Video: Pierce County Housing Authority going bankrupt
SEATTLE - During one of the worst housing crises in decades, the KING 5 Investigators have found the Pierce County Housing Authority is about to declare bankruptcy.
The public agency helps thousands of low-income citizens every year find affordable and subsidized housing, but the agency was about to go under because of a pile of lawsuits over mold.
Nicole Anderson says moldy conditions in her low-income housing apartment in Puyallup made her and her children sick six months after moving in.
"My baby's had all kinds of ear infections, colds, respiratory problems and my older son has been sick too," she said.
Anderson decided to sue the Pierce County Housing Authority, which owns the building and offers inexpensive rents to the poor.
More than 100 other tenants at the Eagle's Watch apartment complex have sued the agency as well saying the agency didn't tell them about the mold problem until it was too late.
"They don't tell you when you move in that you'll be living with mold. And you are living in a lot of mold. And if I would have known that I never would have moved in," she said.
All those mold-related lawsuits - $21 million worth recently filed - will break them financially, leaving thousands of people who depend on them - now more than ever - in the lurch. They say to keep affordable apartments like these available, they have no choice but to file for bankruptcy.
"We would not be able to stay open with $21 million worth of lawsuits and litigation," said Charlie Gray, Pierce County Housing Authority.
The housing authority has already shelled out about $750,000 to plaintiffs and their attorneys who sued over mold last year, and they paid their own defense attorneys more than a million dollars along the way - nearly $2 million already - enough to put them over the edge.
"It's heartbreaking to know how much money has been spent on litigation that could have gone back into the affordable housing communities," said Gray.
Staff at the Pierce County Housing Authority will be struggling in the next few days with what to do next. What they know for sure is that with more than 100 outstanding lawsuits and bankruptcy proceedings about to get underway, they'll be paying court costs and legal fees for many months to come.
The Pierce County Housing Authority believes that by filing for bankruptcy they'll be able to continue to provide housing help for more than 8,000 people in need in Pierce County.
It's unclear if bankruptcy will protect them from the lawsuits that have been filed.
