SOUTH PORTLAND — The new owner of the 500-unit Redbank Village Apartments is raising monthly rents as much as $598, putting tenants at risk of becoming homeless and challenging local and state officials to find ways to keep people housed.

JRK Property Holdings of Los Angeles bought the cluster of 250 duplexes in November for $143 million – more than double the $66 million paid by the previous owner in 2016, according to city tax records. Built in 1942 as a federal public housing project, Redbank Village has been privately owned since 1954 but continues to house low- to moderate-income families.

In recent weeks, Redbank Village Management has sent out lease notices with an “exclusive and AMAZING renewal offer” to increase rents $200 to $600, depending on how soon and whether tenants sign a new year-long lease. The rental hike has tenants feeling vulnerable and frightened in a real estate market where affordable homes are scarce at every income level and rents are rising regionally and nationally.

“Everybody is suffering,” said Marnie Dearborn, who lives in Redbank Village with her boyfriend, son and two grandsons.

Dearborn said she recently renewed the lease on her three-bedroom apartment for one year, agreeing to pay $2,001 per month, which is a $398 increase, not including utilities. If she had waited to renew by April 30,  she said the increase would have been $598.

Among the tenants at risk are 50 renters who receive Section 8 federal housing subsidies through the South Portland Housing Authority. Nicole Bernier, who manages the authority’s federal voucher program, said the new lease terms appear to vary widely from tenant to tenant, but they will be challenging for many residents, including renters who don’t receive subsidies.

“It has made most of the units unaffordable, even with the voucher program,” Bernier said. “And there are 450 other (families) who don’t have the housing authority scrambling to help them. I’m concerned for them, too, because we’re in the business of keeping people housed.”

Dearborn said she doesn’t receive a rental subsidy because she and her boyfriend work full time, but they couldn’t afford to stay in the apartment without financial assistance from her mother. And the prospect of finding another apartment or buying a house in the current market has them feeling frustrated and stuck, especially given how much they now spend on rent.

LEFT WITH FEW OPTIONS

“How do you save money to move forward when you’re paying so much for rent?” Dearborn said. “I think (Redbank’s owners) want to get rid of people they don’t want to deal with, and that’s a lot of families and a lot of immigrants. I’m afraid of what they’re going to do next year.”

The Redbank rent hike also has left few options for Felix Habineza, who is married with three children. He said the rent on their three-bedroom apartment is expected to increase from $1,500 to $1,890, which is a lot for a single-income family. He has looked for less expensive housing in the past, without luck, he said. It’s especially frustrating because he has friends in Michigan whose monthly rent is $1,400, including utilities.

“I want to move from Maine because the rent is so high,” Habineza said. “But I love Maine and I want to stay here.”

A spokeswoman at Redbank’s management office on MacArthur Circle declined to discuss the rent increases, but she agreed to forward a request for comment from JRK. That request, as well as calls to JRK’s office in Los Angeles, went unanswered Wednesday.

Bernier, with the housing authority, said she recently spoke with a JRK official who told her the increases are in line with a recent market study of rentals in downtown Portland. When Bernier told him that Redbank isn’t in downtown Portland – it’s on the west side of South Portland, off Westbrook Street, near several other multifamily and affordable housing complexes and the Long Creek Youth Development Center – the JRK official abruptly ended the phone call, she said.

Bernier said the authority is doing what it can to lessen the impact of the Redbank rent hikes, but they likely will continue to cause big problems for many residents.

For one tenant, their subsidized monthly rent, without utilities, would increase $189, from $2,333 to 2,522, if they renew by Sunday; or it would increase $442 to $2,775 if they renew by Aug. 1, according to a lease notice Bernier shared with the Press Herald. If they choose not to renew their lease and cannot find another home by July 31, their rent would jump to $2,822 per month.

RENTS EXCEED AFFORDABILITY THRESHOLD

Even with a rental voucher, that tenant’s monthly housing costs would increase from $622 to $1,098, including utilities, and push those costs from 30 percent to 53 percent of their monthly income, Bernier said. Housing advocates consider rent and related housing costs affordable when they don’t exceed 30 percent of household income.

“I don’t know how they can legally do this,” said one tenant, who fears she will have to leave Redbank Village and won’t be able to find another apartment in South Portland for her and her two school-age sons. She spoke to the Press Herald on the condition that she remain anonymous because she fears other landlords might view her as a troublemaker and refuse to rent to her.

“Where are my boys and I going to go? We’ve been here for two years. I don’t want them to change schools again,” she said. “This is going to be so damaging for so many families.”

Bernier said many tenants have asked her whether Redbank’s rent hikes are legal. She has referred them to Pine Tree Legal Services, an agency that helps low-income Mainers, and she planned to call the agency herself. Pine Tree Legal didn’t respond to a call from the Press Herald on Wednesday.

Bernier said another factor driving up tenants’ costs is that Redbank Village Management recently announced that renters now must pay their own water and sewage fees charged by the Portland Water District, which can cost $50 to $100 a month or more, depending on usage.

Founded in 1991, JRK Property Holdings is a real estate investment company that owns and operates more than $15 billion of multifamily and hotel assets with more than 80,000 units across 30 states, according to its website.

The company bought Redbank Village last fall in widely reported acquisitions totaling $390 million for five multifamily communities with more than 1,500 apartments in Maine, Florida, Louisiana and Texas. The Maine deal included Liberty Commons, a 132-unit complex farther down Westbrook Street that was built in 2005.

Both Redbank Village and Liberty Commons were owned by Portland Portfolio LLC, which paid $21.5 million for Liberty Commons in 2016 and sold it for $46.6 million in November, according to city tax records.

JRK CHALLENGED IN COURT

JRK has had recent legal troubles with tenants in other states.

In 2020, the company agreed to pay a $350,000 settlement after Washington Attorney General Bob Ferguson filed a lawsuit charging that the company violated the state’s emergency eviction moratorium during the COVID-19 pandemic. The settlement included nearly $300,000 in rent refunds or forgiveness, according to the attorney general.

JRK also is the subject of a class action lawsuit in California, where tenants claim the company raised rents higher than allowed under a state law that aims to prevent price gouging.

South Portland City Manager Scott Morelli said he spoke with a property manager at Redbank Village on Tuesday, concerned that the rent increases might violate a city ordinance requiring a 75-day notice for rent increases.

“They claim the notices they sent comport to our ordinance,” Morelli said.

Morelli said he planned to check with the city’s attorney to review the city’s options related to rent control.

South Portland isn’t alone in experiencing rent hikes foisted upon tenants by new owners.

“This is, unfortunately, a large example of what we’ve been experiencing in smaller doses around the state,” said MaineHousing Director Daniel Brennan. “Out-of-state (investors) buying up housing, jacking up rents and displacing tenants.”

State Rep. Chris Kessler, D-South Portland, said the Redbank rent hikes have motivated him to push for rent stabilization in the city once again, an effort that hit a dead end back in 2016.

“I am outraged,” Kessler said. “The city hasn’t done anything for renters or affordable housing since. It is just inexcusable to allow this type of injustice any longer.”

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