Illegal Rooming Houses Avoided Inspections by Including Utilities

The individuals running a years-long, illegal rooming house operation appear to have been enabled in part by the way the city handles occupancy inspections for rental properties, a system that city officials say they hope to begin the process of reforming. 

This week saw the city of St. Louis drop a bombshell of a lawsuit against Dara Daugherty, Keith Mack, four other people and a whole host of LLCs they control. The city says in the lawsuit that the individuals rented out rooms in south city homes that had been condemned and weren't legally habitable — and that they preyed on the city's most vulnerable, with new tenants being allegedly recruited from homeless shelters and food banks. In some cases, the conditions these tenants lived in were sub-human. 

The lawsuit says that Daugherty and the others involved in the scheme began buying the properties in 2007.

One of the reasons their scheme persisted so long may have to do with the way the city handles occupancy inspections, a system that is more onerous for law-abiding, ethical landlords than it is for those with fewer scruples. 

That's because a city needs to issue an occupancy permit for a unit any time a new tenant moves in. But that inspection is triggered when the utilities change hands — and if the utilities never change hands, an inspector has no reason to check things out unless a landlord or a neighbor proactively summons them.

That's why with so many slumlord operations, utilities are “included" in the rent. The utilities stay in the name of the landlord or their LLC, no matter how many people move in and out of their properties. 

That seems to be the case for Daugherty and her associates.

Chris Day tells the RFT that for six months in 2022 he rented a basement on Hamburg Avenue from Mack. Day says that the space only had one outlet on a wall that would get soaked every time it rained. "He was never supposed to rent that basement," Day says. 

Naturally, the utilities were included in the rent, and Day says Mack tried to keep those costs as low as possible. 

"He put a little box over the thermostat so nobody could get to it," says Day. 

Another tenant living on Louisiana Avenue in Tower Grove East said that he was renting a room in a house along with six other people and that Daugehrty takes care of the utilities. He didn't want to give his name. 

Previously, in response to the RFT’s questions about substandard conditions at a different apartment complex, St. Louis Board of Aldermen President Megan Green says the board planned to soon address multiple issues surrounding housing in the city, including lack of inspections in rental units.

"We know that a number of problematic landlords will include utilities in rent. It's the changeover in utilities that triggers the city to do an occupancy inspection," Green told the RFT in September. "We're working on closing that loophole and requiring inspections so landlords can't get around that."

About the recent revelations of the Daugherty slum empire operating out of dozens of condemned homes, Green said, "This situation is tragic in that vulnerable people were exploited by a predatory landlord and now face homelessness. It underscores the need for the rental registry program which would accurately track property ownership and give the City a way to bring landlords like Daugherty into compliance."

That rental registry program would be established by a bill introduced in December by Ward 7 Alderwoman Alisha Sonnier, which would require rental units to register with the city. 

However, even if Sonnier's bill became law, the city would still rely on the change in utilities to trigger an inspection

Yusuf Daneshyar, a spokesman for Green's office, says that although that is the case, a rental registry program would be a big step in enabling the city to understand which landlords are in compliance with the law and which aren't. That data could be used to make the case for more building inspectors in the city’s Building Division. That division appears to have approximately 18 vacant inspector positions, according to data made available to the Board of Aldermen last month. 

"There has been interest in creating a regular occupancy inspection process, say every three years, but implementing that policy isn't feasible given the Building Division's current capacity," Daneshyar said. 

Any change would be a long time coming. 

Brendan Lambert tells the RFT that he rented from the Daughertys in Tower Grove East a decade ago, from 2013 to 2014, settling on a room of hers in a Louisiana Avenue house after declining a spot in a larger building that was without a roof. 

"I was like, 'You ain't got no roof on that bitch. That's a tarp,'" he recalls telling her. 

Of the utilities situation in the room he did end up renting, Lambert says, "They were adamant no one ever contact the utility companies. No internet. No cable. No one."

Related

Neighbors of Illegal St. Louis Rooming House Saw Years of Suffering: Dara Daugherty’s operation was well known to its Tower Grove East neighbors — and so were its victims

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Illegal Rooming House Operation Preyed on Hundreds of Desperate St. Louisans: St. Louis City says Dara Daugherty and 5 others rented out 39 condemned homes to "vulnerable and indigent" people