Essex Village buyer wants to hike rental prices to Short Pump costs

HENRICO, Va. -- At 75, Sarah White is ready to relax at home, but she describes her three -bedroom apartment at Essex Village as anything but comfortable.

"No, I don't. Not unless they tear it completely down and rebuild it, cause I think it's rotten," White said.

Ernst Valery, the owner of a Baltimore based investment firm called SAA/EVI Development, is trying to buy the Section 8 property and also get the county to support his renovation proposal.

Valery told CBS6 he's not considering completely tearing down the property, but he would do a full rehab if HUD supports a rent increase to fund the renovations.

Under Valery's proposed plan, after renovations a three-bedroom at the Section 8 complex would cost up to $1,445 a month in rent.

A one bedroom would cost $1,055 a month in rent.

Those numbers are higher than what HUD calculated for fair market rent in Henrico in 2018.

He said the money will allow him to fix kitchens, bathrooms, the sewer system, and walls -- among other things.

County Manager John Vithoulkas said the rent increases don't sit well with him since taxpayers are already paying $5.4 million annually to subsidize the complex.

"So, in this case we have a new proposed owner that is going to increase rents even more than the rents that were proposed to be increased by the current owner who we've had many problems with," Vithoulkas said.

Valery said the amount of rent residents would pay wouldn't change, but the amount subsidized by taxpayers would increase by about 40 percent.

Comparison apartment shopping shows that one to three bedroom apartments in the Short Pump area can be found for $960-$1420 per month.

In Henrico's East End one to three bedroom apartments can be rented for $765-$1000 per month.

That is something that Vithoulkas simply doesn’t understand.

"You take the highest upper end apartment complexes in Short Pump and you have an equivalency now for what is being requested for Essex Village," Vithoulkas said.

Vithoulkas said the county really wants the opportunity to sit down with the secretary of HUD Dr. Ben Carson, but HUD hasn't agreed to that yet.

Previous issue at Essex Village

Congressman Donald McEachin has sent multiple letters to Carson, asking him to stop doing business with GHC Housing and its management company that manages Essex Village, PK Management. HUD paid PK Management company more than $150 million to subsidize the rent of residents at low-income housing complexes across the country in 2016.   The Ohio-based company runs three Section 8 facilities in Henrico County including, Essex Village, Woodland Crossing and Hope Village.

The company receives more than $7 million a year from HUD to subsidize rent at its housing complexes in the Richmond-area, but multiple WTVR CBS 6 investigative reports have revealed multiple issues at the properties.

It was Vithoulkas who put the wheels into motion after a visit to Essex Village last summer. He put Deputy County Manager Colonel Doug Middleton in charge of a task force aimed at improving the quality of life at the complex.

In November, county building inspectors opened 140 code violation cases at Essex Village.

The fire and police departments found that they are roughly two times more likely to respond to calls for service there than anywhere else in the county.

In January, inspectors from the U.S. Department of Housing and Urban Development gave Essex Village an "F" grade.

During the most recent inspection on August 10, HUD gave the complex a score of 74.17 out of 100, which is considered passing.

However, HUD noted the inspection results for individual apartment units are still "unacceptable" and "represent a serious risk to the health and safety of the tenants."

Essex Village received 22.12 points out of a possible 44.26 points for apartment units.

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