Landlord Expelled From U.S. Rent-Subsidy Program : Housing: U.S. officials accuse award-winning Latino teacher of exploiting his poor tenants by charging more than allowed. He says he is the target of racial bias.

A 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 inspectors also have recommended that William Terrazas of El Rio be charged with renting out 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 characterized the inquiries as 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 expects to file misdemeanor charges soon 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.

Tenants in a federal rent subsidy program usually pay about 30% of their income for rent, and local housing agencies pay the rest--as long as the tenants’ housing meets cost guidelines.

Because of the complaints of extra payments, housing authority officials said they are expelling Terrazas from their federal rent-subsidy program, making him the first landlord to be removed in the agency’s 20-year history.

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

“We’re excluding (Terrazas) from the program because he has breached his contract provisions,” said David Roddick, the authority’s director of housing management. “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.

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 had never collected side payments.

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 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 run counter to his reputation as an innovative educator at Channel Islands High School in Oxnard, where he teaches his students learning English as a second language to have pride in their native culture and language.

Friday night, in fact, Terrazas was one of five Ventura County Latinos honored for their leadership 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.”

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.”