Justin Santora

Krystal Horton arrived at the downtown court building that Thursday morning in June with her two kids in tow and only minutes to spare before her 9:30 eviction hearing. She found a long line at security, struggled to get her baby daughter's stroller through the X-ray, and lost more time scrambling to the Daley Center's childcare room on the 13th floor, only to learn that the staff can't admit a kid under two. By the time she made it to the courtroom she figures she was at least 15 minutes late for the hearing.

A trial had been held without her. She'd been evicted and would have to vacate her apartment immediately or be prepared for sheriff's deputies to show up any day. A judgment was entered against her, which marked in her credit history that she owed her landlord $2,241.

This was in 2016. Horton, then 34, had been living with her kids, 1 and 11, in a four-story brick courtyard building in East Chatham for a year and a half. The property had been foreclosed and boarded up and was on the city's troubled building list until a local real estate company bought and rehabbed it four years before she moved in.

Horton had been working as a full-time certified nursing assistant with a hospice company—work she got into after caring for her father as he died from ALS. She'd had a lot of challenges in her 20s—marrying right out of high school and getting divorced; suffering a life-threatening bite to the face from her beloved dog, which resulted in reconstructive surgery; dropping out of college after getting pregnant; fighting one ex for years to receive child support for their son; and more fights with another ex over child support for her baby daughter. Still, she has an optimistic and resilient disposition, and the two-bedroom apartment in Chatham represented "independence. That I could do it as a single parent, even with all the struggles I had going on, that I could provide for my family, put a roof over our heads. It gave me sunlight to a brighter future."

The exterior of the building was "immaculate," she remembered. Landscaping that included neat flower beds and crenellation around the roof gave it the air of a castle. Horton was mostly satisfied with her unit: it was roomy, with hardwood floors and good light through its third-floor windows. But there were issues. The toilet clogged easily, and after heavy rain she'd see cracks and mold on the walls. This worried her because of her son's asthma, but she said it would take several calls to get the landlord to send a repairman, and he wouldn't do much beyond spray paint over the mold anyway. Her biggest concern, though, was that the gates of the property were frequently broken; since she had a tumultuous relationship with her daughter's father she didn't want him to have easy access to her front door.

Around the time her daughter was born in 2015, Horton was laid off. For several months after she freelanced, driving around the Chicago area to care for dying people in their homes. In April 2016, after her car required more than $2,000 in repairs for a broken transmission, she couldn't cover the $717 monthly rent.

She thought she had an understanding with her property manager—she said he'd agreed to let her pay what she could at the beginning of May and take some time to catch up on what she owed. But a new guy who replaced him wouldn't accept partial payments. The eviction case against Horton was filed on May 20.

click to enlarge Krystal Horton was evicted from a Pangea property in East Chatham in 2016.

Travis Roozée

Nearly a month later, a private detective showed up at her door with a summons addressed to someone else living at a building owned by the same landlord a mile away. Horton said that when she pointed out the error, the detective told her to go to court anyway. It didn't feel right to her. "If my name is on the lease then anything pertaining to the lease is gonna have my name on it." (Indeed, per state law, serving someone with a summons that isn't addressed to them or to anyone over the age of 13 at the same address doesn't constitute service.) The summons included an ominous warning in legalese: "If you do not file an appearance and contest the claim a judgment by default may be entered for the relief requested in the complaint, ordering that you be evicted."

Horton was determined to fight her case; she said she wanted to stay in her unit and believed she'd be able to scrape together the back rent soon. She didn't realize that being late to her June hearing would mean that her eviction would be set in stone. In the courtroom that day, a uniformed bailiff suggested she file a motion to ask the judge to reconsider. Horton did just that. She wrote the motion in neat cursive, requesting "the opportunity to make payment arrangements and continue residing in the unit. I was served the wrong paperwork and would like the chance to represent myself in court."

Horton had the right idea: because she wasn't properly served with a correct summons the eviction judgment could be thrown out and her landlord would have to restart the case from scratch. In fact, tenants can always ask judges to reconsider eviction orders; within the first month any judge can hear their motions, but afterward a tenant has to go back to the same judge that ordered the eviction.

Her chances looked good. After she filed her motion she got a July 29 hearing date. But once again, she was late. The judge struck her motion—which isn't the same as a denial. A strike is an erasure of the request rather than a decision that it has no merit. Horton would have to file another motion, and later that day she did.

Her second motion was struck in early August, "for lack of jurisdiction." Horton was in court on time but because a month had passed since the eviction was entered, the assigned judge sent the case back to the first judge who had evicted her. She filed a third motion, which was struck again, this time without explanation.

By then, it was late August. Her hopes of being able to stay in the East Chatham apartment had dwindled. She started packing her belongings, although she said she was under the impression that the sheriff couldn't put her out while she had motions pending. Things became increasingly chaotic in her personal life around then too. Her daughter's father punched her son and was arrested (he later pleaded guilty). She was going to court to deal with that case as she was fighting the eviction.

The fourth and final motion she filed was terse and no longer attempted to challenge the summons. "I am requesting time to pay owed rent and stay in the above unit," she wrote. She was granted a court date of September 2. The morning after she submitted the motion, August 24, the sheriff's deputies came to evict at 11:30. Horton was at work, she said, but arrived later that day to a neon-green "no trespassing" sticker on her front door. The locks had been changed. She called the property manager.

"I said 'Hey, what's going on? I have legal documents, I have a court date,'" she recalled. She said he gave her a two-hour window the next day to clear out—a day she remembered as a blurred rush to salvage her possessions. "I went into a cougar moment," she described, trying to pack what was most important and deal with the expensive movers she was forced to hire at the last minute to take her furniture to a storage unit. "I had a full furnished living room, two furnished bedrooms, I had toys, I had a crib—that's a lot to get out in two hours."

She remembered scrambling, leaving mattresses and other furniture in the building's hallways, thinking she could retrieve them the next day.

"I was able to get a good half of my things out but I lost lots of my clothes, my ironing board, a lot of my son's toys, furniture, a high chair, my TV. I had a whole fridge full of food, pots and pans, silverware." She inventoried these things with a speed that belied the anguish of the losses. "Two big containers of Legos my son had saved up for eight years. I had two totes full of scrubs. . . ." She figured she left at least $5,000 worth of stuff behind.

Horton wanted to come back to collect more of her things the next day, but had no luck reaching the property manager. One year later, she still couldn't believe that all of this was over a couple months of back rent. She had figured a large company would be more lenient, give her at least three, maybe even six months to catch up on rent before taking her to court. "On my block alone they had my building, the building across the street, on the corner, on the next corner. They had a block radius of apartments on the block in Chatham where I lived," she said. "Being put out of the property after two months [of not paying rent] was very discouraging." It didn't make sense to her that they wouldn't want to take her money by the time she'd gotten it together in August. But she also understood the landlord's perspective. "You gotta cover expenses for the building, you gotta pay for property managers, for the cleanup—all that is costs," she said. "But when you have someone who fell on hard times and they want to pay and they have the money to pay, I think that's something they should have considered."

It's difficult to overstate the degree of historical disinterest in the eviction of renters in Chicago, a city where issues of race and poverty have been meticulously scrutinized by academics, the media, and the government for decades. While public housing and its troubles were the stuff of books, studies, TV specials, film, and endless news coverage, rental housing in poor neighborhoods went largely unexamined—particularly the financial and social dynamics between landlords and tenants. The last research study of Chicago's eviction court was published in 2003 and until now little has been known about the outcomes of the approximately 20,000 cases filed there every year. (County court data isn't subject to the Freedom of Information Act and is released at the discretion of the chief judge; requests can take months to process.) Evictions have mostly sparked public debate when they've touched homeowners, particularly during the Contract Buyers' League battle against predatory home sellers beginning in the late 1960s and during the recent mortgage foreclosure crisis.

This inattention to eviction is not unique to Chicago. For much of America's urban history, eviction has been a phenomenon in the shadows of personal embarrassment about poverty, racist and classist stereotypes about who is being evicted, and political ideologies that place renters' welfare second to landlords' property rights. It wasn't until 2016, when sociologist Matthew Desmond published his book Evicted—a landmark study of the effects of eviction on tenants, landlords, and neighborhoods—that the problem entered into popular consciousness as a massive social issue worth caring about. Desmond found that eviction affects Black women at about the same rate as incarceration affects Black men and that it can plunge low-income households facing an unexpected financial emergency into an unstoppable cycle of poverty.

Last year, Desmond launched the Eviction Lab at Princeton University and created the first national database of court-ordered evictions. But examining court data offers only a narrow glimpse of the scale of the eviction crisis and doesn't account for "off-the-books" tenant displacements due to gentrification or landlord neglect. (In Milwaukee, Desmond found, only about a quarter of evictions were the result of a formal court process.)

The Eviction Lab's data indicates that national eviction case filings have been on the decline since 2012, in tandem with the economic recovery. (This is true for Chicago, too, a Reader analysis of court records showed.) Even so, in 2016 alone, almost a million of the nation's 43.3 million renter households were evicted—that's about how many homeowners were foreclosed on at the height of the recession.

"If that amount holds up, and we're seeing that amount of eviction every year, that's like seeing the foreclosure crisis every year," said Lavar Edmonds, a research specialist at the Lab. "For those who, I don't know . . . have a soul, that should be alarming."

click to enlarge Illustrations by Anna Jo Beck

Most evictions are prompted by unpaid rent—rent that's becoming unaffordable to a growing segment of the population. Yet research on how landlords may be driving the affordability crisis is scarce and conversations about profiteering are politically unpopular. In January, Desmond and MIT's Nathan Wilmers published a paper in the American Journal of Sociology attempting to answer a simple question: "Do the Poor Pay More for Housing?" They found that nationwide, and in Milwaukee in particular, tenants in poor neighborhoods are systematically overcharged for rent relative to the value of their landlords' properties and that landlords in poor neighborhoods make more profit than those in middle-income and wealthy neighborhoods. But much more research remains to be done on these dynamics in Chicago, where the study of evictions is still in its infancy. While the narrative that emerged from the foreclosure crisis was about irresponsible banks greedily colluding against hapless families striving to fulfill the American Dream, eviction is still typically seen as a deadbeat's problem.

To combat this stereotype, eviction researchers have focused on the wider impact of individual tenants' displacement. "As you see higher rates of eviction you risk tampering with the social cohesion in a neighborhood," Edmonds said. Studies are now finding that crime rates, employment, mental health, and other markers of neighborhood well-being are affected as tenants churn through buildings and their children churn through schools.

Indeed, the areas of Chicago where the most evictions occur—Black neighborhoods on the south and west sides—also have the highest rates of joblessness and violent crime. These neighborhoods bore the brunt of the city's school and mental health clinic closures. These are neighborhoods that have the most city ticket debt and the most bankruptcy filings, where homeowners and small businesses are burdened with unfairly high property tax assessments, and where Chicago police officers conduct the most stops and are most accused of misconduct. These are the neighborhoods where one company saw a golden business opportunity.

Pangea, the company that owns Horton's old building and 35 others in a half-square-mile area of East Chatham, started buying buildings in economically beleaguered south and west side neighborhoods in 2009, the year they began operating out of a squat glass office building in River North.

The company's history is often told as a tale of benevolent intervention. Amid a disastrous recession, Pangea offered hope for a return of investment in Black neighborhoods hit hardest by foreclosures and the folding of community banks that had once financed an ecosystem of mom-and-pop landlords. The company fixed up dilapidated apartment buildings by the block, restoring the architectural character of historic neighborhoods. Often, it bought properties from the city's troubled building list and successfully restored them to safe habitability, city records and officials confirm.

Led by a team of young, mostly white men with backgrounds in finance and tech, Pangea—known variably as Pangea Real Estate, Pangea Ventures, Pangea Properties, and Pangea Equity Partners—presented itself as a modern real estate player that stuck to old-school business principles. The company would buy, rehab, and directly operate apartment buildings without involving middle-men property managers. They also used "data and analytics" to screen tenants and triage maintenance.

Al Goldstein, the company's founder and now board chair, describes Pangea simply: "We're good guys" catalyzing economic revival in south and west side neighborhoods and providing affordable housing to the working class. During an interview with the Reader last summer, he said that the company's mission from the beginning was to build a big, sustainable business on the foundation of high-quality customer service. "Buy these buildings, reinvest in them, make them nice, re-tenant them, and prove to all of the third-party constituents that this can actually work," he said. By "this," he means a successful, tech-savvy, non-slum-lordy real estate business reliant on low-income renters.

click to enlarge Pangea’s apartment empire consists mostly of buildings with more than six units. Nearly three-quarters of their holdings are in South Shore, Chatham, Auburn Gresham, Woodlawn, and Austin.

Travis Roozée

Goldstein is 38 years old, but he looks younger. He's got muscular arms, gelled hair, slightly sad eyes, and a persistent five o'clock shadow. He dresses casually and though he appears to like talking he always seems slightly shy in the spotlight, whole words nearly disappearing from his quick-clipped speech. But despite this modest manner he's got a killer instinct and a track record of building successful businesses. Though he once joked that Pangea was named after the ancient supercontinent to reflect the company's "world dominance aspirations," he's since generally adopted a more sophisticated manner in describing the company's goals. He says it was never Pangea's intention to flip these buildings or to sit on them and let them deteriorate in anticipation of higher property values. "We have a long-term view: we're going to own forever."

Goldstein and his cofounders pitched Pangea to investors with this narrative: Chicago's low-income neighborhoods were "in a tough situation because the financial crisis hit them really hard," and would-be investors had the power to help. Goldstein said it wasn't a hard sell. He closed deals with visual aids. "You look at the before photo, you look at the after photo, and look at the people that actually move into the buildings. They're really happy."

Pangea grew quickly. In 2009 the company began with a handful of employees and acquired nearly 1,200 apartments in Chicago. The next year its portfolio doubled. By the end of 2012 the company owned more than 4,000 units in Chicago and more in the south and west suburbs. It had also expanded into Baltimore and Indianapolis, and raised about $180 million from investors including Wall Streeters, west coast venture capitalists, and legendary local financiers like Norman Bobins and Jim Reynolds, both of whom sit on Pangea's board of directors.

Goldstein made Crain's 40 under 40 at 32. By the time he took a step back from running Pangea to launch a new company in 2013, an efficient system for acquisition, rehab, and tenant relations was in place. Pangea would spend between $15,000 and $20,000 to purchase each unit, Goldstein explained in interviews with Chicago magazine and on tastytrade.com's finance talk show "Bootstrapping in America." Then they'd spend about the same amount to rehab, as the company revived historic masonry and hardwood floors, fixed plumbing and HVAC, and installed new kitchen cabinetry and appliances. The investments paid off.

Forbes reported that Pangea's revenue had grown by an impressive 13,323 percent since its founding—from $500,000 in 2009 to $60 million at the end of 2013. That year, Pangea also broke onto Inc.'s list of the 50 fastest-growing companies in the country, and became by far the fastest growing company in Chicago. Soon it would launch a separate property management business to provide services to other apartment building owners and a financial services spin-off company, Pangea Mortgage Capital, to provide loans to real estate investors across the country. Pangea now owns and operates 13,000 apartments across all of its markets and its revenue is estimated at more than $113 million.

Goldstein and current CEO Pete Martay said Pangea has invested $400 million in private capital into Chicago's distressed real estate and created 350 full-time jobs in the city. The company's leaders are particularly proud of its investment in Horton's old neighborhood, where they said they have infused more than $20 million and brought 716 apartments back to market after the foreclosure crisis.

This investment has been generously rewarded by the press and Pangea's peers. Between 2013 and 2016 Pangea got multiple "Upstanding Rehab & Redevelopment" awards from the Chicago Association of Realtors. Forbes judged it to be one of America's "most promising companies," Crain's recognized it as a top job creator, the Tribune recognized it as a "top place to work," and recruiting firm Brill Street ranked it as one of Chicago's top 50 employers "for emerging Gen Y talent."

And the company has been giving back too, as Goldstein and Martay told the Reader in interviews and e-mail exchanges. Pangea launched a charitable foundation, Pangea Cares, donating more than $1 million for neighborhood beautification, school backpack giveaways, food drives, and internship programs. Goldstein claimed the foundation also invested $250,000 into the creation of the Chicago Police Department's Strategic Decision Support Centers—a collaboration with the University of Chicago that uses technology for more targeted policing in the neighborhoods where Pangea has many properties. (CPD and U. of C. would not confirm this.) The company has also donated more than $46,000 to local politicians since 2009, including $18,100 to Eighth Ward alderman Michelle Harris and her political organization and $11,000 to Rahm Emanuel. Pangea even collaborated with The Steve Harvey Show to offer a furnished apartment rent-free for a year to a family that was homeless after an eviction.

"We have a deep-rooted interest in the neighborhoods we serve and have done it the right way," Martay told the Reader in an e-mail.

But while the press and start-up watchers swooned over Pangea's prodigious growth and its apparent participation in a renaissance of struggling neighborhoods, something else was going on too. In a matter of three years, Pangea had become not only one of the largest real estate companies in Chicago; it had also become the city's most prolific filer of eviction cases.

A Reader analysis of Cook County eviction court data from 2007 through 2018—which includes 250,000 cases filed against Chicago tenants—shows that since its founding Pangea has taken as many people to court as the next four landlords combined. The company owns and operates 7,500 units in Chicago. In 2018 it filed 1,137 eviction cases. The second most prolific evictor last year, with 247 cases, was East Lake Management, a property management company with 6,000 units in neighborhoods similar to Pangea's. (Full disclosure: In October 2018 the Reader was purchased by a new investment group headed by Elzie Higginbottom, the founder of East Lake, and two of East Lake's executives are involved with the company's board. This investigation predates these relationships.)

click to enlarge Sue Kwong

Goldstein told the Reader that Pangea's evictions are a "nonstory" and that it isn't fair to compare Pangea, an owner-operator, with the other top filers because companies like East Lake, Habitat, or Kass mostly function as third-party property managers. He also claimed that none of these companies operate in the same neighborhoods at a scale comparable to Pangea's.

Nearly three-quarters of Pangea's holdings are concentrated in South Shore, Chatham, Auburn Gresham, Woodlawn, and Austin, and the company is now responsible for as much as a fifth of all eviction cases in those neighborhoods.

Over the last year and a half, the Reader has interviewed three dozen current and former Pangea tenants and nearly a dozen current and former employees. We observed hearings for more than 100 eviction cases filed by Pangea and examined records from more than 100 lawsuits filed against the company. We spoke with attorneys and advocates for landlords and tenants, with local and national experts researching housing issues, with city officials, and with Pangea's neighbors and competitors.

Two conflicting images of the company emerged from these records, observations, and interviews. On the one hand, Pangea is reviving apartment buildings in neighborhoods reeling from the recession. This is the image the company promotes, and a positive impact on the neighborhoods is discernible. On the other hand, Pangea appears to be subverting its own stated mission of neighborhood stabilization by taking a tremendous number of tenants to court, undermining their housing security both immediately and for years into the future.

To date, the company has filed more than 9,000 cases against tenants across the city. Pangea's own data, which the company shared with the Reader (and which shows annual eviction case filing numbers on average 8 percent lower than those reported by the Circuit Court), indicates that it's taken on average nearly 17 percent of its tenants to eviction court every year between 2013 and 2017. That's one case filed for every six units. According to Cook County court records, 60 to 70 percent of Pangea's tenants who are filed on are ultimately evicted. Eviction case filings—even those that don't ultimately result in evictions—tend to haunt renters for years, limiting their options for safe, affordable housing.

click to enlarge Sue Kwong

When asked about Pangea's eviction filing rates and other problems reported about the company, Goldstein and Martay repeatedly said there are criminal bad actors taking advantage of tenants in the neighborhoods where they operate. They cited the nonprofit Better Housing Foundation and EquityBuild, both of which were mired in scandal last summer—the former for keeping a large number of properties in disrepair while board members enriched themselves, the latter for being an alleged real estate Ponzi scheme. In an e-mail Martay expressed concern that these companies' collapses "will put a significant strain on the areas they serve and the city building department. . . . Between these two groups they amassed a portfolio of over 2,500 units in Chicago." He said he worried that these neglected units would fall into chronic disrepair, hurting tenants and neighbors alike. (In March, Crain's reported that Pangea was moving to buy a 44-unit building in South Shore formerly owned by EquityBuild.)

Though much is now known about EquityBuild's and Better Housing Foundation's operations due to pending litigation, the inner workings of Pangea's business are opaque. As a privately held real estate investment trust, it isn't legally obligated to report expenses or revenue, much less profits. Pangea's investors—other than ex-Governor Bruce Rauner, who was forced to make financial disclosures while in office—remain largely in the shadows. Even the exact contours of Pangea's empire are hard to confirm. Each building is owned by one of Pangea's hundreds of shell LLCs, usually bearing vaguely geological, geographic, or elemental names such as "Rodinia," "Eurasia," or "Seaborgium" or alphanumeric titles such as "PP P7 3." Assigning each building's ownership to a different legal entity is common in the real estate business, to protect the owner's other assets from being seized in case of litigation at one property. The company often transfers buildings between these shell LLCs too. Indeed, some of the lawsuits filed against the company over the years, claiming everything from slippery hallway floors to apartment ceilings caving in, were dismissed because they weren't filed against the correct Pangea LLC.

Some observers are concerned about the outsized presence of the company in low-income neighborhoods. In South Shore, for example, Pangea owns approximately 8 percent of the apartment buildings with five or more units, according to data analyzed by Geoff Smith, the director of the DePaul Institute for Housing Studies. That's "a pretty substantial market share for one private owner," Smith said. South Shore is part of a swath of Black neighborhoods close to the lakefront where the Institute has found Cook County's most severe gap between the supply and demand for affordable housing.

Building ownership consolidating disproportionately in one company's hands may leave these neighborhoods more vulnerable to future real estate market crises. Even fellow landlords who generally see Pangea as a positive presence said that the health of the real estate business in the neighborhoods where they operate now rests heavily on Pangea's success. "The only issue with Pangea is if they ever fold, if they ever don't make it, it's gonna be chaos," said Duane Ehresman, a longtime landlord on the west side who owns and operates about 600 units, mostly in Austin. "They're just so huge." (As it happens, Ehresman files one case for every eight units—a rate much closer to Pangea's than the large property managers'.)

click to enlarge Sue Kwong

In recent years, Pangea is increasingly concerning tenant advocacy groups too—not so much for evictions, since filing statistics aren't reported publicly by the courts, but for the living conditions in its buildings. The Metropolitan Tenants Organization—a nonprofit that educates and organizes renters and runs an advice hotline—now receives more calls about Pangea than any other landlord. While the complaints about mold, rodents, bedbugs, and disrepair are the same as for many other landlords in the low-income apartment market, the organization said no company has as many tenants complain about unexpected fees—for routine maintenance requests and heat repair, and, most notably, for water. David Wilson of MTO said he's gotten a rash of calls from Pangea tenants reporting that the company billed them for water weeks or months after "the manager told them 'Don't worry about [a water bill], that's just on the lease but you don't have to pay.'" These charges, which Pangea calculates based on a building's entire water bill divided by the square footage of each unit (rather than a tenant's individual usage) can add up to an extra $30 or $40 every month.

Frank Avellone, an attorney and policy coordinator at the Lawyers' Committee for Better Housing, said improving housing quality and reviving real estate in low-income neighborhoods isn't an excuse for nickel-and-diming cash-strapped tenants. "There are some companies that buy dilapidated properties and put them into decent condition and rent them at affordable rates—we know lots of companies that do that, in fact that's laudable," he said. "I don't see why it has to carry with it these more oppressive ways of conducting business," he continued, describing Pangea. "It sort of feels like a payday lender."

Funny he should say that.

In the summer of 2015, Goldstein sat stiffly in an armchair during a taping of the "Chicago Founders' Stories" talk show and explained to the host what prompted him to found Pangea at the tender age of 28.

Following the financial crisis, apartment buildings with fewer than 100 units were "sub-scale" for big-time investors who still had some capital to throw around, he said. "Institutional investors can't invest in those—but they make up 80 percent of the unit stock. . . . We figured out then we could actually build something really interesting if we used the technology and analytics and operational capability we had used at Enova." Enova was the reason Goldstein found himself awash in cash right when, in his words, "the world kind of exploded."

Goldstein, who emigrated with his family from the Soviet Union when he was eight, began his career at Deutsche Bank in New York City. But he found investment banking overwhelming and "not necessarily super meaningful," as he put it during an interview with the Reader last summer. He read "a lot of Rich Dad, Poor Dad books" and contemplated going into real estate. His longtime mentor, options trader David Shorr, even agreed to be his first investor. They got a deal on a seven-unit building in Rogers Park. But it was 2003, and when they gamed out what kind of money they could make renting, the math "wasn't super compelling." Shorr soon pitched him on a more lucrative idea: payday lending.

"I'd never even heard of what a payday loan or subprime loan was, or what a check-cashing store actually did," Goldstein told me. But Shorr convinced him to quit Wall Street. "He had this great line which I actually use to this day: 'I want to put you in a position to benefit from your own hard work.'"

The two opened their first store, The Check Giant, in January 2004 in the center of the second-poorest census tract in Kenosha, Wisconsin—where, just across the Illinois state line, state regulations didn't cap interest rates. They made high-interest, small-dollar, short-term loans to people who didn't have other options for cash in a pinch.

The early 2000s were boom times for payday lenders; Goldstein and Shorr's store became profitable within three months. They launched a second location in Racine and let customers apply online through CashNetUSA, which supplanted the brick-and-mortar operation within a year. Goldstein doesn't have much patience for the idea that payday lending is exploitative, and said critics tend to talk about it "very ideologically and academically and they never think about, OK what if I was in that situation?" The typical industry defense has always been that a high-interest loan is better than no loan—or, you know, better than going to a loan shark.

During Goldstein's tenure at the company, CashNetUSA garnered a reputation for not being the worst of online payday lenders. A few lawsuits claiming unfair debt collection practices and interest rates as high as 1,100 percent never went anywhere, and Goldstein described the company as "the best subprime lender that there was."

Still, Goldstein said everything he's done since "is much more interesting and much bigger." He avoided calling his first businesses by their names, instead referring to his time in payday lending as "the Enova days." (By mid-2006 CashNetUSA had grown into a company licensed to lend in 27 states. Cash America, a publicly traded pawn shop chain, bought it for $265 million. Forbes once reported that Goldstein pocketed $70 million from the sale, but he declined to confirm that. Cash America eventually spun off CashNetUSA into a new company, Enova International, which operates nearly a dozen online subprime lending businesses across four continents and has reported record profits in recent years.) Indeed the "Enova days" don't even get a nod on Goldstein's LinkedIn page.

After five years in payday lending, Goldstein (and his best friend Steve Joung, who'd also worked at Enova) founded Pangea, and his reputation for generating good returns for investors helped boost their personal start-up capital. As Goldstein explained it, he and his partners "just went back to the same people [who invested in The Check Giant and CashNetUSA], said, 'Hey, we just made you guys a lot of money, we're personally investing significantly into this new venture. We don't know much about real estate but we knew even less about digital lending. So we're moving up in the world.'"

In early 2013 Goldstein pivoted back to consumer finance and founded Avant, a company specializing in short-term loans with 10 to 36 percent interest rates for the "just below prime" consumer. "It was just a good time for me to step back [from Pangea] and do something new because the business was at a great place," Goldstein told me. "I just love building companies."

Some Pangea investors—most notably venture capitalist Dave Marquardt, an early investor in Microsoft—were pleased enough with the real estate business's performance that they were ready to put big institutional funds behind Goldstein's next idea. By 2015 Avant was valued at $2 billion. Though its lending model is generally seen as a step above the predatory approach of payday lenders, this year the Federal Trade Commission filed a suit alleging Avant had overcharged and misled hundreds of borrowers and made unauthorized withdrawals from their bank accounts. In April Avant settled for $3.85 million.

Avant's headquarters at Wacker and LaSalle is only six blocks from the building where Pangea started, but it feels worlds apart from the end-of-the-hallway office above an Infiniti dealership where, until last year, Pangea's executives presided over their real estate empire. (Pangea recently relocated to a loft in the West Loop.) Goldstein has moved on up from a cozy suite with beanbag chairs, board games, and accent walls painted in Pangea's signature lime green to Avant's cavernous, two-story tech office mecca with a gourmet kitchen, arcade games, and a 17th-floor terrace. Visitors are required to sign nondisclosure agreements at the front desk. Fully conforming to the stereotype of an understated tech entrepreneur, Goldstein wore a green T-shirt, jeans, and scuffed-up white canvas shoes when we met in one of Avant's dozens of small, glass-walled conference rooms. He came alone and only brought some water in a well-worn plastic cup with his initials scrawled on it in black marker.

He seemed both cagey and eager to convince me that Pangea—for which he still feels comfortable speaking despite the fact that he's retreated from management to board chairmanship—hasn't done anything wrong. He brought up my "extremely unfair" 2017 article on the scope of the eviction problem in South Shore, in which I had named Pangea as the top filer of cases and for which I'd made numerous attempts to contact the company for comment. Pangea never responded. "I think they felt the agenda was to write a negative article so it was better not to talk to you."

Though he didn't dispute the eviction filing numbers I presented, he argued that they were symptomatic of a phase of intense building acquisition in the company's early years and not part of the regular operating procedures at Pangea—something directly contradicted by Cook County court data, but we'll get back to that a bit later.

The parallels between Pangea and payday lending are hard to ignore upon closer examination of what happens when the company takes its tenants to eviction court. To get a loan from a payday lender, customers typically have to sign lengthy, dense contracts that include mandatory arbitration clauses—this means they're giving up their right to sue the lender individually or as part of a class action over things like unfair debt collection practices, hidden fees, or usurious interest rates. (In a 2015 Securities and Exchange Commission filing, Enova International acknowledged that attempted federal regulations of mandatory arbitration "could render the arbitration agreements we use illegal or unenforceable," and that limits to their ability to require customers to sign away their rights to sue could spell steep legal expenses and have an "adverse effect" on profits.)

While Pangea has been sued dozens of times by tenants claiming unsafe living conditions or negligent management, those lawsuits—the vast majority of which have been dismissed—are not the main arena in which the company flexes its legal muscle. Instead, that happens in eviction court, where Pangea is notorious for "pay-and-stay" deals, in which tenants sign away their right to a trial—and with it, the ability to argue for withholding rent because of Pangea's inadequate building management.

click to enlarge Eyevie McHenry was evicted from a Pangea building in Austin in 2018.

Travis Roozée

The building in Austin where Eyevie McHenry lived had a lot of problems. Department of Buildings records indicate tenants complained about leaky ceilings, mice, roaches, and bedbugs once Pangea took over in 2015. When the Reader visited her in early March last year, McHenry, 30, was heating her one-bedroom apartment with the stove because the radiator wasn't working and her maintenance calls had gone unanswered. She'd lived there for nearly a year with her fiancé and their small scruffy dog, but they hadn't bothered to get much furniture for fear of the mice eating through it. Squeals from inside the walls periodically interrupted our interview.

Despite these conditions—and despite the fact that they regularly heard gunshots outside—the rent was $850. Not long after they moved in, in May 2017, her fiancé lost his job. Unable to pay rent in one lump sum, they'd bring the company a few hundred dollars at a time—though they knew they accrued nearly $30 in late fees every month they didn't pay in full. For three months Pangea took the partial payments. McHenry showed the Reader the receipts they got from the company and said they were never told making partial payments put them at risk of eviction.

By her calculation she only owed Pangea $100 at the beginning of September. But when she went to the office the property manager couldn't accept payment—the company had filed for eviction. In court Pangea's lawyers offered a pay-and-stay deal: she could stay in the apartment in exchange for sticking to a payment plan for her arrears and the ongoing monthly rent; if she didn't make her payments she agreed to an eviction judgment without a trial. Court records filed by Pangea indicate that on November 16 McHenry made a $1,000 down payment toward her nearly $3,000 debt (which included $400 in court costs Pangea passes on to tenants when making such deals). Going forward, she agreed to pay $930 for rent on the first of the month and $323 toward her debt on the 15th of every month.

The deal seemed unfair—especially since her rent had been $80 lower until then—but McHenry didn't have a lawyer and said she didn't know she could negotiate.

Over the next three months she paid Pangea $4,759 for rent and back rent. But in February 2018 she was two days late on each payment. Though she said the company took her money, it still moved to evict her for violating the pay-and-stay agreement. (Pangea declined to answer any questions about McHenry's case.)

The day she returned to court it took all of two minutes for Judge David Skryd to issue an eviction order while mumbling something that made Pangea's lawyer, Sheldon Perl, chuckle. Neither of them addressed McHenry as she stood alone next to a "Defendant" sign taped to Skryd's bench. The courtroom was empty, the silence pierced by the whir of the Daley Center's HVAC. McHenry, who's petite with a round face, glasses, and long dreadlocks, wore a black puffer coat and crossbody purse with a plush heart-eyes emoji keychain.

"Good luck to you," Perl said with a placid smile, handing McHenry a copy of the eviction order and shaking her hand. She looked over the sheet of paper, tears welling up in her eyes. It said that she still owed the company nearly $2,000. It was as though she'd hardly made any progress toward paying off her debt.

McHenry's case is typical for Pangea. It's impossible to tell from the court data how many of Pangea's 9,000 eviction cases have included a pay-and-stay deal because they aren't tracked in a uniform manner, but lawyers familiar with eviction court as well as the Reader's own court observations indicate that the company tends to offer tenants a legally binding payment plan on their first day in court. When I asked Goldstein why Pangea takes people to court if they're just going to make a deal, he said that tenants are "not willing to make that deal unless they know you're serious."

It appears that this approach to the eviction process was developed by the company's first attorney and Goldstein's University of Illinois college buddy Tom Raleigh, who, since leaving Pangea in 2014, started his own practice to represent landlords in eviction court. (Raleigh declined to be interviewed.)

Once a tenant agrees to a pay-and-stay deal, the landlord has dibs on their wallets—whatever money they have is more likely to go toward rent first. If the tenant doesn't hold up her end of the bargain, the landlord can get an eviction order from the judge without having to go to trial and make legal arguments. Any defense the tenant might put up—like "I refuse to pay rent while my heating isn't working."—is moot in such an arrangement.

In contrast to Pangea, most Chicago landlords view eviction court as the last possible resort. It costs $400 to file in Cook County (a price tag so high experts said it may be the reason Chicago's eviction filing rate is below the national average). Then it costs at least another $600 to hire an attorney specializing in landlord-tenant law (Pangea's a rare landlord with in-house attorneys). Then it could take weeks or months for a case to be resolved. All the while the tenant isn't paying. By the time a case is heard by a judge, a landlord's patience is usually exhausted and they want their lawyers to play hardball.

Duane Ehresman, the west-side landlord, said he's adopted Pangea's approach to eviction court with the help of Raleigh's law firm. Whereas before he'd give tenants chance after chance to catch up on rent, now he's filing eviction cases as soon as possible. "By doing it this way, I send them to court, they work out an agreement with my attorney, and the court enters the [eviction] order and the order allows them to stay as long as they pay," he explained. "There's nothing nefarious about it, it's protecting everybody."

On the tenant side of the bar, Raleigh—and Pangea—have for years been seen as more benign adversaries precisely because of their preference for payment plans over immediate eviction. The concern, however, is that these deals aren't made in good faith because most tenants don't have a lawyer and may not understand what they're agreeing to. "When the tenant fails the [eviction] order is entered without much discussion," said Mark Swartz, executive director of the Lawyers' Committee for Better Housing. "The judges aren't reviewing the evidence." Often, he added, tenants agree to deals in cases when, had they gone to trial, the landlord would have likely lost.

In court, the Reader observed members of the company's legal team (attorneys Perl, Jennifer Dean, and Elisabeth Ault and paralegal Jose Pantoja) address the gallery of tenants waiting for their hearings: "Does anyone here for Pangea still need to speak to an attorney?" Swartz, who's witnessed this too, said that kind of neutral phrasing can obscure the adversarial nature of the subsequent conversation. Indeed, McHenry said that during her first conversation with Perl, "I didn't quite understand that he was their lawyer."

When a tenant raises her hand, the paralegal or one of Pangea's lawyers take her into the hallway or a side conference room to strike the deal. Several tenants interviewed by the Reader said they felt rushed to sign Pangea's offer; when they asked to see a copy of their ledger, in which the company tracks balances and payments, the lawyers wouldn't provide it. After the tenant signs, the lawyers do all the talking with the judge and set follow-up court dates to monitor the tenant's compliance with the deal. If a renter isn't in the room when the lawyers are ready to bring the day's stack of cases up to the judge, they'll almost certainly be evicted. (Though judges tend to accommodate landlords' attorneys when they're running behind, the same courtesy is rarely extended to tenants.)

Despite the pay-and-stay deals, 60 to 70 percent of the cases Pangea files every year end with eviction orders—about average for cases countywide. A quarter of those orders are issued without the tenant present in court (this is what happened to Krystal Horton).

After an eviction order, most tenants will leave an apartment on their own, but those who don't will eventually be put out by the Cook County Sheriff's office. Deputies will come in a group of four, wearing black uniforms and flak jackets. They'll break down the door if no one answers their loud knocks or the property manager doesn't have the keys. If someone is inside they'll be escorted off the property. Then the officers will slap a neon-green "no trespassing" sticker on the front door.

The deputies won't remove people's belongings—they stopped doing that in Cook County years ago—but if a tenant re-enters the unit from that point forward they could be arrested. Tenants have to make arrangements with the landlord to come back to remove their property; if they don't, it's on the landlord to clear the unit.

Early one Tuesday morning last spring, teams of sheriff's deputies rode out for a day of enforcing evictions in South Shore. The 60649 zip code, which has more evictions than any other in Cook County, tends to make for their busiest days. Seven of the 76 scheduled evictions that day were at Pangea buildings. Deputies are of a positive mind about the company—to them, Pangea's buildings seem clean and they can always count on someone from the company being on-site to sign all the required paperwork.

click to enlarge Cook County sheriff's deputies perform evictions at Pangea properties in South Shore in March 2018.

Maya Dukmasova

The first Pangea eviction was at a squat, mid-century building with empty storefronts on 75th Street, just east of Jeffrey. Four deputies trudged through a dingy hallway and past tacked-up notices about building rules, dos and don'ts to prevent pest infestation, and $300 refer-a-friend advertisements. One of them knocked loudly. No answer. Because the workers on-site didn't have the keys, a deputy grunted and slammed a heavy, long-handled mallet against the door, again and again. But even after four, five, six echoing blows it refused to give. Finally, someone inside opened the door.

Words were quietly exchanged, then Deputy Michelle Mentz announced, her voice rising: "On the chair in the bedroom—weapon." As a sergeant walked to the back of the apartment to retrieve the gun, the tenant and his girlfriend, both in their early 20s, sat on beige leather loveseats in the living room, their faces disoriented, sleepy. The sergeant emerged with a black 9 mm Glock in one hand and a 30-round extender clip in the other. The bullets rang as he emptied the clip into a metal pan on the disheveled kitchen counter. Mentz scrutinized the tenant's FOID card and radioed the office to check if the gun's serial number matched any stolen weapons. It came back clean.

The sergeant dismantled the gun and put the pieces into a foam-padded lockbox. He escorted the couple out of the apartment and, because the man didn't have a concealed carry license, brought the box to the trunk of their car. The deputies marveled at the fact that extender clips are still legal in Chicago, then loaded themselves back into their squad cars and drove off.

There were two Pangea evictions in a large courtyard building about a mile northwest, where the stairway was clean and well lit—revealing that someone hadn't bothered to complete repainting the walls from greige to white. More Pangea fliers decorated the entry—warning tenants of a $25 monthly fee if they opted for a month-to-month rental agreement instead of renewing their lease, and a $25 fine for "false heat calls" if maintenance has to inspect a unit "with working heat."

The first evictee wasn't home. A gray shag rug and red pillows were staged in front of the decorative fireplace in her sparse, sunny one-bedroom apartment; a few logs were carefully arranged in the alcove. On the built-in shelves there was a photo of a Black couple on their wedding day and pillows embroidered with mantras to "do good" and "never grow up." One of the deputies used the bathroom before the group stickered the door, then huffed up three flights of stairs to the other evictee in the building.

An officer pounded on the door, then they waited in silence. A rush of hot air and the smell of freshly baked cookies wafted into the hallway when a shirtless young man finally emerged. His thermostat was cranked up to 80, one of the deputies incredulously noted. "You can't pack bags and stuff," Mentz told the man, who pulled on a sweater before storming out. The apartment was bare but for a twin bed, a small kitchen table, and a couple of chairs. One of them was propped up under the back door handle.

Throughout the day the deputies saw worse places than Pangea's: apartments with broken walls and no kitchen appliances; buildings with dark, filthy hallways and trash-strewn lawns. What came across in the Pangea units was scarcity. A scarcity of furniture, of food in the pantry, of plants or sentimental knickknacks that fill up homes over time. It seemed like no one had lived in these units long enough to really get settled. Or that they'd owned so little they were able to get their belongings out in time to avoid the sheriff.

The deputies' last stop that morning was a two-bedroom in a Pangea building with a neatly trimmed lawn, near 71st and Ridgeland. Someone had moved out in a hurry. A broken camping chair stood alone in the middle of one room, a child's yellow bicycle lay sideways in the corner of another. In the kitchen, the hood light had collapsed onto the range. A finger painting hung partially attached to the living room wall. Underneath broad, impressionistic smears of blue, yellow, and green someone had neatly written "Noah" in black marker.

click to enlarge Sue Kwong

Goldstein told me that evictions are inevitable when buying distressed properties in bulk. Sometimes the buildings Pangea bought were vacant and boarded up, sometimes they had squatters, sometimes they were full of tenants who had been paying rent—but it wasn't clear to whom, how much, and for how long. Pangea refers to such buildings as "economically vacant."

"We went around and met the tenants and asked them to fill out applications, asked them to start paying the rent," Goldstein said, describing what would happen after the company took over. Pangea also created an algorithm to screen new tenants "which basically tried to filter out for people who are likely not to be evicted over time."

To hear him tell it, legacy tenants had to merely pay rent and comply with Pangea's uncomplicated rules for being a "good person" and they were welcome to stay, or move to one of the company's other properties while their building was rehabbed. Goldstein admits that in the beginning the company was often called into building court—but he said it was usually for issues created by the prior owners and occupants of the buildings. Yet Steve McKenzie, a longtime attorney for the city who's brought cases against the company, said Pangea often ran afoul of permitting rules during construction and rehab. "We were finding too many times they were doing it wrong, making mistakes," McKenzie said.

In a particularly egregious example, Pangea was sued by the state in 2010 for violating asbestos abatement laws during the rehab of a building in South Shore. The company ultimately settled, paying $27,000 in fines to the state and $18,000 to the city.

Nevertheless, McKenzie said that things improved over the years as Pangea's managers got the hang of the building code and permitting procedures. "On the whole they're not a headache," he said.

Some tenants who've had to live through Pangea takeovers disagreed. In August 2014, for example, a man named Jose Bratley posted on the company's Facebook page: "Just wondering if it's normal for Pangea reps to go to a building they're trying to evict people from without a court order to do so and remove residents names from mailboxes when people are still living there."

Bratley elaborated when I spoke with him last summer. In 2014 he shared a two-bedroom apartment with brothers Robert and Willie Pye in a 28-unit building in North Lawndale. Unbeknownst to the tenants, the previous owner had gone into foreclosure. One day a notice arrived from Pangea offering the roommates $500 to move out, Robert Pye later told me. Bratley said workers then came to the apartment to take measurements "and just acted like we were in the way." Willie Pye recalled someone from the company trying to break the locks on their and a neighbor's apartment while they were home. One day residents caught another person from the company scraping tenants' names off the mailboxes, Bratley said.

The roommates said the building had issues before Pangea. The back porch was barely holding up and someone had even stolen a radiator from the hallway. City records show that the building was in court for code violations. But it didn't make sense to Bratley that someone would buy the building and want rent-paying tenants to leave when there were plenty of vacant properties in the area. Ultimately, the roommates found a new place in Austin. Robert Pye said it took weeks of following up with Pangea to finally get their $500.

Goldstein and Pangea's current CEO, Pete Martay, declined to answer questions about this particular situation. But "cash-for-keys" deals like the kind Bratley and his roommates described were common in the wake of the foreclosure crisis. They offered a faster, cheaper alternative to eviction court for banks who didn't want to play landlord and new owners who wanted new tenants.

Luke Markewych, who began working as a property manager for Pangea in South Shore in late 2010, said the company was doing "a lot" of cash-for-keys deals. If legacy tenants wanted to stay with the company, they had to reapply and pass Pangea's screening like anyone else. He added that the company would even offer cash for keys to get problem tenants out of a building after they'd rehabbed and re-leased the units as a more expeditious solution than eviction court.

In the fall of 2013 the city enacted the Keep Chicago Renting Ordinance, prompted by reports of mass displacements from foreclosed apartment buildings. The law required new landlords to offer each tenant in good standing either an opportunity to stay in the building with rent increases capped at 2 percent per year, or to pay them $10,600 to relocate.

Markewych left Pangea in August 2013 and couldn't comment on the impact the KCRO had on Pangea's practices. Pangea didn't respond to a question about the KCRO.

Meanwhile, formal eviction proceedings against Pangea's tenants climbed. Cook County court data shows that Pangea's eviction filings had grown by 3,594 percent, from 36 in 2009 to 1,330 by the end of 2013. Pangea was now filing more than any other landlord in Chicago, even property management companies with larger portfolios in low-income neighborhoods. As the company has settled into its real estate holdings over the years, Pangea has continued to file a disproportionate number of cases in the city. Its filings declined by 28 percent between 2013 and 2016, and last summer Goldstein told me these numbers would continue to fall because the years of intense evictions, like those of intense building acquisition, were now behind them. Yet, court data obtained by the Reader this winter tells a different story. In 2017 Pangea's eviction filings climbed once again and broke 1,000 cases for the last two years.

When asked whether taking roughly one in six of their tenants to eviction court is a sign that the company's tenant-screening algorithm isn't working, Goldstein said that Pangea's rent collections tell the real story: "95 percent of rent charged in a given month gets paid."

Goldstein reiterated that Pangea's buildings are "beautiful, they're well taken care of, the people living in them by and large are really happy." He told me to "go spend time at 75th and Coles" and added that "if not for Pangea, the south side would not be what it is today."

click to enlarge A Pangea building in East Chatham was cited by the city for building code violations in October 2018.

Travis Roozée

There are no Pangea buildings right at 75th, but farther south down Coles—past a patchwork of vacant lots, boarded­-up buildings, and tidy homes—the block between 76th Street and 76th Place has three buildings with Pangea's blue and lime-green signs. The company has often acquired buildings in clusters, opting especially for large brick courtyard buildings and those on corner lots.

Craig Williams, 55, has lived with Pangea since 2010—"too long," he said with a chuckle, as he left his building on a sunny summer morning wearing jean shorts and a thick gold chain over his red T-shirt. The location is convenient, a short drive from work. And he could stomach the $790 rent for his two-bedroom. But he said the quality of service has deteriorated.

He sighed. "You have to bitch," he said, before the company fixes anything. He was tired of loud neighbors making his apartment smell like weed and of the burglaries in the building. It ticked him off when management banned barbecuing on back porches. Just the previous week, the power went out and it took a day to be fixed. (A tenant at another building around the corner told an identical story; in the last two years there have been news reports about Pangea's lengthy delays in fixing heating, addressing mold, and restoring water service at other South Shore properties.)

But when it comes to collecting rent money, Pangea is aggressive, Williams said, describing neighbors' complaints about the company's collection practices. "They'll put their foot on your neck." Since Pangea bought the 38-unit building where Williams lives, it's filed eviction cases against an average of nine tenants every year, court records show. In 2014 they took 17 people to court—nearly half the building.

It seems that high tolerance, rather than satisfaction with Pangea, has kept Williams here all these years. But recently and "completely out of the freaking blue," the company started charging $30 per month for water, he said, and "that is one of the reasons why I can't wait to get the hell out of here."

In Evicted, Desmond writes that low-income people looking for housing or work are often assumed to be "more or less 'rational actors' who recognize trade-offs and make clear choices." Through his research, however, he saw people wear out from long, fruitless searches for decent apartments or jobs. The people he encountered could better be characterized as "'exhausted settlers,' who accept poor housing in a disadvantaged neighborhood or a dead-end or illicit job after becoming depleted and disheartened from trying and trying and failing and failing."

The journey from rational actor to exhausted settler is often shaped by age, health, access to resources, and knowledge of rights. People settle when there's a scarcity of good housing options. Pangea—which Goldstein and Martay repeatedly cast as a white-hat operator in a market rife with slumlords and crooks—smooths the way with a comparatively forgiving tenant screening. Applicants need proof of income for only the last two months (and it only needs to be double the rent). Bad credit isn't usually a problem. There's also a move-in fee instead of a security deposit— although you never get that back, it's only half a month's rent, sometimes less, and easier to scrape together.

In Austin, 52-year-old Pangea tenant Lois Staples, who gets around in a power chair, said the bathroom door in her studio at 5501 W. Washington isn't wide enough for wheelchairs, and there aren't any grab bars. The elevator in the 150-unit building frequently breaks down and her son has to help her up the stairs. (Department of Building records cite elevator maintenance problems at the property as recently as this month.)

But Staples said she won't move because at least she's not dealing with rats "knocking on the door," like she was under prior management. Meanwhile, Quincy Miller, 33—another tenant in the building who uses a wheelchair—said that after just a few months in the building he decided he wouldn't be renewing his lease.

Miller said he can't maneuver his wheelchair into the laundry room because a post—apparently installed to prevent theft of the washers and dryers—obstructs the doorway. He described having to hoist himself up flights of stairs to his fourth-floor apartment using his upper body when the elevators are broken. He worried about what might happen to him and at least six other tenants in wheelchairs if there's a fire. A gregarious man who seemed to know everyone in the building, he said he'd heard tenants complain to Pangea's workers about bedbugs, roaches, and mice, about overflowing toilets that take forever to fix. He'd seen frustrated neighbors break their lease and move out. (Soon after we met, Miller fell behind on his rent. He entered a pay-and-stay deal with Pangea but couldn't keep up on his fixed Social Security Disability income. He was evicted a day before his lease was originally set to expire. He'd just qualified for a Section 8 voucher and was afraid he'd lose it with the eviction on his record, but a judge ultimately agreed to seal the case.)

Several commercial tenants interviewed had similar complaints. Anthony Scott, who runs the Shear Imagination barbershop in a Pangea building at Madison and Austin, said the company is the worst of the three landlords he's had in 12 years. Pausing mid-haircut one afternoon, he told me that since 2012, Pangea has raised his rent from $1,200 to $1,400 and started charging for maintenance, garbage collection, and water. "They want us to pay for everything and they don't want to do nothing." Meanwhile, he sees the building deteriorate. He said his clients who live above the shop complain of trash in the hallways and rodents in the apartments. Scott said previous owners were accessible. But now, even though one of Pangea's offices is right in the building, he has to route all his service requests through a call center and wait days for an answer.

Chawanya Hayes, who had owned a nail salon in the same building since the 90s, posted a frustrated message about Pangea on Facebook in 2014. She complained of maintenance delays and that her shop didn't have air conditioning for two summers. In 2017 Hayes and her aunt, who ran a printing shop in the building, moved out. "It was totally offensive to be long time tenants and have to go around getting petitions signed by other tenants for change," she told me in a recent text message.

click to enlarge "Don't let me get started about Pangea!" said Ronald Hunt Sr., the owner of a red house next door to one of the company's apartment buildings in South Shore.

Matthew Harvey

Pangea's neighbors in nearby buildings and single-family homes were generally keener on the company than tenants. In interviews throughout the south and west sides, they were mostly glad that vacant buildings that were once "drug houses" and eyesores had been revived. One exception was a homeowner living next to a 42-unit Pangea building two blocks south of Craig Williams on Coles Avenue.

"Don't let me get started about Pangea!" Ronald Hunt Sr. said, rolling his eyes. He was thrilled when Pangea bought the abandoned, squatter-filled property in 2012. Hunt even let the company use his backyard when they were rehabbing it and said Pangea promised to fix the landscaping destroyed by construction. He said it never happened. (Pangea declined to comment.)

He offered a tour of his property, pointing out a couch and mattress dumped in the back of the building after an eviction, bags of trash he said Pangea tenants have tossed into his backyard, and pools of yellow grease in the gangway that the same tenants poured from their kitchen windows. He said he'd been complaining to Pangea's workers and calling the company's office about these problems to no avail. "They're not screening their tenants enough, because they're constantly moving in and out."

Is Goldstein aware of the research on long-term consequences of eviction on individuals and communities? "I'm not sure," he said. He told me that the effect of an eviction filing on a person's record "is probably not that bad" if they don't actually get evicted. "What's the ideal scenario?" he asked with a hint of irritation. "To let people live in units for free or to have them be problems for all the folks around? I think that's a great hypothetical question, but there's no actionable answer to that question."

Of course, there are plenty of actionable answers. Some big and some small. Some might require the overthrow of capitalism as we know it, others for Pangea to do extra paperwork.

If tenants face eviction because they don't have enough money, the solution is for rent to be cheaper, or for people to have more money. Setting aside sweeping policy changes like universal basic income or rent control—neither of which are likely to become a reality in Chicago anytime soon—there are already government programs in place that attempt to alleviate the burden of rent. Section 8, also known as the Housing Choice Voucher program, provides federally-funded subsidies to tenants in the private rental market. And, according to Chicago Housing Authority records, Pangea already takes more tenants with vouchers than any other landlord in the city—some 1,500 of the CHA's 46,000 vouchered households live in the company's units. Additionally, both the city and state have homelessness prevention programs designed to help tenants experiencing financial emergencies avoid eviction. Pangea, however, doesn't take homelessness prevention funds.

Lynette Barnes is a senior program manager at All Chicago, a nonprofit that administered $1.5 million in state homelessness prevention grants in the city last year, helping nearly 1,000 households stay current on rent or utilities. Pangea is the only landlord she's ever known who refuses to take the money—up to $2,500 per household. "It's just crazy," she said. The Reader heard a similar story from a Pangea tenant who said he'd qualified for $1,400 in assistance from the city's homelessness prevention program (which is funded through HUD) but that a Department of Family & Support Services case worker warned him Pangea wouldn't accept it.

click to enlarge A Cook County Sheriff's deputy prepares to perform an eviction in 2017.

Maya Dukmasova

Goldstein didn't have an explanation when I asked why the company wouldn't take the grants. Pangea's head of marketing, Arun Das, followed up in an e-mail: "Pangea will accept payments from all rental assistance programs as long as they don't restrict our legal remedies or rights under the terms of the rental agreement." To get the emergency grants, landlords have to agree to suspend any pending eviction proceedings.

The federal government's standard for housing affordability is that rent and utilities (or a mortgage) shouldn't consume more than 30 percent of a household's income. In Chicago, however, more than 70 percent of the poorest tenants (for example, a four-person household with a yearly income of less than $25,400) pay more than half of their income toward rent. According to the DePaul Institute for Housing Studies, the gap between the supply and demand for affordable housing in the city stood at 119,000 units as of 2016, and it's grown since the recession. Given these conditions, thousands of tenants will inevitably face eviction every year, and advocates are attempting to make the legal process more fair.

Chicago's landlords tend to view eviction court as a venue stacked in tenants' favor because of the high case filing fees and the city's Residential Landlord Tenant Ordinance that, at least on paper, guarantees tenants protections—like the right to withhold rent if the landlord doesn't address maintenance problems. However, the Reader's analysis of court records show that 60 percent of tenants who wind up in court are evicted and the majority of them don't have legal representation. This is confirmed by a new database of city eviction records created by the Lawyers' Committee for Better Housing and rolled out this week—while about 80 percent of landlords have lawyers, about 80 percent of tenants don't. Nearly a third of eviction cases are tried on the first day a case comes before a judge—meaning thousands of tenants are evicted the first time they come to court.

Legal aid groups and tenant advocates have successfully pushed for the installation of recording equipment in the Daley Center's five eviction courtrooms. It's supposed to be up and running by the end of June. Without it, litigants have no meaningful way to appeal judges' decisions since proceedings aren't transcribed. This won't necessarily change the power imbalance between landlords and tenants, but advocates hope it will keep judges in check and ensure fairer case outcomes. As the Reader reported in 2016, a lack of recording turns a courtroom into a "black box" where judges have been observed blatantly violating procedures and misinterpreting the law.

Other efforts are underway for "plain languaging" court documents like summonses and judges' orders so they make more sense to average people. Last year, after much debate, the Illinois Supreme Court's Access to Justice Commission changed the name of the court order judges issue to tell tenants they've been evicted from "order of possession" to "eviction order."

Meanwhile, in Springfield, House Bill 4760 proposes automatically sealing every eviction case filed, unsealing it only if a tenant is actually evicted. The bill was introduced last year after a report by Housing Action Illinois and LCBH found that tenants who were filed on but never evicted continued to have difficulties when applying for apartments years later. Credit agencies also collect information on filings—including the debt landlords claim—even if the case was eventually dismissed or the final money judgment entered against a tenant was lower. Multiple tenants interviewed for this story complained that, even though they were never evicted by a judge, Pangea showed up as outstanding debt on their credit reports. Automatic sealing could clear the records of about 6,500 Chicagoans per year, facilitating housing mobility and integration.

Municipal governments elsewhere have taken more ambitious steps to grapple with evictions. New York and San Francisco have enacted ordinances guaranteeing a lawyer to every tenant in eviction court. But even barring that, existing legal resources, particularly mediation, can help tenants get a fairer shake in pay-and-stay deals. The Center for Conflict Resolution currently mediates about 100 eviction cases in Chicago per year—60 percent of these negotiations end in an agreement, of which 97 percent are fulfilled by both parties. Since mediation is provided by a nonprofit, it doesn't cost taxpayers a penny, and yet, in observing more than 100 hearings in Chicago's eviction courtrooms, the Reader heard a judge or other court staff tell litigants about the availability of this service no more than a couple of times.

Much research remains to be done to understand how the effects of eviction ripple through Chicago neighborhoods. Goldstein and Martay declined to discuss whether evictions constitute a business challenge for Pangea, but the company seems to be thriving despite all the losses involved in putting tenants out. Eviction court judges have awarded the company $11 million in judgments over the last decade—money that landlords stand almost no chance of collecting after tenants are evicted. When it comes to landlords in poor communities, evidence suggests that the profit margins from rents could be high enough for eviction to not constitute a serious threat to the bottom line.

In their January paper, Desmond and Wilmers write that the perception of the financial risk involved in renting to the poor appears to be out of proportion with the reality. They also discuss policy interventions that could tackle the eviction crisis—from rent control to insurance for protecting landlords in case a tenant defaults—but note that "public policies aimed at easing families' rent burdens should be grounded in a firm understanding of property owners' business practices." This understanding is hard to come by since landlords, particularly those who provide unsubsidized housing, aren't overseen by any government agencies. While the state attempts to protect tenants from having to live with lead paint or bedbugs, there are currently no limits to how much landlords can profit from rents, no tracking of landlords' losses, and no way to know whether tenants in any particular neighborhood housing market are being subjected to unreasonable exploitation. It's hard to have an "actionable answer" to any problem in an information vacuum.

Krystal Horton is the first to admit that she was late to eviction court—and that things could have turned out differently had she not been. But she'd never been to the Daley Center before that June morning in 2016. She didn't know there could be long security lines, that the childcare center doesn't take babies, that being even a few minutes late could mean she'd be evicted. She said she wished she'd had a better understanding of the legal system and knew how and when to assert her rights.

In the wake of her eviction from Pangea's building that August, Horton's life took many turns for the worse. She was suddenly homeless and went to several shelters. With an 11-year-old and a toddler she worried about safety. She found the shelters dirty and wasn't comfortable sleeping in the open. She was terrified of bedbugs. Her son was starting sixth grade that September and she needed to figure out where to enroll him, so finally she decided to move back to Homewood, her hometown in the south suburbs where she still had friends and relatives, including her mother.

But she didn't return home right away because she and her mother weren't on very good terms. "She thought I made poor choices in relationships." Besides, she added, "there was a kind of shame" in coming home because of an eviction.

Horton applied for apartments but said she was repeatedly rejected because of the eviction on her record. She and the kids bounced around friends' and relatives' homes and sometimes slept in the car. She worried about where her son would do his homework every night. She saw him struggling with all the upheaval.

"It was very emotional for him because he felt he had to be the man of the house, he thought he had to protect me and my daughter," Horton said. In a matter of days his world had been turned upside down, from having his own room and enjoying home-cooked meals to "having to sleep on cots, spraying down our furniture, having to eat food out of paper bags, seeing others pulling clothes out of bags." He was angry with her for a while "because he thought it was my fault. He said, 'I don't want this to ever happen to us again.'"

By October, things were looking up. Horton landed a full-time job at the Amazon warehouse in Joliet and was able to rent an apartment in a small four-unit building across the street from her son's new school. The rent was $975—36 percent higher than what Horton had been paying Pangea. Though she'd had a difficult on-and-off relationship with her daughter's father, things had briefly improved and she was pregnant again.

Then, in November, car trouble hit again. One day she even abandoned it on the highway shoulder and walked for two and a half hours to work. She didn't want to give Amazon a reason to fire her. The job came with benefits, and as her due date neared she'd need maternity leave. But in March, she said she was fired for spending too much time "off task" as a result of frequent bathroom breaks (these kinds of dismissals are a documented phenomenon at Amazon's warehouses). Her car was repossessed soon after.

Just when Horton thought she could get through the next month with her tax refund, she learned that the state of Illinois was garnishing it because she hadn't responded to a notice to sign up for a student loan consolidation and had gone into default. She said she never received the letter, probably because it had gone to her Pangea address. Meanwhile, her building was sold and she fell behind on rent. Her new landlord filed an eviction case against her 364 days after Pangea first took her to court. Horton was then nine months pregnant and preeclamptic.

After ruling against her at the beginning of July, the judge gave her an extra month to leave so she wouldn't be homeless with her newborn daughter. By then, she'd scraped together enough money to pay the landlord back but she said he wasn't interested. (Reached by text the landlord, who lives in Texas, denied knowing Horton.)

Unemployed, with her credit wrecked, her car gone, two evictions on her record, no insurance, three kids, and a custody battle erupting with the father of her daughters, Horton moved in with her mother. It hasn't been easy. She and her mom still butt heads, being a single mom is tough, and work isn't always steady. But she said she wanted to share her experiences with the Reader so that other people facing similar challenges know that they're not alone. In retelling her story, Horton sometimes laughed as she chronicled one misfortune after another. She turned serious when I asked how she was able to stay in high spirits while revisiting all that's befallen her.

"When life happens and you have no control over it, the most you can do is sit back and take a deep breath and laugh it off to keep from crying. To keep from screaming," she said. "At the end of the day I still have children looking at me. I still have to keep moving, life still goes on." She said that it can feel like drinking is helpful, but the problem with drinking is that "it costs more money. What costs free? Nothing but a good laugh."

Two years after her second eviction, Horton still lives with her mom. She's working to repair her credit, and she recently landed a full-time job as a CNA and is studying for a bachelor's degree in nursing. Horton still wonders where she'd be if Pangea hadn't evicted her. She remains resentful that, as she sees it, she never got her day in court on that case. But she also understands the situation from Pangea's perspective—her unit wasn't generating income.

She's anxious about looking for apartments again, knowing she'll likely face a gauntlet of rejection. She wants to save up enough money to buy her own place, maybe even a two-flat with a second unit she could rent out. "I feel like I can be a better landlord than what I've experienced," she says. "Eviction is something I wouldn't wish on my worst enemies." v

This story was produced as part of the Social Justice News Nexus fellowship at the Medill School of Journalism, Media, Integrated Marketing Communications at Northwestern University. Libby Berry, Matthew Harvey, David North, Grace Stetson, and Naomi Waxman contributed reporting to this story.