The real estate industry has a reputation as bad as the legal industry, and I have often been asked whether I spent my career representing slum lords. I have always said, no, and that’s an honest answer. There are many ways of making a living, and making a living in the affordable housing business, where the tenancy can be difficult, the neighborhoods rough, and the multiple governmental regulators always irrational, is far from the easiest.

Yes, it’s true that a lot of money can be made in the affordable housing business (and it’s certainly true that most of my clients were much wealthier than I am), but it is money made through taking on a lot of risk and a lot of work, and operating through governmental programs that, by the way they were constructed, provide a more than adequate living to successful industry participants.

Just a simple and obvious example. If you have a company that manages a government assisted housing property, your management fee must be approved by a government agency as reasonable. You accept the fee, and you probably realize that your profit is minimal, if it is there at all. But when you add a second property, you find out that you have earned a profit, because you already rent your office, you already pay your staff (other than on-site staff), you already have your computer system in place, and so forth. Your profit increases as you add properties until one day virtually all of the marginal management fee becomes profit. And there are many companies that manage hundreds of properties.

In addition, most of the people I represented in this business did have a social conscious and chose this particular niche because they thought they could serve a broader purpose, while not compromising their own financial positions. Many, like me, when they left school (undergraduate, law or graduate business school) went to work for non-profits or government agencies in the city planning, affordable housing field. This is where they learned what they needed to learn to feel comfortable entering the field, and where they made the contacts that they were able to use as their businesses grew.

Sitting here today, I can only think of two times that I felt uncomfortable representing a client. Not that the details are important, but here they are:

(1) I was approached by a man who lived in western Washington state, and who owned a property in central Washington, on the other side of the Cascades from where he lived. The HUD area office in Seattle was after him for not maintaining the property and were threatening to cancel the subsidy contract on the property, and perhaps to foreclose on the mortgage and take the property from him. I hadn’t been to the property, but I had seen some photos and had had a lot of conversations with him, and with HUD officials. We tried to respond to every demand, but weren’t getting anywhere. I couldn’t figure out why.

Finally, a lawsuit was filed in federal court in Yakima Washington. I don’t remember the details of the litigation, but I flew out to Washington and, for the first time, saw the property. I was aghast. I don’t remember ever seeing a property that looked as bad this one did – it was as if it was staged to look bad. It was clear that we should lose this case, although I had to do my best. My client was put on the stand by the government, and he was perhaps the worst witness you could imagine.

We lost the case. He wanted to appeal. I refused.

(2) I had a client from North Carolina who bought a well known DC property, which had had a very checkered history. It started out as a luxury building, became extremely run down, and then received a government rental contract to provide sufficient funds to fix part of it up for lower income tenants.

I got involved when my client was sued by the government in federal court here in DC. The basic claim was that the property was in subpar condition, and had failed a series of HUD inspections where the client had done nothing to remedy the problems. HUD had, of course, a long list of what should be done.

Now, HUD had a set of standards called the Minimum Property Standards, which sort of set a base line for safe and sanitary housing. And it was pretty basic. HUD also adopted some additional standards, apart from the MPS, that it wanted landlords who received HUD rental contracts to meet.

My client’s position, which neither I now the other lawyer representing him could in good faith maintain, was that the Minimum Property Standards were not only a minimum, but a maximum, and that HUD had no authority to determine, program by program, what standards should be met by recipients of HUD funds in addition to the Minimum Property Standards. To give a bad analogy (because I can’t think of a good one now), if the HUD MPS forbade a walkway 5 feet from a dangerous ledge, my client wanted to maintain that 5.1 feet was acceptable even if the walkway was in wind tunnel that blew you towards the ledge. That’s not a real example, but that’s the kind of thing he wanted to do. Clearly a losing proposition.

And, of course win or lose, these were positions that were ethically wrong to assert.

In addition to these two, I only remember one case where I refused to represent a client based on the condition of his properties. I don’t remember his name. The property was in Cincinnati and, having been embarrassed by the situation in Washington state, I wanted to see the property before embarking on the representation. There was something that I just didn’t trust. I flew to Cincinnati, taxied to the property, saw the condition (and the condition’s problems weren’t major things that needed major financing to remedy), and said “no but thanks for the invite”. The property could have been cleaned up and made more livable with a minimum of effort, but that effort was nowhere to be seen.

That’s really it. Not bad for 40+ years. I actually think it speaks well for the industry. Or at least for my part of it.

This is not that I think all owners of subsidized housing properties are the best. I do remember one sad morning, five or six years ago I would guess, when I woke up and looked at the Post and saw articles affecting three housing developments I had been involved with. In one, a manager had absconded with thousands of dollars, in another the property had been run into the ground and in the third there had been significant drug or criminal activity.

I did not know any of the owners or managers of the properties, each of which had changed hands since I was involved with them. But it shows you what can happen and I will admit reading these articles and thinking that perhaps I had spent 40 years thinking I was doing good when actually I was just treading water.