge that Roddick denies.

“I’m really going through some tough times right now,” Terrazas said. “Everybody calls me a no-good cheater. But I can live with myself. I haven’t cheated anybody. And I’ve helped a lot of people in this world.”

The allegations of some of Terrazas’ tenants run counter to his reputation as an innovative educator at Channel Islands High School in Oxnard, where he teaches his English-as-a-Second-Language students to have pride in their native culture and language.

Terrazas was one of five Ventura County Latinos honored for their leadership Friday night by the Latino advocacy group El Concilio del Condado de Ventura.

Terrazas, a Channel Islands teacher since 1973, was praised for starting a student group that serves as a statewide model for improving the academic success of minority students, and for involving parents in their children’s education.

In a letter of commendation last month, Channel Islands Co-principal John Triolo noted Terrazas’ passion for his profession: “As I have watched you and your interaction with students it has become evident why you are truly an outstanding educator.”

And one of Terrazas’ students, 12th-grader Luisa Martinez, said recently that her teacher has instilled pride in his students. “He motivates us to continue to study,” she said. “He’s a great guy.”

But several former tenants have told lawyers, government officials, and The Times about another side of Terrazas’ personality.

“I think this is one of those cases where you have to choose your heroes well,” said Carmen Ramirez, executive director of Oxnard-based Channel Counties Legal Services, which represents poor people in legal matters.

“I’ve heard some people speak very highly of what he’s doing at the high school,” she said. “But there’s a contradiction because the subsidized housing program is to help people enjoy a better kind of life and it appears that its purpose is being subverted.”

A side payment of $150 a month may not seem like much, Ramirez said, “but for low-income families it’s the difference between eating and not eating.”

Seven former tenants have contacted Channel Counties about Terrazas’ activities, and lawyers there said that so far they have demanded reimbursement for side payments on behalf of four clients.

Tenants in the federal rent-subsidy program usually pay only 30% of their income for rent, and local housing authorities pay the rest as long as the tenants’ houses meet cost guidelines. For example, a tenant with an income of $1,000 a month would have to pay $300 in rent. The remaining $700 would be paid by a housing agency.

Terrazas’ tenants are being relocated to apartments or houses owned by some of the about 1,000 other landlords who cooperate with the county housing authority.

Terrazas--who said he still owns 17 houses despite losing at least 10 in recent foreclosures--often rented dwellings to single Latina mothers struggling to find a home in a tight housing market, tenants told authorities and The Times.

Then he would demand side payments after raising the possibility of eviction, they said.

“He had control over us,” said a 38-year-old Latina mother of three who contended that she made extra payments of $150 a month for 18 months.

“It just wasn’t right,” said the woman, who requested anonymity. “I’m barely making ends meet, and he’s intimidating me and depriving me. He obligates people who are minorities and are too scared to bring it to a higher person for attention. He’s got an attorney, and we’re afraid we’ll lose the whole deal.”

Gladys Bojorquez, a 32-year-old single mother of four who receives welfare payments, said Terrazas solicited extra money from her after she applied to rent an El Rio house last spring.

Together, Bojorquez and the housing authority agreed to pay Terrazas more than $900 a month for a small three-bedroom house, she said.

“He said the house was worth $1,000, and I should pay the difference,” Bojorquez said. “I said that if I did what he wanted, I would lose my Section 8 (subsidy). He said, ‘If I evict you, do you think they’re going to give you another place.’ I don’t have a husband and he just tried to take advantage of me.”

Bojorquez refused to make the side payments, she said. She acknowledged now owing three months back rent, but said she withheld the money because of disputes with Terrazas over repairs and high water bills.

However, several other former and current Terrazas tenants--including two who admitted making side payments--said the landlord generally treated them well and made housing repairs promptly. And two tenants told The Times that they were never asked for side payments.

“With us he’s been great,” said Jess Pantoja, a 48-year-old construction laborer, whose family lives next to Bojorquez. “He doesn’t harass us, and sometimes we pay the rent a little late and he lets it slide.”

But Pantoja said he paid Terrazas $50 a month extra in cash for at least two years, not knowing that such payments were forbidden.

“He said he had a lot of bills and stuff,” Pantoja said. “He was getting in debt, and he said he just needed more money.”

Terrazas portrayed himself as a victim of his own good fortune. He said he has irritated the establishment with his success in business and in the classroom--by politicizing his students and by showing some of the trappings of his 1980s wealth.

“I’ve had six Mercedes-Benzes,” he said. “The worst thing I ever did was drive a Mercedes. There’s nothing worse than a Mexican driving a Mercedes. I’ve suffered ever since.”

Terrazas, who grew up in East Los Angeles, said he accumulated property by buying fixer-uppers, remodeling them and then using the improved houses to secure loans for additional purchases.

He bought his first house for $27,000 in 1978, just after getting a contractor’s license, “and it snowballed from there,” he said.

“I did it through hard work, but the system makes you look like a cheat, a dirty rat,” he said. “I’ve been hurt by the IRS, by the state, by the county and now I guess people are pretty happy because I’m losing it all.”

Actually, he said he hopes to keep 10 houses, including his own El Rio home, after ongoing foreclosures are completed and property taxes paid. He owes nearly $28,000 in overdue taxes on 16 houses, according to county records.

The titles on three houses have been clouded over the last two years with building code violations related to illegal structures. Terrazas said he has refused to correct the problems because the conditions existed when he bought the houses.

And county code enforcement officers have now asked that misdemeanor criminal charges be filed against five or six properties, Assistant County Counsel McGrew said.

“It is something that we’re planning to file,” she said. “I’m just not sure how many counts and at what locations.”

Meanwhile, the district attorney’s office confirmed that it had received a complaint about Terrazas several months ago and that allegations of side payments are being investigated by the office’s consumer fraud unit.

A spokesman for the U. S. inspector general’s office, to which the housing authority has referred the issue, said side payments would be a felony offense under federal housing law and punishable by up to three years in prison.

But the spokesman, citing department policy, would not say whether Terrazas is under investigation.