Houses don't become dilapidated overnight. It takes years of neglect to turn a grand old mansion into a fire and safety hazard. Broken windows get duct-taped over, plumbing leaks don't get fixed, failing wiring goes unrepaired. Good landlords keep their part of the bargain. Bad ones just take the money and run.
Eric Hilton is about as bad a landlord as you could find. A repeat offender at every court in the city, Hilton has hundreds of recorded violations on his eight University District propertiesand those are just the ones people have complained about. He owes the city of Seattle at least $78,000 and will likely soon stand trial in Seattle Municipal Court for 16 misdemeanor land-use violations. Last year, Hilton filed for bankruptcy to avoid paying his fines; but that tactic backfired, and a federal trustee is currently selling off his property to pay his numerous creditors. He's been charged repeatedly in King County court with harassing or retaliating against tenants; once, a particularly egregious harassment charge earned him an unprecedented two-day jail sentence. But for the most part, Eric Hilton has gotten away with abuse, retaliation, and repeated violations of the city's land-use and housing codes. Over a span of nearly two decades, he has made a career of evading the city's grasp.
Hilton isn't the kind of guy you'd peg as a convicted criminal. Pasty-faced, bald, and just this side of scruffy, the diminutive landlord is given to wearing baggy, ill-kempt clothes even in a roomful of jackets and ties. He showed up for a recent court hearing half an hour late wearing jeans, a red nylon jacket, and a fanny pack strapped backward around his waist. When I attempted to approach him, he spat, "Leave me alone, goddamn it," and demanded that security guards call the police to stop me from "harassing" him. Then he called me a bitch. Needless to say, Hilton refused to comment for this article.
The occasion for Hilton's rare appearance in a federal courtroom that Friday morning two months ago was a desperate, last-ditch attempt to recover some of his property, taken over by a federal trustee of his bankruptcy estate in January 2002. It was the end of a long and convoluted road.
The state of his dilapidated rental property.
photo: Stevan Morgain
RICH KID MAKES BAD
Hilton started down that path nearly two decades ago, when the soon-to-be-landlord, now 39, was barely out of his teens. Hiltonthen known as Eric Kapusygraduated from Bellevue High School in 1981. Classmates remember him as a poor little rich kidhe lived in Yarrow Point, on the "rich side" of Bellevue, and his parents, Emery and Hildegard Kapusy, made sure he didn't want for anything. The Kapusys started buying houses for their son in Seattle's University District in 1984, and it didn't take long for Hiltonwho changed his surname in 1985to start racking up a massive violation file.
The city's Department of Design, Construction, and Land Use (DCLU), which is responsible for ensuring that properties are fit to live in and responding to complaints, first cited one of Hilton's houses in January 1986. Even then, the violations were far from routine. One home, on 11th Avenue Northeast, was contaminated with leaking sewage. Another, on Fifth Avenue Northeast, was filled with gas from a broken sewer pipe. Several went months without heat or working smoke detectors.
The violations, hundreds in all, reveal a pattern of neglect and missed opportunities. Identical violations, ranging from missing peepholes to broken windows, appear in DCLU files again and again, apparently unfixed for years. Although DCLU code enforcement manager Bob Laird says landlords "should not be getting a certificate of compliance if all the conditions haven't been corrected," that seems like exactly what happened. Problems would be investigated, violations would be noted, and the property would be certified as habitable again and again.
Over the years, Hilton became notorious for dividing houses into 15, 18, or 20 "apartments," which he created by bisecting existing rooms with plaster or quarter-inch-thick paneling. As far back as 1987, according to newspaper reports, Hilton was renting his Fifth Avenue house to 15 tenants, charging one man $20 a month to live in a basement hallway. A 1988 complaint by the Seattle Fire Department, referring to Hilton's house on 18th Avenue, alleged the landlord was "sidestep[ping] safety regulations and overcrowd[ing] an unsafe building for financial gain." And a full 15 years later, according to court documents, Hilton was renting his house on 12th Avenue to 14 tenants, who lacked so much as a living room or a dining area.
Samantha Barrett can attest to the deplorable conditions at Hilton's properties. An Americorps volunteer, Barrett moved into his 18th Avenue house in 2000 and describes it, frankly, as "a shithole." Paint, she says, was splattered across the carpet, and the kitchen was covered with grime and filled with junk. But Hilton insisted the place would be fixed up within a month and offered to let her help him for a break on the rent, she recalls. Reluctantly, Barrett says, she agreed. "I really didn't have any other options," she says. "It was that or sleep in the street." And it was better than the first place Hilton showed her, she claims, where flames shot out of the furnace. Barrett handed Hilton a money order for her deposit and first and last months' rent and took off for Thanksgiving vacation.
When she got back, Barrett found a new roommate waiting for herEric Hilton. When Barrett demanded to know why Hilton had moved into the house, which he'd told her was for women only, "He said he lived at all his units, and he was doing the most remodeling here, so he might as well live here," she says. He replaced the kitchen stove, which worked fine, with another one just as old and battered as the first, she recalls. When the toilet overflowed, not only did Hilton fail to fix it, "He decided to lay concrete in the bathroom. So not only was the toilet still overflowing, we couldn't get into the bathroom," Barrett says. Finally, "he told me he had no intention of remodeling the buildingit was fine as it was."
I really didn't have any other options," says Samantha Barrett, a former Hilton tenant.
photo: Stevan Morgain
Soon after that, Barrett says, she discovered Hilton had lied to her about something else. When she went down to the basement, which she says Hilton had told her was a laundry room, she discovered a group of men living there. She says there was graffiti all over the walls: "Things like 'murder' and 'I am the Green River Killer.'" That did it: Barrett threw her things into trash bags and fled, leaving an address where Hilton could return her deposit. She had lived at the house for just two weeks. Although she tried every avenue, including small claims court, Barrett says Hilton never returned her money.
From the outside, the turn-of-the-century wood-frame house where Barrett lived looks salvageable, even homey. But that impression is deceptive: According to Rik Jones, the real-estate agent hired to dispose of Hilton's property, repairing the internal and structural damage to the house will cost between $150,000 and $200,000. In January, it went on the market for $375,000several hundred thousand less than similar houses down the street.
If the house on 18th Avenue is disintegrating from within, the one on 15th looks to be imploding. Two balconies are losing a slow war with gravity, and the entrance is barricaded by a jungle of ivy and blackberry brambles. In an affidavit, Jones stated that he was "shocked" to discover people living at the house. "I was shocked to find this because the 15th Avenue property has no central heat source; exposed, leaking plumbing pipes; lack of running water except for one operable sink and toilet; numerous broken windows; and general filth," Jones said.
On 12th Avenue, the story is much the same. The smaller of the two 12th Avenue houses, vacant except for one tenant during a January inspection, hasn't had gas or running water for months. Mattresses lay in piles inside minuscule sleeping rooms, blocking out the light from tiny windows that look too small for a person to shimmy through. The kitchen "cabinet," a cheap wire shelving unit nailed to one wall, is groaning under plastic water bottles; the stove and floor are clotted with filth. Useless smoke detectors and wires hang lazily from the ceiling; the electricity, at least, is on.
Hilton's house next door, notorious among neighbors as a haven for drug dealers and shady characters, is also visibly crumbling. According to Rusty Miller, a writer and Vietnam veteran who lived at the property, Hilton had made no repairs to the house in at least a year. "If it's not deemed uninhabitable, then DCLU is going to have to revise its definition," Miller says. Although the drug activity had reportedly subsided in recent months, at one point, things got so bad that the tenants in Hilton's property next door boarded up a door to the basement to keep people from breaking in and crashing on their floor, the remaining tenant says. Even now, the ground between the two houses is littered with hypodermic needles.
CRIMINAL HARASSMENT, CHAIN SAWS, AND BANKRUPTCY
Hilton's erratic behavior didn't do much for tenant stability. Over the years, several tenants filed complaints with the police, alleging that Hilton forced them out on little pretext, stole their possessions, and removed the doors to their apartments. In 1998, a jury convicted him of criminal harassment for evicting a tenant without just cause. Besides locking the tenant out of his home, Hilton had removed all his property, leaving him homeless and without so much as a change of clothes.
Rusty Miller says Hilton "enjoys the ability to determine the living conditions of other people."
photo: Stevan Morgain
Miller, who says Hilton threatened to evict him, says the landlord loved nothing more than to prove he was in control: "He enjoys the ability to determine the living conditions of people who may not have other options."
Hilton was no master of subtlety. When he found out his property was being sold, he shut off the gas to all eight properties, leaving tenants without heat in the middle of January. Then he showed up with a chain saw in the middle of the night at the 18th Avenue house (and later at the 15th Avenue property) and sawed down the "For Sale" sign Jones had posted. At the 18th Avenue property, Hilton built a fence to keep the real-estate agent off the property. "He left me a message saying, 'If you ever come on my property again, I'm going to have you forcibly removed,'" Jones says.
But for all his violent and often bizarre behavior, Hilton clearly knew how to work the system. For example, he learned that the city couldn't penalize him if it couldn't track him down. So instead of working with the city, Hilton disregarded summonses, failed to show up in court, and ignored the city's efforts to collect thousands of dollars in fines. Although the city proceeded without him, finally winning a $78,000 judgment in municipal court, it still didn't get its money: Shortly after the city won its judgment, Hilton filed for bankruptcy, claiming to have no assets of any kind.
How did he get away with it? For years, Hilton created limited partnerships to conceal his ownership of the properties. Because he was just the agent, not the owner, of the partnerships, Hilton could legally claim he owned nothing. Recently, United States Bankruptcy Court Judge Thomas Glover rejected that claim, ruling that the properties did belong to Hilton. But Hilton continues to reap the benefits of his supposed destitution: Even now, despite his wealth, Hilton retains the services of a free public defender, paid for by the city of Seattle.
Hilton was smart in another way: Unlike most landlords, he wouldn't take checksonly cash or money orders. The reason, according to Denice Moewes, attorney for the government trustee charged with distributing Hilton's assets, was that Hilton didn't want the money to be traceable. In his bankruptcy filings (which Moewes, in a declaration, called "false in almost all respects"), Hilton claims to have no income of any kind. If that turns out to be untruewhich seems likely, given the number of tenants who say they paid rent to himhe will have to face the Internal Revenue Service, which could become a creditor for the taxes owed on income Moewes estimates at $250,000 a year. In the end, Hilton's claims of poverty could turn out to be a self-fulfilling prophecy.
Hilton also showed an astonishing familiarity with the city's land-use code. He learned what DCLU inspectors looked for, and he made sure his properties just barely met their standards. For example, although the smaller 12th Avenue house has no living room or common area, it appears to be legal under the land-use code, because it has at least one room (a bedroom) larger than 120 square feet. "We approved these rooms," DCLU inspector Steve Horswill acknowledges. Over the years, Hilton has learned exactly what he can get away with. In the process, he's written the textbook for every bad landlord in Seattle.
WORKING THE SYSTEM
How could a landlord get away with so much for so long? The culpability for Hilton's many misdeeds isn't his alone. Despite his recidivism, the city has agreed to work with Hilton again and again, granting him extensions to fix up conditions that have gone unremedied for years. A basement stairway in one house on Fifth Avenue Northeast lacked a handrail for 15 years; the front door to another house didn't lock for eight. As recently as January, Hilton tried to get his bankruptcy case dismissed, vowing to "work with the City of Seattle to resolve the Property Maintenance delays, caused by illness," and settle with the city for the $78,000 he owes. "Even after the judge ruled against him, he was saying we could work out a deal," Moewes says. "Finally I said, 'Look, Mr. Hilton, you've had four and a half years to fix your problems and you haven't done it yet. And I'm going to believe you're going to fix it now?'"
DCLU's Laird calls his job of code enforcement a "resource allocation system," noting that the city has just 11 employees to inspect Seattle's estimated 140,000 rental units. And the city has its own reasons to work with landlordseven, or perhaps especially, the worst. Whatever else you might say about him, Hilton did provide affordable housing: Most of his rooms rented for between $200 and $300 a month, dirt cheap even by University District standards. DCLU walks a fine line between enforcing the code and putting people on the street; sometimes, they acknowledge, that means overlooking less-urgent violations. "Many of these people are one step from the street. We're not unmindful of that," says Jim Metz, head of DCLU's tenant assistance division. "There's always that tension between enforcing the code and the human impact" of being too rigorous, he says. The smaller 12th Avenue house is a good example: Despite dozens of violations, Horswill says DCLU would probably give Hilton a chance to fix it up, if it had heat and running water. But eventually, he says, even DCLU's deep well of patience runs dry.
Before DCLU inspectors can look into a problem, they have to know it exists. The problem is, DCLU doesn't have mandatory inspectionsit relies on tenants to let its inspectors know when problems arise. But tenants have every incentive to keep quiet. Yes, retaliating against tenants is illegal. But tell that to tenants whose landlord has said he'll kick them out if they call the health inspector. "Tenants' concern about the potential consequences to them causes certain tenants to not want to allow inspections," Laird says. And because DCLU has to have permissionfrom a landlord or a tenantbefore its inspectors can go onto a property, DCLU often doesn't find out about a problem until it escalates into an emergency. "We are virtually compelled to get a complaint from a tenant before we can enter," Metz explains. "It's why Hilton has been so successful," Moewes says. "The people who would normally be complaining aren't in a position to do so."
Legal avenues are, for various reasons, similarly constricted. Though tenants have a legal right to sue if a landlord retaliates against them, in practice, Metz says, "people don't sue. I don't know of anybody who's pursued a private right of action, with the possible exception of Mr. [Art] Skolnik's case." Skolnik, a local architect and preservationist, sued Hilton on behalf of his son, who was forced to leave a Hilton property in 2001. Under the law then in effect, Hilton was supposed to pay his low-income tenants $2,000 in relocation assistance. Skolnik still hasn't seen a single dime.
Moewes calls Hilton's tenants "fringe players of society: They probably know it's illegal, but I don't think they have the means to find an attorney or the knowledge to put themselves in that system." In a court document, Moewes noted that many of Hilton's tenants appeared to be physically or mentally disabled. Many are elderly; one is a World War II veteran. "Mr. Hilton appears to have preyed on these individuals," Moewes said.
And sad as it may sound, tenants are often right to be afraid. DCLU directs displaced tenants to housing providers like the Seattle Housing Authority (SHA), which puts dislocated and homeless people at the top of its waiting list for public housing and Section 8, a rent-subsidy program. But that safety net is full of holes and shrinking fast: The waiting list for public housing contains some 3,500 names, the Section 8 list has 8,000. Being at the "top" of either list is hardly a golden parachute. Hundreds of other homeless or soon-to-be-homeless people also qualify, and the actual wait, according to SHA spokesperson Virginia Felton, is "anywhere from a couple to three or four months."
Relocation assistance, required when the city forces tenants to leave their homes, does little to augment the city's frayed safety net. Until recently, the responsibility for paying $2,000 to low-income tenants (and two months' rent to those who aren't) fell to landlords, an oversight that meant many tenants not only lost their homes, they had no financial cushion to help them find the next one. (Although the city could sue owners who failed to pay the assistance, that money went to the city, not the tenant.) Thanks to recent legislation, the city will pay tenants $2,800 out of a revolving fund that will be replenished by landlords. Now that paying tenants is the city's responsibility, "you better believe we're going to collect from the landlord," Metz says. But the fact is, the assistance is often too little, too late. Before he moved out, Hilton's former tenant Miller expressed concern about the future. "We're not going to get relocation assistance until we're out of here," Miller said. "It's going to be difficult for some of us to get a new place without money in the fist."
The money may seem like a lot to people accustomed to scraping by with rents of $200 or $300 a month. But that newfound good fortune is somewhat illusory. First and last months' rent plus deposits, moving costs, hotels, and utility relocation fees can bump the total cost of a move to well over $1,000. Then there's the question of replacement housing. Most rooms go for $300 to $500 a month, more than half again what Hilton's tenants paid. "If you're doubling your rent payment, it's not going to go very far," says real estate agent Jones, who's had the uncomfortable task of informing many of Hilton's tenants that their homes are about to be sold out from under them.
MANY TENANTS, FEW SOLUTIONS
And until DCLU inspections are mandatory, no amount of relocation assistance will be adequate. Views differ on how stringently a mandatory inspection program should be enforcedthere's always a tension between toughening inspections and increasing tenant displacementbut nearly everyone who advocates for low-income tenants agrees that the current system is inadequate and broken. When tenants don't complainand they have significant incentives not to do soproblems don't get fixed.
The city did have a mandatory system as recently as the mid-1990s. A 1990 ordinance required most landlords to pay a fee to register their properties with the city; in addition, the worst landlords had to submit to mandatory inspections. Landlords sued to stop the program, claiming the fee was actually an illegal tax that everyone had to pay, although only some properties were inspected. They also alleged the city was profiting from the fee, because it generated more revenue than the cost of the program. Finally, the landlords claimed the inspections were illegal, because the city did not have warrant authority to enter private buildings. Eventually, the city settled, agreeing to shutter the program and not seek a similar fee until at least 2005.
But the settlement didn't preclude the city from funding a mandatory inspection program in some other way. And it didn't say that the city had to stop seeking warrant authority from the Legislature, although previous attempts to gain the authority had fallen flat. Theoretically, DCLU could implement a mandatory program before 2005 and pay for it out of pocket, Laird says. He estimates such a program would "double, if not triple, the size of the inspection program," which forms part of the $2.6 million budget for DCLU's housing and zoning group. Such a program could be a stopgap measure until 2005, when the city could again authorize a (much lower) landlord fee. Seattle City Council member Judy Nicastro, who considers herself the strongest voice for tenants on the City Council, says she supports the idea of inspections but cites the lawsuit as one reason the city hasn't moved forward.
Most tenants know to call the police department when a landlord is harassing them, but many are unaware of their rights and their landlords' responsibilities. Better awareness of retaliation laws would go a long way toward breaking the culture of fear and silence that surrounds the most vulnerable tenants. The police department's community service officers (CSOs) have historically handled retaliation cases; but their workforce was recently cut by two-thirds and dispersed across five precinct offices. Peter Stalgis, the north precinct CSO, says he gets more calls on landlord-tenant problems than any other issue. Generally, he says, he tries to mediate disputes. If that doesn't work, he tells tenants about their right to sue and refers them to the city attorney's office, which can pursue criminal violations. Mike Finkle, who supervises the city attorney's harassment advocate, says he saw just a handful of criminal cases in 2001. The city attorney's office doesn't represent tenants in civil cases and refers tenants who call to the Tenants Union, according to Kathryn Harper, a spokesperson for the office.
Another option DCLU has, but has not often exercised, is to seek to have the Superior Court appoint a receiver, such as a nonprofit specializing in low-income housing, to take over the property. The receiver would be authorized to lease the property, collect rent, pay debts, and make repairs without kicking tenants out of their homes.
As for the Eric Hiltons of the worldthe landlords who refuse to fix up their property even after repeated violation orders, warnings, and finesthe answer is more complicated. If affordable housing were more plentiful, tenants wouldn't need the kind of housing Hilton provides. One small solution, suggested by Nicastro, would be to use the fines paid by landlords to fund rental assistance.
And what about Eric Hilton himself? When his debts are paid, it's quite likely Hilton will be able to regain some of his property; under the state constitution, the court can't take away a person's property rights. But Moewes says the court will set limits on how and when Hilton can get his property backthe bankruptcy estate will hand the property over only if and when DCLU certifies that all the remaining houses have been brought into compliance. That might not fix the problemafter all, DCLU can't monitor an individual landlord continuously, and it can't inspect his properties under current law. But it will be a start. It will be up to the city to make sure Eric Hilton and others like him don't keep getting away with it.