CBS Pittsburgh
Pittsburgh Mayor Ed Gainey inspected conditions at the Maple Ridge Apartments in the city’s East Hills neighborhood after a fire at the complex killed two-year-old Praise Lemons last month.
PITTSBURGH – Two days after Christmas, a fire started at Maple Ridge, an affordable-housing complex containing Section 8 housing in the East Hills neighborhood of Pittsburgh.
The fire grew rapidly, and two-year-old Praise Lemons suffered burns all over her body and passed out from smoke inhalation. The toddler was transported to UPMC Children’s Hospital, where she died on the operating table.
“She was a light. She definitely made you smile,” her neighbor Arthur Jones told WPXI. “She was all of our favorite[s]. Everybody up here, that was our Praise. She was amazing, and she has her wings and she’s going be more amazing.”
Following the fire, questions began to be raised about the conditions of the apartment building. The heat did not work, the building was infested with rodents, and when low-income tenants attempted to contact the owners to have it fixed, their requests were ignored.
The cause of the fire is still unknown, as investigators are still studying it. However, while the city of Pittsburgh was able to determine the name of the property management company overseeing the building, it couldn’t determine the principal owners of the building.
“We know the [management company], but it’s the principals that we’ve been trying to get in touch with,” Pittsburgh Mayor Ed Gainey said on CBS Pittsburgh. “Because at the end of the day, they should be doing a much better job of taking care of this property.”
A week after the fire, CBS Pittsburgh discovered that Vitus, a major private equity group, owned the building. The firm, which proclaims on its website that it is “creating thriving communities through affordable housing,” owns over 130 low-income properties serving over 30,000 residents nationwide.
Vitus is just one of several private equity firms that are buying up affordable-housing units across the country, and many groups say that complaints such as those at Maple Ridge Apartments, where Praise Lemons was killed, are common. Nationwide, private equity firms own at least 1.6 million rental units according to analysis conducted by Americans for Financial Reform in 2022. (The number of units owned by private equity has likely grown since the study was conducted.)
In Pittsburgh, city councilman Khari Mosley, whose district includes the Maple Ridge Apartments complex, says that low-income communities of color often struggle to get private equity firms to fix problems in federally subsidized housing.
“Increasingly, we are seeing more and more private equity firms buying up affordable housing and we find people living in unsafe conditions in the units they own,” says Mosley.
Now, government officials and activists in Pittsburgh are fighting back in a big way against private equity landlords.
In October, Allegheny County District Attorney Stephen Zappala brought criminal charges against NB Affordable, a private equity firm based in New Jersey. The firm owned the 326-unit Mon View Heights.
The property lacked working fire sprinklers, and the floorboards were so weak that one child fell through into the apartment below. (Fortunately, the child survived.)
The private equity group was receiving $2.4 million a year in federal subsidies for the complex. “That money has not been used for the benefit of the people that live there,” Zappala said when announcing the criminal charges in October. “These guys, it’s almost as if they were trying to run the property into the ground.”
Housing advocates say that allowing private equity firms into the market is inherently dangerous, as these firms seek to maximize profits at all costs.
“Given that rents are set low in federally subsidized housing, these companies can only make a profit by limiting the amount of maintenance work,” says Americans for Financial Reform’s Caroline Nagy.
Private equity companies often use shell companies. An analysis by Americans for Financial Reform shows that Vitus Group is associated with over 20 shell groups nationwide.
“Bad actors hide behind shell companies and LLCs to avoid accountability for their misdeeds,” says Nagy. “When we allow private equity firms and other corporate landlords to avoid accountability by hiding under shell companies we are making a deliberate policy choice that allows them to act with impunity while tenants are kept in the dark.”
The use of private equity to buy up federally subsidized housing is now facing increased scrutiny at the federal level.
In October, when the private equity firm KKR announced that it would spend $2.1 billion to acquire 5,200 apartment units, Sens. Elizabeth Warren (D-MA), Raphael Warnock (D-GA), Ron Wyden (D-OR), and Peter Welch (D-VT) protested the move.
“Private equity firms have disproportionately pushed people of color out of affordable single-family homes and their communities through gentrification and negligent landlord practices … Whether the property is a mobile home park, single-family rental, or multi-family building, the private equity purchase playbook remains the same,” wrote the lawmakers in a joint letter to KKR.
While the Federal Trade Commission under the Biden administration made attempts to crack down on private equity’s ownership of residential housing, under the Trump administration, the role of private equity as landlords is likely to increase.
Despite the uphill efforts, Pittsburgh-area Rep. Summer Lee (D-PA) say they will continue fighting to take on private equity.
“The tragic death of two-year-old Praise Lemons is a heartbreaking reminder of what happens when corporations like Vitus put profit over people,” says Lee. “These companies collect federal taxpayer dollars while leaving families to live in dangerous, decrepit, and inhumane conditions. It’s unconscionable, but it’s not unique—this is a systemic failure fueled by greed and a lack of accountability. We cannot allow corporate landlords to prey on our most vulnerable.”
