Berkeley homeowner caught in costly code violation spiral

Leonard Powell used to live in this house (left) at 1911 Harmon St. He hopes to regain possession of it sometime soon. Photo: Kate Darby Rauch

Finger-pointing, confusion, worry and mistrust surround 1911 Harmon St. in South Berkeley, a two-story home built in 1910 that stands empty today.

The fate of the recently renovated blue-gray wood-shingle house, including who will own it in the future, lies mainly with the Alameda County court system.

Court officials, however, may say it really lies with the group of people charged with working together to get the house out of the court system and back to being a home.

This includes the home’s owner, Leonard Powell, 77; Gerard Keena, a court-appointed receiver who holds legal responsibility for ensuring 1911 Harmon is building-code compliant and safe for habitation; city officials who are responsible for enforcing building code compliance; and various mortgage brokers, lenders and lawyers.


Community groups, politicians and family members are also deeply involved.

Just last week, Friends of Adeline launched a GoFundMe page to raise money for Powell to help him pay off the receivership costs on his house. Several City Council members, including Ben Bartlett and Cheryl Davila, sent it to their email lists.

Meanwhile, the receiver, Keena, says his primary goal is to get Powell back into his house. But he’s asked the judge to approve the sale of 1911 Harmon if Powell can’t find the money to pay off his debts. Keena pointed out that, each day that passes, Powell’s costs to get access to his house go up due to interest rates and fees.

A bustling family home

Leonard Powell in front of 1911 Harmon St. Photo: Friends of Adeline

The saga of 1911 Harmon, and how it ended up with the courts, goes back several years. There are various versions of the home’s journey to what most agree is a sad, stressful situation today.

But court documents, correspondence and interviews provide enough facts to get a sense of the situation, including what lies ahead. The next month or so will be key to the story, as the court, and pretty much everyone involved, want a quick resolution.

Powell, a veteran and retired U.S Postal worker, bought 1911 Harmon about 45 years ago, making a home for himself, his wife Myrtle Powell, and their six kids; five were hers from a previous marriage. Myrtle died around 20 years ago. Leonard now works part-time as a school crossing guard.

When Powell bought the house it was a legal duplex. One unit was on the ground floor, the second on the top. At some point, he converted the house into one residence for his large family, he said. He didn’t get city permits for this work.

“I was an instant daddy,” Powell said. “Five kids. We found a fixer-upper; it was big and it was cheap. It was home. In those days I thought I was Superman. She (Myrtle) was a package deal.”

Powell was a mail handler technician at the main Oakland Post Office until he retired. He met his wife at Merritt Community College, where she was training to be a lab tech. She had good job offers straight out of college, he said, but opted to stay home to care for the kids. “We had six babies for goodness sake. She needed to be home or close to home.”

A natural storyteller with a sense of humor, Powell clearly loved having a large family and loved sharing it all with his wife. When Myrtle needed a new kidney, her husband didn’t blink to donate one of his.

“It’s a typical Black American story,” Powell said. “She married too young too fast, too many babies. And then I came along. She was 24; I was 28. And she suddenly had number six. My parents thought I was out of my mind.”

Before he knew it, the kids were growing up, there were boyfriends, girlfriends, spouses, grandkids, and lots of people coming and going in the busy household.

Already an older house, 1911 Harmon aged as houses do. Powell said he lived in it just fine, but there were no major updates over the years.

Building code violations

About five years ago — and this is part of the story marked by differences of opinion — someone alerted the city to possible code violations at the house. One story is that Berkeley police notified the city after making a drug raid at the house. Another is that it was relatives renting from Powell.

City inspectors in 2014 found several code violations and asked Powell to address them. The city took the steps required by law: letters to the property owner, notices on the house, deadlines to comply, the consequence of fines or liens.

According to court documents, Powell didn’t correct the violations, over a period of three years. The city petitioned the court to appoint a receiver to bring the house into code compliance. This rare move is made by cities or counties when other means of fixing a property have hit dead ends.

To assist, the city gave Powell a $100,000 loan — the maximum allowed — from Berkeley’s Senior and Disabled Home Rehabilitation Program. These are no-interest loans that don’t need to be paid back until the property is sold or the owner dies, whichever comes first. Keena shared a scope of work for the the loan with Powell’s name on it, though the origin of this is unclear.

Powell says that he did have some work done on the house to avoid receivership. “I got the house painted, walls repaired and replaced sinks installed, an electrician standing by to wire my house on credit, central heating standing by on credit,” Powell said.

But this was, apparently, not enough or not clear to the court. There are different views.

“I was pretty naive about the whole thing,” Powell said about the receivership. He did get an attorney, who turned out to be “an ambulance chaser,” Powell said. He got a new lawyer whom he likes much better.

Receiver takes over

The court approved the receivership in April 2017,  appointing Keena, president of Bay Area Receivership Group. Court findings in granting the city’s petition read, in part:

“The Property is currently maintained in such a condition as to violate the Health & Safety Code and Berkeley Municipal Code, thus creating a nuisance which sustainably endangers the health and safety of the public pursuant to Health & Safety Code Section 17980.6

“Given the severity of the nuisance conditions and amount of work necessary to abate the violations of the Property, an order appointing a receiver is a necessary measure to abate said violations.

“Respondents have been provided with notices to repair and abate the nuisance conditions and have not done so within reasonable time.”

A court-appointed property receiver essentially is given legal authority over all matters relative to the property to bring it into compliance and meet safety and health codes. Receivers are required to update the court with progress reports and accounting. Keena is doing this. City attorneys attend the hearings, but decisions are up to Keena with approval from the court.

This includes securing loans, hiring contractors, managing construction and relocating residents if the house can’t be lived in. Such was the case with Powell and his family, who were relocated first to the YMCA, then to an extended-stay hotel and now to the basement of his son’s house, which he co-owns. Documents say eight family members were living on Harmon Street when the receiver took over.

The costs for all of this, plus interest, legal expenses, building permits and various fees for the receiver, are folded into the amount the property owner must pay to end the receivership and get access to the property.

Keena said he’s waiving his personal fees, which come to more than $100,000, for the Harmon Street project if Powell secures funding to move back in. Keena is charging only for his staff’s time.

Receivers find loans or other funding to cover rehab costs. They also work with property owners to nail down a fiscal pathway for them to get their property back with a plan to maintain it and remain solvent.

If the property owner can’t pay to end the receivership, or if he or she decides to part with the property rather than get it fixed, the court can order the receiver to sell it. Proceeds go to the property owner, minus the expenses.

A receiver can also recommend to the court that selling is the soundest financial option available to the property owner, as Keena has stated if Powell can’t secure enough funding.

Skyrocketing rehab costs, waiting for a loan

Powell has always wanted to move back to Harmon Street, he said. His goal, he says, is to one day give the house to his disabled adult daughter who has kidney failure, and his granddaughter, who is her caregiver.

He recently said that living in one unit and renting the other would work for him and he thought he could afford it with the right financing in place.

The court approved Keena’s rehab plan for the house and he set about getting it done. Before Keena was appointed, initial estimates for fixing the house were about $180,000.

But after Keena brought in engineers and architects, including Habitat for Humanity which was contracted to do much of the construction, the estimate to end the receivership at Harmon Street increased, first to $430,000 then, with more inspections, to $500,000 and finally to $600,000-$675,000. This includes relocation costs and other fees.

This includes restoring the house to its legal configuration as a duplex, which is required by city and state regulations; asbestos and lead paint abatement; foundation, structural and electrical work.

The work was finished last fall, and the house certified by the city for occupancy.

The receiver must do the work to the standards of all loans. The city loan, among many other upgrades and repairs, requires marble counter tops in the bathrooms, and granite in the kitchen, with colors/textures of the owner’s choosing. Federal loans have strict guidelines on handling lead and asbestos for the safety of occupants, workers, and the surrounding community.

In a June 2018 progress report to the court, Keena outlined a possible way forward for Powell to repay the costs.

In addition to the $100,000 loan from the city, he thought Powell might be able to qualify for an additional loan of almost $600,000 based on his retirement income and future rent from one of the Harmon units. Keena suggested the city forgive some of the permit fees.

Powell has been approved for a $600,000 Veterans Administration loan, with two conditions — the completion of an appraisal, which is supposed to happen this week, and the repair of some termite damage found in a recent inspection, said George Tribble, Powell’s loan broker. Tribble didn’t know the nature or extent of the damage.

But to move back into the house, Powell will have to come up with about $67,000 more — the current gap between the VA loan and Keena’s costs.

Powell’s son has agreed to pay for some of the gap, Tribble said, and thus far, the GoFundMe page (which, independently of this reporting, Powell supporters promoted with an ad on Berkeleyside) has raised around $23,000. “We’re trying to close it as quickly as possible. I’ll be more optimistic in a week,” Tribble said, explaining that every day the house is in receivership, Powell’s costs go up with interest and other fees.

Keena says the same thing: “It’s still a moving target; the [gap] number, it increases each day. It all depends on when it closes.”

Community, politicians react

Powell and many family and community members watching the issue are astonished at the ballooning cost of repairs for Harmon. Many are critical of the city for pursuing receivership rather than finding other ways to deal with the code issues. They’re suspicious of the receiver, saying they don’t understand why he pursued so many pricey updates.

Some say the situation reeks of racism, ageism and greed. They point to the decrease in the number of African-American homeowners in Berkeley and the displacement caused by gentrification.

They’ve shown up at Powell’s court hearings, posted on social media and written letters to politicians.

“We decided we wanted to get involved because we were appalled by his story,” said Margy Wilkinson, who is with Friends of Adeline, a South Berkeley community group.

“The outcome we hope for is that Mr. Powell is allowed to move back to his house and that someone, somewhere along the way, takes responsibility for what happens,” said Wilkinson. “It was our understanding that what was supposed to happen to the house was the code violations were supposed to be abated.”

“What I don’t understand is how it got from abating the code violations to a total renovation of the house to which marble counters were installed into two kitchens,” she said.

Keena, the receiver, said he can’t comment with much detail since the case is in the court system. But in a recent letter to Berkeley Mayor Jesse Arreguín, who in January asked the court to return the house to Powell, Keena explained the various reasons project costs jumped, the deeper structural work, asbestos and lead paint removal, and meeting the standards of funders, including the city.

He also said that, for Powell to qualify for federally subsidized financing [the VA loan], the house needs to meet guidelines set by the Federal Home Administration, which go beyond the city’s code requirements.

“However, since Mr. Powell could not qualify for non-government financing, they were required if he was going to have any chance of returning to his home. The Court was notified of these increases in the cost of the project, they were approved,” Keena wrote Arreguín.

Keena points out in the letter to Arreguin that, in the event of a sale, the increased value of the renovated Harmon Street house, and the value of two other Oakland properties Powell owns, including the home he co-owns with his son where he’s staying, he should have “housing security.” According to Tribble, Powell recently transferred the title of one of the Oakland homes.

“We’re spending a lot of time and effort making sure we can land this plane on this really narrow runway,” Keena said by phone last week.

Meanwhile, Powell is “very worried and very distraught,” Tribble said last week.

The next court dates for the case are a conference call progress report with the judge, Jeffrey Brand, on March 8 and a hearing March 11 where the judge will consider whether the house should be sold.

Update: 3/6: We have added links to documents such as the city of Berkeley’s letter to Powell about the code violation in his house, the receiver’s rehabilitation plan, a scope of work from the city and more. After W. Kamau Bell tweeted about Powell’s situation and asked people to contribute to the Go Fund Me campaign, donations have reached $52,444.

Update: 3/6:  We have a few new updates.

Correction: The reference to marble counters comes from a detailed 2015/16  Scope of Work with Powell’s name on it, of an unknown origin.  The document was provided by Keena, who said it was from the city. But Matthai Chakko, city spokesman said Thursday it’s not a city scope of work. It mentions marble counters in the bathroom, and granite in the kitchen.

The city of Berkeley got back to us this afternoon with new developments. It has agreed to subordinate its $100,000 loan to Powell to the VA loan, which means the city loan doesn’t need to be paid back until the VA loan is paid off.  This should make it easier for Powell to get the VA loan, said Matthai Chakko, city spokesperson. 

The city has also agreed to waive about $3,000 worth of discretionary fees charged to Powell. 

“Our goal has always been – and continues to be – to have Mr. Powell live safely in his home,” Chakko said. 

Chakko said that Powell has qualified for a VA loan in the amount of $571,000. His family has agreed to provide an additional $29,000 in funding, for a total amount of $600,000.  

This still leaves a gap of roughly $65,000 to $70,000 between the loans and the cost of closing the receivership. The GoFundMe campaign donations have now exceeded the goal of $70,000, to more than $75,000.