LaKeitha Rawls stands in front of rental office at Manahan Village, an affordable housing complex in Morristown, NJ. Manahan Village is the only public housing of its kind in the suburban town. Photo credit: LaKeitha Rawls

The Great Sellout: A court battle between a New Jersey woman and a major developer unveils a real estate scheme to take over public housing

7 mins read

The Great Sellout is a two-part series exploring the housing crisis in New Jersey. Ark Republic looks at unsavory practices by developers and local government in both Morristown and Newark.

It’s no secret the housing crisis is out of control. Roughly half of all U.S. renters are overburdened with monthly payments commandeering a significant portion of their salary. All the while, rents continuously skyrocket with no end in sight, and home ownership is a distant pipe dream.  According to a 2023 Habitat to Humanity report, the estimated annual income needed to buy a house rose 20% to $117,000.  

Still, politicians from both parties slash funding for public housing, while many of the buildings rot from decades of governmental neglect. According to the activist organization, Save Section 9, “Public housing units in New York and all over the country are falling into a state of decay due to racist and classist neglect and federal disinvestment, and privatization plans like Rental Assistance Demonstration (RAD) and [A] Blueprint for Change threaten to displace existing residents.”

After years of the federal government defunding public housing, the Housing Urban Development (HUD) introduced RAD then New York City Housing Authority (NYCHA) launched A Blueprint for Change, to deal with the housing crisis. On the surface, these public-private programs proposed to renovate thousands of government-subsidized housing. In the case of New York City, they were responding to tenants’ decades-long mobilization efforts in protest of NYCHA allowing the properties to sit in disrepair for so long that residents lived in squalid conditions as a daily reality. 

Both initiatives promised to renovate thousands of units in the city. What it did was attempt to strip tenants’ rights and became a cash cow for private developers. As it turns out, the private developers contracted to carry out the real estate rehabs, bankrolled billions of dollars. Instead of making infrastructure improvements that dealt with generations of maintenance neglect, developers performed superficial, cosmetic changes to buildings. Moreover, this practice became a template across America.

Samples of the ‘Great Land Grab’: The story of KeKe Rawls

Public housing is part of the federal government’s history of providing free or subsidized housing and land to expand and improve the U.S. Government sanctioned backed settlements, tax credits for housing, and working-class suburbs that offered heavily discounted mortgages, shows how U.S. officials offered many forms of housing and homeownership relief to those who lacked the financial wherewithal to do so. This also includes public housing that was created in the early 20th Century during the FDR deal. In many cities, “the projects” was an experimental program where military veterans would live with their families as a transition into single-family homes. But, the American dream changed as the racial and ethnic makeup of the residents in these buildings shifted to reflect the kaleidoscope of communities in the country. At the same time, the federal housing authorities began to defund the programs that offered critical housing relief.

Strapped for cash, today’s public housing authorities throughout the U.S. are turning to private developers.  In the process, they help to facilitate one of the biggest land grabs in history–which is saying a lot for a country built on stolen land.

One New Jersey resident fighting to save her family’s home has found herself contending with one of the biggest, most cut-throat real estate developers in the business. LaKeitha Rawls, a writer, physical trainer and mom, faces eviction at the hands of Meyer Orbach, CEO of the Orbach Group LLC, a multi-million dollar real estate firm headquartered in the suburban Englewood Cliffs, NJ.

For several years, Rawls has lived in Manahan Village, a public housing project in Morristown, NJ.  In 2023, she and fellow residents were excited to learn about massive renovations and new builds for housing projects located in Camden, Morristown, and Newark. Plans detailed an overhaul of all 200 apartments in the Morristown housing complex.  

Announced by Governor Phil Murphy’s office, the initiative is part of a $25 million package approved for tax credits through the Aspire Program.  The Aspire Program is part of a tax credit scheme established under the Recovery Act of 2020. Under the guise of dealing with the 2020 economic crisis sparked by the pandemic, the initiative contained a viper’s nest of tax deals that would benefit the wealthy.  

Here’s where things get shady:  Morristown Housing Authority didn’t have the money for the renovations, so they granted Aspire applicant, OAHS Manahan Village LLC, a ground lease to complete the renovations and essentially manage the property.

So who owns OAHS LLC?  That would be the Orbach Group–owner and developer of many of the toniest buildings in New York.  Like many luxury developers and real estate firms, they also now own and operate thousands of affordable housing units. This is due in part to the byzantine tax credit system known as Section 42 of the Internal Revenue Service tax code. It provides a low-income housing tax credit for “investment in certain low-income housing buildings.” Basically, Section 42 allows developers to claim an annual tax credit when they set aside a certain number of units in an apartment building for low-income renters. In turn, these credits can be leveraged for financing from banks, which is also why developers love it so much.

Keeping it all in the corporate family, the Orbach Group’s subsidiary, The Orbach Affordable Housing Solutions (OAHS LLC) claims to control 35 properties with 6,807 units and 14,565 residents in New Jersey, Florida, Pennsylvania, New York, California, Minnesota and Wisconsin. Included in its management is Rawl’s Morristown complex, where they also  were contracted to rehabilitate all the homes at Manahan Village.

Soon after Rawls’ new landlords took over Manahan Village, the initial enthusiasm soured.  In Spring of 2023, renovations were completed on the more public facing side of the complex, but the back of the complex where Rawls lives, was left out in the cold–literally.  At the start of the project, property managers promised that residents were going to be put up in hotels during reconstruction.  Developers described extensive improvements to the housing complex that  included the removal of windows and structural changes.  Like many promises, this turned out to be false.  

Rawls says that “They seemed like they were behind schedule because they just started rushing the work and the quality went down. They were supposed to notify us when workers were going to work on our house, but they often just showed up unannounced.”  At one point, Rawls came out of the shower to find a worker on a ladder peering into her bedroom window. 

Construction worker in the window of Manahan Village resident, LaKeitha Rawls. The worker was hired to renovate the homes of the affordable housing complex, but Rawls alleges the workers were callous in respecting tenants’ privacy and did a shoddy renovations job. Photo credit: LaKetha Rawls

Rawls soon began to email the property manager and city officials that the conditions the renovations were creating were inhumane–from the constant noise and disruption to shoddy workmanship to toxic construction dust and mold that were particularly affecting many children and elders. To worsen matters, the promises to house residents in hotels never materialized. Rather, they were often put in other vacant substandard housing units.  Rawls recalls that the unit they put her in had “mold, roaches, a hole in the ceiling and the toilet was backed up.”  

For over a month, renovations continued for Rawl’s house, during which time her mother passed away.  “I had to deal with all this while my mother was sick and the very day she died, I was dealing with the banging and the noise. There was debris and scaffolding blocking my door in front of my house so I couldn’t even go in.”

Conditions got so bad at Manahan Village that in December 2023, angry residents demanded that town officials and the Orbach Group/OAHS LLC do something to address the deplorable refurbishments  and  its aftermath. One resident brought a jug of raw sewage (see photo) to the meeting that she said backed up into her apartment. They also complained about raw feces backing up into their sinks as a result of Orbach’s renovations. Although local politicians promised to hold Orbach accountable, residents haven’t heard much from them in the recent months.

Following the tenants’ outcry, Orbach/OAHS LLC began targeting Rawls for eviction, saying she had been hostile to the workmen and disrupted them.  Rawls says she was trying to get into her apartment and had to move the debris to do so.  She says that management also cut off her heat and water periodically as retaliation for helping organize her fellow tenants. By December 2023, OAHS stopped accepting her rent payments as a means of evicting her in court.  Finally, she was served a notice by the court where she faces an eviction trial April 4, 2024, after the OAHS LLC lawyer refused to settle or accept her rent during an attempted mediation at Morris County court.

Left: Meyer Orbach of OHS. Right: Construction worker at Manahan Village blocking entrance of tenants’ homes with debris. Photo credit: LaKeitha Rawls

The ‘eviction machine,’ keeps churning

This is not the first time that Orbach/OAHS has used terrorizing tactics to expel  low income tenants who dare question its takeovers of their homes.  A 2018 New York Times investigation into the “eviction machine” in New York City found that the Orbach Group was among the most aggressive in the city in forcing out; especially low income tenants.  Firms like Orbach strategically target low income and rent-controlled buildings because they can acquire them for a relatively cheap price, evict the tenants, hike the rents and reap the profits.  Moreover, the Orbach Group often uses the renovation process to aggravate primarily Black and Latinx residents and push them out faster. In 2016, Orbach Group bought 50 Manhattan Avenue in New York’s Upper West Side.  They used the renovations as a means to displace, evict and raise rents–as documented by resident Valerie Johnson in her Youtube channel:

Here’s the kicker—the financing for that deal, like several of the Orbach Group’s deals, was provided by Israel Discount Bank—one of the banks that funds the Israeli settlements in the  occupation of Palestine. These settlements have been deemed as having “no legal validity, [and] constitute flagrant violation of international law” by the United Nations.  In 2017, Who Profits research center documented the vast involvement of the bank in Israeli settlement construction in Palestinian lands.

Meanwhile, back in Morristown, Rawls is not backing down. She fought her eviction, saying “I waited more than six years to get this place, it’s my home. I can’t afford to go anywhere else.  If it’s happening to me, then it’s happening to others and we have to fight.”  She says she enthusiastically considers herself a revolutionary. “I’ve had to become one because of this.”  At the April 4th eviction hearing, a spirited group of Rawls’ supporters gathered at the historic Morris county courthouse lined with portraits of wig clad colonizers.  The Orbach/OAHS lawyers offered to settle and withdraw the eviction in exchange for Rawls staying away from the Property Manager’s office.  The crowd of her friends and supporters cheered and hugged her.  It was a small but important victory in an ongoing battle.

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