Tenants of Anchorage apartment buildings owned or managed by Red Tail Residential have had long-running complaints about poor maintenance and junk fees the company charged them.
The maintenance issues included mold, heat and hot water going out in the middle of winter and — in one case — a sewage leak under a building that sent fumes into apartments for months.
Some tenants told the Anchorage Daily News they weren't able to get a hold of property managers to fix the problems.
ADN reporter Zachariah Hughes says, in the course of reporting a recently published story, he found a close connection between Red Tail and a private equity company called FPA Multifamily, raising broader questions about private equity ownership of rental properties, including low-income housing.
Listen to the interview at the link above. The following transcript has been lightly edited for length and clarity.
Zachariah Hughes: So a lot of the initial reporting was just things that tenants were complaining about. It was pretty bad oversight of the physical buildings. There were instances where vacant units had pipes burst and they flooded, and people living on other sides of those units were affected. Mold in things, appliances not being replaced, heating systems not working.
I think one of the more dramatic instances was a septic pipe that had rusted out in a crawlspace underneath some buildings in a Spenard apartment complex. And for months, tenants were complaining that their units smelled like latrines, and turned out that this broken septic pipe was just leaking sewage underneath the building for months and months, and they could not get anyone from the company to handle it. And when they finally did, there was asbestos on the pipe, and it was a whole mess.
So what we kept seeing in the buildings that Red Tail was managing was basic maintenance not being handled, and so then larger systems like heating breaking down. A lot of failures to secure the physical sites, and so you'd get trespassers and homeless folks that would come in to warm up, which for tenants was a little bit of a security issue. So things like that.
Casey Grove: It sounds like you talked to quite a few different people for this story, but there's this one guy in particular who's a pretty central figure in it, and his name's Clayton Willis. Can you tell me his story?
ZH: Sure. Clayton lived at an apartment complex called Romig Court, around the edge of Spannard, behind Franz Bakery, and it was a two-bedroom apartment. I think he was paying around a thousand bucks, which you know, by today's standards, is really good for a two-bedroom apartment in Anchorage.
When Red Tail took over, they told him to leave. He had 30 days, and so this was in the kind of late fall, early winter of 2025. And so suddenly, Clayton — who lived with two of his sons, who were both working-age adults, all three of them had jobs — they had to scramble to find a place to live. So Clayton dipped into savings. I think he borrowed a little bit and he bought a camper van from 1994, so about three decades old. And he and his sons were living in this pretty small RV, about the size of a parking space in a lot in Midtown Anchorage. No running water, really spotty kind of heat and heating system and electricity. You know, to use the showers, use the toilet, they had to walk to a squat little cinder block building in the middle of the camping space, and paying about what they were paying for a fixed apartment.
CG: So three adult men living in an RV, plus a Chihuahua and a cat, right?
ZH: Yeah.
CG: Now, what did the experts that you talked to tell you about how this typically works when a private equity company owns, even through an intermediary, owns low income housing?
ZH: You know, it was a challenging story to report for a number of reasons, but one is because this is a relatively new economic model. There's a lot more that's understood about private equity's role in the single-family home space within real estate. A lot less has been studied in the multifamily space.
Basically, what happens is you get large investors, usually institutional investors, they'll put a bunch of capital into a private equity outfit. That private equity outfit will take that big pot of money and buy up real estate assets. And some of them might be really big, glitzy, glamorous buildings with hundreds of units in a city like Chicago or San Francisco, these very marquee real estate markets. And it's like planting a flag and saying, "Our firm has this big, beautiful, sparkling luxury tower."
What also happens is those resources and that capital is used to buy up much more working class, blue collar, low-income housing, and those, too, are run to maximize profits. And so the way this works as a business is, you take somebody else's money, you buy up a bunch of apartment buildings, and you try to make them more profitable.
Some of the ways to do that are to do less maintenance, so you're investing less in the properties, but still getting the same amount of money from your tenants and their rent. You can raise rents so that your income from those properties comes up. One notorious strategy that a lot of different private equity outfits get called out for is junk fees. Just adding tiny little charges that people barely notice, or if they do, they're not going to contest it because it's kind of water off a duck's back. And these were all things that we were seeing in Red Tails properties in town, these same strategies.
CG: To some extent, it was difficult to track this from Red Tail to FPA Multifamily, but you were able to track it back to them. And what did they tell you about any of this?
ZH: Right. When I talked to the president of Red Tail Acquisitions, the company that sits above Red Tail Residential, and bear with me here. He told me in a very, very, very prescribed and narrow way, FPA Multifamily is distinct from Red Tail Residential. It was this very cleanly delineated thing, and I was almost caught off guard because I'd come to the interview with a lot of questions, and I wanted to know about this and this and how does this person fit in? And he just categorically shut it down. And he said, "That's all there is to it. They are they are distinct entities."
We kept doing an interview. I followed up a little bit later on and laid out my evidence. You know, "You guys have the same addresses. There's some overlapping corporate officers. There's a lot of overlapping middle managers between these two firms or affiliate firms." And it was almost verbatim the same response over email of, "There's nothing more to say. These are these are distinct entities."
My interpretation of that is that, in a legal sense, yes, they they are maybe distinct corporate entities. But what I can tell you is that FPA Multifamily and Red Tail Residential share an address in Irvine, California. They have a lot of the same people who are either actively working for both of them or have in the past. And I think readers can make their own decisions or come to their own conclusions about what degree of overlap there is there.
CG: And I guess Red Tail also has a lawyer here locally in Alaska. Somewhere in the middle of this, you were banned from going to any of their properties. Is that right?
ZH: It was almost a sideshow. We had a photographer on-staff who was making some images, making some pictures of some of their buildings, and somebody in a vehicle pulled up and talked to him and said, "What are you doing here?" And he'd introduced himself and said what he was doing. It was all very above board. He was shooting from public streets, all well within the law. And shortly after that, we got a cease and desist letter from an attorney. It didn't seem like he had a very clear idea of what was in the reporting. He was fairly new to representing Red Tail, which I say because in the past I'd emailed a previous attorney for them who had handled a lot of their in-state eviction cases.
And it was a little bit of a threatening letter, and I think we were trespassed or banned from the properties. But it was very incidental to the work that we were actually doing, and I think what was at the heart of the story. And we responded in kind with our attorney and let them know that we weren't doing anything wrong. And this attorney, this local attorney said, "If you would like to report on all of the great work we're doing and all of the local staff that we've hired to really make these facilities the best they can be, we're happy to tell you about it." And we tried to take them up on that offer and learn more, and we did not get a response that was able to make that happen in time.
CG: So one thing I was really curious about because I know you've covered these issues in the past, and this story really wraps a lot of it all together: Has it generated more tips or more stories from other tenants in Anchorage that have similar complaints? I imagine you're getting emails and stuff about this.
ZH: Yeah, we've gotten a response. Some of it is folks specifically mentioning their experience with a Red Tail property. Others have mentioned other places. I think that in the process of talking to some of the folks that work on this issue, it's definitely cracked open some doors into other things.
And I guess the bigger picture for me is that this is a story about what private equity as an industry's entree into the multifamily housing space can really do for a person. We haven't talked about it yet, but the kicker in that story, the very end of it, is that Clayton Willis lost one of his feet. And that's not Red Tail's fault, but he stubbed his toe, he got an infection. It was very hard to take care of it in a camper van with no running water, and a lot of health issues that he had been experiencing for years got much worse when he was suddenly living in a trailer with precarious heating and having to walk to the bathroom in the cold all the time. And eventually, the lower part of his leg had to be amputated. So he he's back at work, he has really not stopped working, even as all this has happened.
But the public and the municipality, in our instance, really ends up taking on some of the burden for caring for people or dealing with the problems when there are landlords who are not doing right by their tenants. People end up on the street. They end up in social services. They end up piled into rooms. They end up in ERs. And I think one of the things that I think about a lot is our housing shortage here in Anchorage is not just a problem because home prices have gone up a lot, and it's harder to get an apartment. It's also an issue because the buildings that do exist are rapidly aging. We have a lot of housing stock getting to the end of its natural life cycle. We're not replacing what's there, and when you have that kind of scarcity, people are desperate for what options are there. They're willing to pay more rent. They're willing to put up with more hardship or lack of maintenance or a lack of protections for their basic rights.
