PD Editorial: A public duty to track affordable housing compacts

Sonoma County and state officials owe taxpayers some direct answers about their handling of allegations of affordable housing fraud at an apartment complex near the airport.

And, by all appearances, they haven’t asked enough questions about Vineyard Creek Apartments or their own compliance programs.

Vineyard Creek is owned and operated by companies belonging to Bill Gallaher, a Sonoma County developer and bank chairman who personally bankrolled the recall election targeting District Attorney Jill Ravitch. Gallaher’s companies recently settled a former employee’s whistleblower lawsuit for $500,000.

The lawsuit, which named five Gallaher-owned companies as defendants, alleged that the owners of Vineyard Creek overcharged low-income tenants, gouged public agencies on rental subsidies and leased units reserved for low-income tenants to friends and relatives of the owners who earned too much money to qualify. The plaintiff, a former property manager named Mariah Clark, also claimed she was fired after raising concerns.

The confidential settlement, revealed last month by The Press Democrat, covers Clark’s retaliation claim and other alleged state labor code violations.

State and county agencies agreed to dismissal of the more serious fraud allegations provided they could be reinvestigated in the future.

Yet, as Staff Writers Andrew Graham and Ethan Varian reported, the lawsuit was kept under seal for a year so the public agencies, including the state attorney general and the county Community Development Commission, could decide whether to sign on as plaintiffs. State and county officials haven’t answered the reporters’ questions about what investigation they undertook before opting against joining the lawsuit, relying on an exemption in the state’s open meeting law for matters involving litigation.

They also haven’t talked to some potentially valuable witnesses.

Two former Vineyard Creek employees who provided sworn statements backing Clark’s account said they were never contacted by the state or county.

“If they called me,” said Jen Negoesco, a former assistant property manager, “I could take them in there and pull files from people that I specifically remember, but nobody called me.”

Dani Robinson, a former leasing agent at the property, said she wasn’t contacted, either.

Graham and Varian also reported that the county Community Development Commission made limited efforts to verify self-reported information from Vineyard Creek about its compliance with the affordable housing requirement — a condition of access to tax-exempt bonds for construction of the 232-unit complex. A state bond oversight agency stopped collecting detailed bond compliance reports in 2016.

Despite these revelations, state officials have remained silent, and county officials have shown little enthusiasm for pursuing the matter. When opponents of the Ravitch recall urged the supervisors to open an investigation, Chairwoman Lynda Hopkins said: “If the campaign or anyone else has additional evidence that we’re not aware of, that’s certainly something that the board can consider.”

Isn’t the failure to speak with potential witnesses worthy of additional inquiry?

There is a larger issue here as well. Affordable housing is desperately needed in Sonoma County and across California. Public agencies invest billions of dollars in housing projects in return for guarantees that apartments and other housing units will be reserved for low- and middle-income residents. Those agencies have an obligation to ensure that developers who get help fulfill their obligation to provide affordable housing. State lawmakers and Sonoma County supervisors owe it to taxpayers to maintain scrutiny of the public’s investments after that housing gets built.

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