New landlords bring higher rents and displaced tenants with no where to go
ABOVE VIDEO: Shaky toilet, bathroom water leaking into basement at 352 Dubuque St.
MANCHESTER, NH – The toilet rocks from side to side. A hole in the kitchen floor was “repaired” by covering it with two self-adhesive vinyl tiles. The kitchen floor is spongy. The ceiling is yellowed with age. And until a recent repair, for months septic water from the toilet flooded the bathroom and kitchen every time there was a heavy downpour.
Yet, Crystal Soto, 47, and her partner Eric J. Bresette, 44, of 352 Dubuque St., Apt. 1R, are fighting to remain in the rundown apartment they’ve called home for 11 years. Why?
“Because the rent is cheap,” said Soto. At least it was — until January, when the rent jumped to $1,535, an increase of $540 a month. “We have no other choices right now. There’s no rent out there we can afford, and we love the neighborhood. We’re like family around here.”
They reside in one of seven West Side apartment buildings owned by the same landlord who is or has evicted at least 18 people from a dozen apartments since buying them.
The people being evicted are some of the city’s neediest. Some are elderly, others are on Social Security Disability Income, and some apartments were subsidized housing. The rent hikes in the subsidized apartments exceeded what Section 8 allows and so those tenants were essentially evicted as well.
ARAA West Side Holdings of Chester bought the buildings, known as the West Side Seven, from Shelley Carita of Meredith on Oct. 27, 2021, in a $4.2 million deal.
What’s happening in this hot real estate market is not unique to Manchester.
Similar deals are being struck in other towns and cities across the state, says Elliot Berry, Managing Attorney and Housing Project Director of New Hampshire Legal Assistance. As apartment buildings and complexes are bought up and tenants either evicted or faced with “unconscionable” rent hikes, what’s becoming evident is the lack of protections for the most vulnerable renters in New Hampshire.
“It’s happening all over,” he said. “It’s like a free-for-all in terms of buying up property and charging what the traffic barely will bear.”
Instead of housing existing to meet the needs of a community, the buying and selling of these desirable multi-family units are changing hands, like commodities, purchased by investors coming in with big money “so if you’re a small-time landlord it is very hard to resist what they are paying. They’re putting out a lot of money in anticipation of big rent increases that will turn a profit,” Berry says.
He is aware of apartment buildings and complexes that also have been bought in Salem, Newmarket, Rochester and Hampton, Berry says, “especially in the I-93 and Route 3 corridor all the way to the Seacoast. The situation is dire.”
Berry said a tenant in Newmarket reported their building was sold and the rent is being increased from $750 to $1,725 a month.
“Under no circumstances should a landlord be allowed to raise rent that much at one time. That’s just unconscionable,” Berry said.
However, in New Hampshire there are no rent control laws and landlords are free to raise rents as high as they want, Berry says.
“A lot of people can’t afford it,” Berry said. “I am very, very concerned about it. It’s sickening. It’s trying to squeeze every penny out of those buildings.”
The West Side Seven
Seven buildings account for 40 apartments and are located at: 293 Amory St.; 558 Montgomery St.; 416 Rimmon St.; 352-354 Dubuque St.; 599-601 Hevey St.; 200 Reed St., and 55-57 Cleveland St. Each building is more than 100 years old, except for the Reed Street building which was built in 1940.
ARAA is a limited liability company listed with the NH Secretary of State as being based in Chester, NH, with Aligned Real Estate Partners as manager. Axel Ragnarsson is listed as Aligned’s manager, according to filings with the New Hampshire Secretary of State’s Office. Tenants believe he owns the buildings.
Requests for comment from Ragnarsson or Ryan Weiss, principal broker in Blue Door Living that manages the properties, were declined via email.
“Under the advice of our legal counsel, unfortunately, we will not be engaging at this time,” Weiss wrote in an email, on behalf of himself and Ragnarsson. He clarified that the buildings are owned by ARAA, not Ragnarsson.
But Ragnarsson talks openly on social media about his business play book as a way to achieve passive wealth. He purchased his first multi-family property while still a UNH sophomore and “caught the real estate bug,” according to his About page.
In the online description of Aligned Real Estate Partners, founded by Ragnarsson in 2016 as a real estate investment firm, he lists 341 holdings representing $38M investment portfolio in Texas, Florida, Indiana and New Hampshire, where he owns 128 multifamily units.
Another LLC, Brickleaf Properties, was registered to Ragnarsson in April, according to the Secretary of State’s online database. It features Manchester’s millyard on its website, and reflects Portsmouth in its contact information via social media. Ragnarsson has at least six other LLC’s in good standing filed with the state and says Brickleaf has holdings in New Hampshire, as well as Massachusetts, Tennessee, Arkansas and Florida.
According to an automated email generated by Ragnarsson’s Brickleaf email, he has rebranded as Aligned Real Estate Partners:
“As we continue to partner with other operators and raise capital from investors, we believe this brand more accurately conveys our positioning in the marketplace. In every deal, our utmost priority is to ensure incentives are aligned at every level – with partners, investors, lenders, vendors, and our residents. Check out our new website at www.alignedrep.com!”
Ragnarsson explains online and via his The Multifamily Wealth Podcast that he’s focused on buying apartment buildings that check off the “value-add” boxes – retiring landlord, long-term tenants at below-market rents. Such “finds” allow developers to renovate the buildings and then resell them – or hold onto them, depending on how much money they generate.
The West Side Seven – met his criteria.
Property sold, tenants given notice
On Oct. 28, 2021, a day after the sale of the West Side Seven, tenants found a “welcome letter” taped to their apartment doors. It told them there were new owners and they had 30 days to get out. Tenants reached out to Janet Aldrich, the former property manager, for help.
“Happy Thanksgiving. Merry Christmas. Happy New Year,” said Aldrich, owner of L.A. Classic Property Management, of the letter.
Initially, no evictions happened but then the landlord hiked their rents by $425 to $600 a month, effective in January 2022. Tenants went from paying about $900 to $1,000 a month to, in some cases, more than $1,500.
As former property manager Aldrich began fielding calls from the frantic tenants and continues to get calls months after the sale.
“It’s ungodly price gouging,” Aldrich said. “It sickens me.”
Where tenants didn’t grumble much about the apartments when the rent was lower, they did complain about the conditions once the rent went up and they couldn’t afford it.
“It’s a double-edge sword,” adds Aldrich. “The rent goes up and where before, the tenants didn’t complain about maintenance, they complain the rent is too high and the place is in need of repairs, and they get a renovation eviction. Now you put your foot in your mouth. I told them to pay the high rents and don’t say anything right now but a lot of them couldn’t afford it.”
Former property owner Carita says she is in favor of real estate investors making a profit.
“It’s a very tough business that is full of risk, financially and legally, and the landlord is not always the ‘bad guy.’ However, I do not support the current eviction practices that are taking place all across the city and state, essentially putting some good people out on the street,” Carita said.
“I think Manchester and the other larger municipalities should be doing more to prevent this from happening such as putting some limitations and laws in place. I also think the cities should be working more closely with small private landlords to help them keep their apartments affordable for low-income families,” Carita said.
She suggested offering incentives such as rental subsidies, property tax forgiveness, interest-free property improvement loans, or grants.
“Wouldn’t it make more sense to be proactive as opposed to reactive, and work with honest and decent, private landlords to preserve the truly affordable housing that is already in place?” Carita said.
The Rise in Renovation Eviction
Legal Aid has fielded an increasing number of “renovation evictions,” and Berry says the only legal recourse they have is to prove the renovation eviction is a sham – that the landlord really has no intention of rehabbing a building. That is a difficult hurdle to overcome.
The courts have the discretion to issue a 90-day extension for the tenant, but after that there really is nothing that can be done through legal channels, he said.
“I think we need a significant change in the law to deal with this,” he said. Last legislation session, an attempt was made to increase the 30-day notice for an eviction to 60 days, but while it passed in the Senate the House rejected it.
New Hampshire State Rep. Pat Long, who represents Manchester, says there will be another bill in the upcoming session, but that such legislation is a tough sell – partly because the landlord lobbyists are so strong. And while those operating under current regulations are not doing anything illegal, Long says there is a moral consideration.
“When does a business need to be regulated to take care of the people? Right now, there is no regulation in New Hampshire that protects the vulnerable,” Long said.
“The game now is to say you’re renovating, and then they put paint up and because of the market right now, they paint the place and maybe they don’t double their money but they make 25 percent more. So, if they bought a building for a million dollars, they’re selling it for 1.2 million just by painting,” said Long.
“And the people being asked to move out ‒ a lot of them elderly on the West Side – they didn’t have the $500 to move their stuff and store it. They had to look for help from social services,” Long said.
Berry said there have always been evictions for renovation, but they were never a major issue. Now that the housing market has created an advantageous situation for landlords, such evictions are pushing low-income renters out with no place to go.
Berry said there are those who believe once new affordable housing is built, the problem will be solved. He, however, believes the government needs to get back into building public housing.
It’s no coincidence, he said, that the homeless population exploded after the government got out of public housing.
In an effort to see if something could be done to assist her former tenants Aldrich reached out to Jessica Margeson, tenants’ right organizer with the Granite State Organizing Project. Margeson connected many of the tenants with Southern New Hampshire Services (SNHS). SNHS provided tenants with money from the New Hampshire Emergency Rental Assistance Program to cover the rents. SNHS received $100 million in federal funding.
Later, the tenants met at a few meetings to talk about what was happening. At one in April, a photo of three tenants – Soto, Audrey Rackliff of 57 Cleveland St. and Richard Giberson, 70, of 352 Dubuque St. – was taken with them holding a sign that said #Axel Evicts. That day, a Saturday, the photo was uploaded to social media.
The following Monday, Rackliff and Soto received a renovation eviction. Giberson, whose rent was increased from $890 to $1,325, received a call from Weiss. The increase, Giberson said, was $100 above what Section 8 would allow for the dingy apartment and so he, too, was essentially evicted.
Weiss, he said, told him if he took down the photo, he would halt the eviction. Giberson removed the photo from social media, but he said Weiss reneged on the deal and the eviction process continued. He ultimately lost in court because it was obvious the apartment needed to be renovated.
He was set to file an appeal when, after an eight-month search, Giberson found an apartment that Section 8, now called The Housing Choice Voucher Program, approved. It is a fully renovated studio apartment on High Street with a rent of $1,400 a month, $75 more than what ARAA was charging, but it includes all utilities, unlike his current apartment.
“I got windows that got sunlight,” he laughed. His current apartment, he said, is “a shitty, old one bedroom. The ceiling is yellow. It’s not nice.”
He also is in the same building as Soto until he moves out August 1, so he also endured the septic line problems.
SNHS, he said, is covering the security deposit. He lives on $1,300 in Social Security.
“So, I got a place to live after the first for only $279 (a month),” he said. The remainder is covered by the voucher program. “It leaves me enough to have a life.”
55-57 Cleveland St.
Three families, all related, are being evicted from the tenement situated on a dead-end street.
Audrey Rackliff, 43, her husband, Everett, and son, Austin, live on the first floor of 57 Cleveland St. Her mother-in-law, recently widowed, lives upstairs, and Rackliff’s brother-in-law, Justin, is the third family member in another apartment in the building.
All are on Social Security Disability or Social Security. Her mother-in-law, Joanne Rackliff, was still mourning her husband Carl’s death on June 6, when in early July she received her renovation eviction.
Carl Rackliff, 74, was a veteran and a great-grandfather who received income from the VA and Social Security. He died of a heart attack – which Aldrich attributes to the weight of eviction hanging over his head.
“It was the stress that killed him, literally,” said Aldrich.
Rackliff said another woman is also being evicted but she is unsure about the other two tenants.
Rackliff’s apartment is seriously in need of renovations. The entrance has newer-looking stairs, but the interior hasn’t been updated in years, except for a floating floor in the kitchen, installed by the prior owner.
The building has its problems with bed bugs, roaches, rats and more recently, groundhogs which Rackliff said is apparently her fault for putting in a garden.
Like the other apartments, it is dark and dingy with yellow ceiling tiles and bowing walls. Rackliff said earlier this year there was a leak in her bathroom ceiling because of a leaky pipe in a sink in an upstairs apartment. A repairman from Blue Door did a repair but soon after, while she was on the commode, the ceiling came down on top of her head.
They came back and put caulking in the hole but the caulking wasn’t waterproof so the ceiling gave way a second time. The third time has proven to be the charm. They tightened the clamp on the pipe and put sheet rock up to cover the hole. It’s been holding ever since.
Like the others, Rackliff said the first eviction notice she received was last November. She went to Blue Door’s Hampton Street office to pay the rent in cash, because she doesn’t have a checking account. They refused to accept cash, she said.
She went to a bank, got a money order and then mailed it to them. That’s when she received another eviction notice for being late in paying the rent. She won that case. In between, her rent was increased from $900 to $1,500 a month.
Rackliff, like the others, connected with Margeson. When the photo of her with the #Axelevicts sign hit social media, she, too, received the renovation eviction. She lost in court but, like Soto, is appealing.
510 Montgomery St.
Brenda Dias and Angelica Hisxon have been roommates for nearly 17 years. They were Aldrich’s first tenants working for Carita.
Dias said their rent was increased from $895 to $1,450 for their two-bedroom apartment. No improvements were made, she said. They paid the higher rent for a couple of months but then came the renovation eviction.
“The thing is we don’t have a lawyer and we don’t have the money to get a lawyer,” Dias said. They tried to find another place but ended up in hotels for about three months before they found another apartment at a Cilley Road apartment complex.
Originally, they stayed at the Courtyard Suites for about a month but then went to the TownePlace Suites. She said many people who were evicted and can’t find an affordable apartment are being housed there.
Staying at the hotels, especially at TownePlace, was difficult for Hixson who suffers from agoraphobia and receives SSDI. “There were so many people, so many people,” she said.
Dias, the head chef at All Real Meal on Elm Street, said when they moved into the Montgomery Street apartment, it had not been renovated. In the 17 years they lived there, she said it didn’t need a lot of fixing up. However, she said there was a lot of wear and tear.
Yet, Blue Door Living, she said, is keeping their $795 deposit because they say the walls and floor were damaged. The floor was damaged, she said, because the carpet was never replaced.
“They (the previous owner) did what was needed. No major fixing whatsoever,” Dias said.
Aldrich is taking up the battle for them. She’s suing in small claims court to get their deposit back.
“They won’t return their deposit because they said the place needs to be renovated,” Aldrich said. “They evict them to do renovations and then keep their deposit money. I’m asking for triple damages because it pisses me off. You evict them and now you go and keep their money?”
352 Dubuque St.
Late in June, Dias was sitting at her kitchen table with Margeson working on her eviction appeal.
Margeson said they heard a “blurb, blurb, blurb” and suddenly water was coming in over their feet from the bathroom, curving around a small hallway into the kitchen.
She took a video in the basement where, directly below Soto’s bathroom, dirty water was pouring down.
“It rained down from their ceiling around the tub and was coming from underneath the toilet,” Margeson said.
It was the third time that month that it happened, Margeson said, and while Blue Door has promised to fix it, they still hadn’t. Soto immediately filed a building department complaint.
Margeson said the septic line has been a problem for years. Roots from a tree, she said, damaged the pipe. Aldrich said Carita paid Roto-Rooter twice a year to clear the line which took care of it. The repair, she said, was a costly one. Carita didn’t do it, she said, because she knew she was selling the buildings.
Margeson said when Soto called Jacob at Blue Door concerning the June flooding, he told her and later Margeson when she got on the phone with him, that in his “system it says that her address is not authorized for maintenance calls.”
After the complaint was filed, on July 5, the sewer line was fixed at a cost of $22,000, according to the building department.
Soto is still looking for a place she can afford but she isn’t having any luck. Margeson said landlords say they get 25 to 50 calls on an apartment costing $2,000 a month. Those who list apartments for $750 to $1,200 a month say they are fielding 500 to 1,000 calls on average, she said.
In the meantime, Margeson said the hot real estate market is decimating affordable housing. “It’s going to take 18 months for new, affordable units to come on the market when the problem is now,” she said.
People getting help from SNHS, she said, are signing rental agreements for a year thinking that when the money runs out they will be able to find something they can afford. The problem, she said, is there is nothing out there.
Soto tears up when she talks about her predicament.
“We’ll probably be living in a tent,” she said.
The author can be reached at email@example.com
This article is being shared by The Granite State News Collaborative, as part of its race and equity initiative. It was co-produced by GSNC and its partner Manchester Ink Link. For more information visit collaborativenh.org.
RESOURCES FOR RENTERS & LANDLORDS
Call 2-1-1 for assistance
Visit CapNH.org to find your local Community Action Partnership (CAP) agency
New Hampshire Emergency Rental Assistance Program