Carolyn Malone didn’t like the look of the place. The front yard was overgrown. Trash was strewn around the property.
Inside, the two-story, turn-of-the-century home was in even worse shape: She found broken smoke detectors in the hallways and bedbugs on her bedroom carpet. Rodent droppings lined the stairwell leading to the illegal basement bedrooms, where cardboard covered broken windows and mold stained the walls.
But after months of sleeping in her car, Malone, a 72-year-old retired educator, was desperate to move back indoors. So last year, when Mary Hackney, director of a Seattle transitional-housing provider, offered Malone a room in the Central District home for $500 a month, she moved in. A rental subsidy from the city of Seattle helped pay her first few months’ rent.
Weeks later, a city housing inspector, responding to Malone’s complaints, discovered 75 building-code violations at the house. Several had lingered since a previous visit from Seattle code enforcement a month before Malone moved in, when an inspector found 54 violations.
Malone’s experience was not unique. In the past four years, Steps to Ethically Profiling Stability (STEPS), the nonprofit run by Hackney, has collected at least $180,000 from three taxpayer-funded rental-assistance programs while housing its clients in homes with long histories of neglect and disrepair.
As debate over state and local governments’ handling of the ongoing homelessness crisis intensifies, authorities are still struggling to find quick and effective ways of moving people off the streets, out of shelters and into housing.
They’ve increasingly turned to temporary rental subsidies, which provide upward of $1,000 to help put Seattle’s superheated rental market within reach of low-income and homeless people. Hackney tapped into three separate subsidy programs managed by Seattle, King County and the state.
Hackney is a small player, but her record reveals weaknesses in government oversight of those programs, which allowed public money to pay for rooms in dilapidated and potentially unsafe homes.
That’s partly because none of the programs require that properties are checked for previous code violations. And while each has rules requiring some form of on-site inspection, the agencies that oversee them can’t guarantee that every property meets their own health and safety standards.
Officials at those agencies — the state departments of Corrections and Commerce, along with King County’s and Seattle’s human-services departments — were mostly unaware of the conditions at Hackney’s leased properties until informed by The Seattle Times.
While acknowledging some oversight lapses, they portray STEPS as an outlier. Existing safeguards have proved adequate to keep most subsidy recipients out of substandard conditions, they say.
To verify that claim, The Seattle Times requested records showing all addresses where rental subsidies were used in King County. Two agencies refused, claiming the addresses are personal information exempt from public disclosure. Other requests are still pending.
Had the agencies looked closer, they would have learned that some of the subsidy money ended up in the pocket of Dirk Mayberry, a property owner with such a long history of code violations that city staffers once included him on a short-list of “bad landlords.
Hackney now calls the decision to rent homes from Mayberry a “mistake,” and says she did so in desperation after losing a lease on another property. Mayberry, through his attorney, declined to be interviewed.
Those homes were seized in foreclosure and later sold at auction while her clients lived there. In the end, after public dollars were spent, Malone was evicted and ended up right back where she started: homeless.
“When you’re homeless, you’re vulnerable,” Malone said after learning the extent of Hackney’s record. “And there’s always someone waiting to pounce.”
STEPS as middleman
Years of public advocacy turned Hackney into a familiar face around Seattle. Speaking at city-council meetings and hearings, she railed against gentrification and the disappearance of affordable housing options in South Seattle.
Hackney founded STEPS in 2008. The nonprofit organization acts as a sort of middleman, leasing homes throughout Seattle’s Beacon Hill and Central District and offering rooms and social services to people who are homeless, in recovery and who otherwise have no place else to go.
Over the years, Hackney built relationships with social-service and housing organizations throughout King County, along with programs overseen by the state departments of Commerce and Corrections.
“When you’re homeless, you’re vulnerable. And there’s always someone waiting to pounce.” – Carolyn Malone
The details and the demographics of the subsidy programs vary: the Commerce and Seattle subsidy programs used by STEPS can last up to a year. The Corrections program, which serves people with felony records leaving prison who have no home to go back to, is capped at three months and $500 a month.
The number of providers like STEPS operating locally is hard to come by. Corrections has approved at least 27 transitional housing agencies in the region.
STEPS had income of $313,776 from 2013 to 2015, according to federal tax records. Hackney said she is not paid for her work as director of the nonprofit, although she did not disclose records to verify that claim.
Between 2010 and 2017, Hackney leased at least six different homes in Seattle for various lengths of time. During the rental periods, city inspectors investigating complaints found roughly 173 building-code violations at her properties. The homes also had extensive code enforcement files before STEPS clients moved in.
In that same span they issued about a dozen citations for other code failures, including junk vehicle storage, unauthorized basement bedrooms and utility services cut off when the bills went unpaid.
Seattle police logged 140 incident calls at the six homes. They visited several times looking for sex offenders who failed to register, and in response to domestic disputes, assaults and minor disturbances. Separately, medics visited at least twice in response to drug and alcohol overdoses.
Some former tenants say the lapses at STEPS properties went beyond what’s detailed in city records. They describe Hackney as a well-intended but absentee landlord who ignored complaints and disputes between residents.
Despite STEPS’ checkered history, Hackney received a multiyear federal grant to provide clean-and-sober housing for people in recovery.
Last spring, as Cesceani Quesada neared her prison release date for an identity-theft conviction, just one of Corrections’ approved housing vendors had an opening for a woman — STEPS.
Her expectations weren’t high, but Quesada said she was still startled by the trash piles she found inside her room at STEPS’ Central District house, the same where Malone would later find herself living with bedbugs. Water service was shut off due to unpaid bills a short time later, leaving tenants without a working toilet or shower.
“I was devastated, but you have to deal with it” said Quesada. “It’s this situation where you can reoffend, try one of the homeless shelters, or stay and just work through it.”
In a recent phone interview, Hackney admitted that some homes leased by STEPS were in poor condition. But Seattle housing prices limit what she can afford to lease, and STEPS has never had the resources to purchase its own property, she said.