A large-scale property manager promised Washington tenants high-end apartments with affordable rents and instead subjected them to mold, mice, mothballed amenities and unexpected rent hikes, the state alleges in a lawsuit filed Friday.
The Washington attorney general’s office filed the suit in Snohomish County Superior Court, accusing California-based FPI Management and several property owners of violating state consumer protection law at five Western Washington buildings. The apartments, all for people 55 and older, use federal tax credits to offer affordable rents.
The state accuses the property management firm and building owners of misrepresenting the quality of the apartments and of failing to disclose to tenants how their rents might increase.
“This is a pretty systematic and consistent level of fraud, essentially, on a particularly vulnerable population,” Attorney General Nick Brown said in an interview.
Representatives for FPI did not immediately respond to requests for comment Friday.
Vintage Housing, the company that owns four of the five buildings, said it “disputes the Attorney General’s allegations and will address them in court.”
“Vintage housing has been a part of providing housing in Washington for over 25 years,” Senior Vice President Maureen Picarella said in an email. “We take seriously our role as providers of affordable housing to seniors and the communities we are part of. We will work with our property manager, FPI, to address any issues.”
The owner of the fifth building, AMCAL Multi-Housing, declined to comment.
The case raises alarms about rental costs and conditions at FPI-managed buildings in Everett, Arlington, Mill Creek, Tacoma and Sequim — five buildings among FPI’s portfolio of 87 in the state, according to the attorney general’s office.
Retired educator Susan Kamin moved into the Everett building in 2017, when, she said, marketing materials promised “luxury apartments for mature adults” with “countless amenities.” On a tour, staff wouldn’t show her an apartment, but they showed her other parts of the building and told her rent would be limited based on her income, Kamin said in an interview. On a fixed income from Social Security, that stability would be key.
But reality looked far different. Kamin’s apartment wasn’t ready, and building managers directed her temporarily to another unit that had grime, dirty appliances and bugs, she said. Her permanent apartment was in better condition, but common spaces were dirty, equipment in the building’s gym and other common rooms was dated and broken and rent increases she struggled to afford soon arrived.
Picarella, from Vintage Housing, declined to comment further on specific allegations, citing the pending legal action.
The attorney general’s office says tenants across the five buildings in question faced similar concerns and a lack of clarity about how their rent could increase.
The properties are part of the widely used Low Income Housing Tax Credit program. Under that program, property owners who receive tax credits must cap the rent in some of their apartments to be affordable for people making a certain share of area median income in their county, for example 60%.
The federal government sets those income levels each year, and those numbers dictate the maximum rent price — not the individual tenant’s actual income. That’s distinct from some other types of affordable housing.
The case alleges that although FPI advertises affordable units, “it does not explain or adequately disclose” that it will calculate rent based on a share of area median income, “which is often significantly more than the fixed Social Security or pension incomes many senior LIHTC tenants must live on.”
Once housing becomes unaffordable, older tenants can have a particularly difficult time moving out because of physical limitations and fixed incomes, the state argues.
Kamin said she received rent increases, sometimes twice a year, and the monthly cost for her one-bedroom apartment reached $1,220 by the time she moved out in 2023. Earning just $1,500 in monthly Social Security income, she borrowed money to cover the rent until she finally found a subsidized rental elsewhere.
With limited affordable housing in the region, “They know people have nowhere to go,” Kamin said of FPI.
It wasn’t immediately clear Friday how often other landlords offering tax-credit units explicitly state those details in rental applications. But Brown said that “given both the population and the unique qualifications that anyone would have to have to rent this property, the company had an obligation to fully disclose how rent calculations could be increased.”
“That certainly wasn’t done here,” Brown said.
Renters also faced ongoing maintenance issues, the state alleges.
Despite promises of “brand-new appliances,” “resort-style” features and secure buildings, renters found a “starkly different” reality with persistent maintenance issues and security concerns, the lawsuit claims.
“Many tenants find their units are dirty, with broken microwaves, chronic water intrusion and leaks, mold, missing window screens, worn carpets, and torn kitchen flooring, among other issues,” the lawsuit said. “Some tenants are shown a ‘model’ unit that is significantly nicer than the unit they ended up receiving.”
Joe Papenbrock, 64, who rented an FPI-managed apartment in Tacoma, said he and his neighbors saw mice scurrying down the hallway as a rodent problem spread throughout the building. Management didn’t address the problem fully with an exterminator for two years, Papenbrock said.
As rents increased, Papenbrock thought, “I’m paying you more money, but I’m not getting more service.”
Brown said his office communicated with FPI about its concerns before filing the lawsuit but was not able to “reach an agreement.”
The state asked a judge to order penalties up to $7,500 per legal violation, plus $5,000 more per violation in enhanced penalties based on the age of the tenants. FPI and the other defendants will have the chance to respond to the allegations in court.
