City aims to close rental subdivision loophole

BANGOR – The gravy train is ending for local landlords who have been taking advantage of weaknesses in the city’s general assistance program.

After learning that the owners of some Bangor rental properties have been profiting excessively from the city’s general assistance coffers, city councilors agreed Monday to take steps to end the practice.

“This is a city that prides itself on taking care of people, but [that does not mean the city is willing to condone] impropriety in the system,” Council Chairman John Cashwell said during a meeting of the council’s government operations committee.

At issue are the rental vouchers issued to residents eligible for general assistance.

During a briefing for the committee, Shawn Yardley, the city’s health and welfare director, said some Bangor landlords have been “subdividing” apartments and charging each tenant the allowed rate.

In other words, he said, some landlords have been collecting rent from several individuals for the same apartment in part because they have been able to. The city has lacked the means for tracking such redundancies. About 200 Bangor property owners participate in the voucher program.

“So you see where this is going,” Yardley said, adding that some property owners “are making out very well in the process. … Landlords have gotten quite bold about the process.”

The city has involved its legal, police, code enforcement and general assistance departments, as well as the state Department of Health and Human Services, in its probe of what has been occurring and how to curb it.

Despite that, there may be little the city can do retroactively, Assistant City Solicitor John Hamer said. He said the city’s approach likely will be “more of a cooperative effort” than “having the stick and trying to enforce it. At this point, it’s difficult to say where we’re going to end up.”

Housing assistance comprises about 80 percent of the city’s annual general assistance budget, which has skyrocketed in recent years from $848,000 in 2002 to $1.8 million last year, City Manager Edward Barrett said.

The state reimburses half of the first $625,000 the city spends on general assistance and 90 percent of any expenditures beyond that.

As it stands, those eligible for general assistance receive vouchers for housing costs and are responsible for finding their own rents. The vouchers are presented to the owners, who submit them to the city for reimbursement.

By way of example, Yardley said the maximum voucher for an efficiency apartment is $450, out of a maximum monthly allotment of $495.

That leaves $45 a month for food, medicine and other necessities. When too little cash remains for those needs, the general assistance recipient turns to food pantries and other social service programs, putting additional pressure on them.

On top of that, some general assistance recipients eventually qualify for Supplemental Security Income and once they do, they must reimburse the city for the housing costs incurred during their waiting periods.

“So it really is a troubling situation,” Yardley said.

The city already has revised its voucher requiring landlords to spell out what the tenant is being charged for “so that there is no lack of clarity.”

The city also plans to use computer software it obtained from the city of Portland to look for trends and redundancies.

Another step will be taken in the near future when city councilors set a rental rate for single-room occupancy, which many of the city’s subdivided apartments have become. Yardley has proposed $325 a month.

Yardley also recommended that rent payments for efficiency units and apartments co-rented by general assistance recipients be divided among the number of renters.