The City Council is urging Detroit’s building department to inspect all residential and commercial properties owned or managed by a long-criticized landlord operating under a legal settlement to resolve fines and subpar conditions at hundreds of properties.
Detroit Council Member Mary Waters initiated a resolution unanimously approved Tuesday as a means of holding Detroit-based Munoz Realty, its affiliates and its owner, Gaston Munoz accountable.
“The guy (Munoz) has a lot of properties. We cannot continue to allow landlords like that to put our people in deplorable conditions,” Waters told BridgeDetroit. “We can’t tolerate that anymore.”
The council in July approved a legal settlement in connection with a lawsuit against Munoz and his real estate firm. Waters was among three council members at the time who voted against the agreement, saying it wasn’t tough enough and incentivized bad behavior. Members Renata Miller and Denzel McCampbell also voted no.
The agreement stipulated that Munoz abate 299 properties on a monthly schedule and get them re-inspected and certified by the city’s Buildings, Safety Engineering, and Environmental Department (BSEED). Once the properties are rehabbed, the city will cut Munoz’s blight ticket fines — totaling roughly $460,000 — in half. He must still pay off other debts for water bills, taxes and inspection fees.
Only 34% of the more than 453 properties Munoz owned or managed, at the time the lawsuit was filed, had a required certificate of compliance from BSEED showing the properties had been inspected and were safe to live in. That left 299 properties in violation of both city and state laws, according to the legal complaint.
A spokesperson for BSEED did not immediately provide BridgeDetroit with a comment in response to the council’s resolution or an update on the progress under the settlement.
Compliance enforcement challenges
The resolution approved Tuesday says the comprehensive assessment of Munoz’s properties would help determine compliance with city rental and health and safety rules and that it should give special attention to occupied properties, particularly those housing children or seniors.
The council also wants verification that all properties being addressed under the settlement are brought into full compliance and that repairs are completed properly and within reasonable timeframes. The resolution also seeks regular written reports for the council to detail progress toward compliance and the status of repairs, abatements, violations and more.
Waters said that the settlement addresses 299 properties but “that’s not enough. There are more, she said, and “we want them (BSEED) to inspect all the rest of them.”
“We need all these properties brought into compliance,” said Waters, adding she wants BSEED to complete the comprehensive inspections “as quickly as possible.”
But council members also noted that the department doesn’t have the resources and that funding for BSEED will be a priority during the city’s next round of budget talks to ensure that the department is adequately staffed.
“We have to find out from BSEED what it will take to get these inspections done,” Waters said.
In 2022, BridgeDetroit and the Detroit Free Press reported on tenants living in Munoz-managed properties who struggled to get repairs and dealt with strong odors and dark brown sludge in their basements. At the time, Munoz said he had a system in place for tenants to report repairs and dismissed the problems tenants raised as hearsay.
In July, he said in an email that he’d follow the approved settlement terms as stated. Munoz did not immediately respond Tuesday to a request for comment on the resolution or progress so far under the settlement.
The legal settlement with Munoz is similar to other agreements that have included lawsuits involving a large portfolio of blighted properties. The city last year also sued Real Token, or RealT, a blockchain real estate firm that owns rentals with hundreds of violations.
The cryptocurrency real estate firm has since said it plans to sell off its entire portfolio of about 700 properties.
In August, Detroit rolled out a new strategy to ensure thousands of one- and two-family rentals are certified as safe to live in.
The city’s rental ordinance requires that landlords have what’s known as a certificate of compliance from BSEED to legally operate. But only a third of rental properties are registered, and even fewer have passed inspections and obtained an active compliance certificate.
Beyond unveiling a five-point plan to track illegal properties and send out notices multiple times before certificates expire, the city also has a new way for tenants to report building issues. They can submit complaints online anytime at www.detroitmi.gov/TenantSupport.
Waters said that with adequate enforcement historically lagging, some landlords have resisted compliance measures.
“They don’t want to do it. It’s kind of like, “I’ve been doing it this way all this time. Why should I have to do that?’ Well, there’s some new sheriffs in town,” she said.
Waters said she’s also talking to state lawmakers about legislative actions to better regulate landlords who gain ownership of properties under multiple limited liability corporations.
Getting a legal opinion
Some council members consulted the Law Department during Tuesday’s meeting to explore more permanent ways of dealing with habitually delinquent landlords like Munoz. Council President Pro Tem Coleman A. Young II inquired about what the council can legally do to restrict noncompliant landlords from conducting business in the city, such as passing additional ordinances or debarring landlords.
“How many times do we put up with that before finally you can’t do business here anymore?” Young said. “There’s lives at risk.”
District 6 Council Member Gabriela Santiago-Romero told Young that his questions align with what she’s asked since the issues with Munoz arose. She was met with similar recommendations at Tuesday’s meeting: Relying on city ordinances and using the court system as an additional enforcement arm.
“But again, that’s not great because they might continue to be terrible landlords,” she said. “So really, we need the city, the administration, to enforce to make sure that we are enforcing our current policies.”
David Whitaker, the council’s legislative policy division director, underscored the economic incentives that come with putting “the cameras on enforcement,” and pressuring noncompliant entities with increased visibility.
“Oftentimes, the best way to deal with a callous owner is to hit them in the pocket, and when people don’t rent, then they get better,” he said. “That’s so difficult because the conditions of these properties are already terrible, and we have folks who just want to roof over their head and try to figure out everything else afterwards.”
This kind of transparency is something District 2 Council Member Angela Whitfield-Calloway has been pitching to overcome BSEED staffing limitations. She said she’s been advocating for a Zillow-like dashboard where prospective renters could view compliance information and virtual tours of available homes.
“I want all the information up front before we continue to rent properties,” Whitfield-Calloway said.
