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End of an Era Apartments



Oakwood Apartments in Mount Dora is the kind of no-frills, low-income housing found almost anywhere in America. The 72 apartments, which sit in a low-income community in north Mount Dora on Lincoln Street across from a church and Sugar Boo's Bar-B-Que, were built in 1979 as part of a massive federal housing program. They are 18 one-story buildings scattered like boxcars across acres of shade trees and knee-high grass. A large wrought-iron gate, painted green, surrounds the buildings. Police cars circle almost constantly through this predominately black neighborhood where the residents are the usual kinds of tenants that tend to populate low-rent housing: single women with children, and seniors.

Though well maintained, the cinder-block apartments aren't much to look at. Each building is a four-plex with an overhang that serves as a front porch. The complex boasts no swimming pool and no tennis courts. The apartments themselves have no central air conditioning or heat, and something about the brown-and-yellow paint scheme screams "low rent." Even so, Oakwood is worth a lot of money.

When the Center for Affordable Housing (a Seminole County nonprofit agency that builds and maintains low-rent housing) wanted to buy the apartments earlier this year, it needed $2.5 million to cover the purchase and still have money left over to remove asbestos and install central air.

The Center tried to gather the money from a number of sources, including Mount Dora city officials. To the surprise of officials of the Center for Affordable Housing, Mount Dora pledged $256,000 for the sale. The trouble was, the Center failed to obtain funding from another key source: the Florida Housing Finance Corp., a state agency that in 2001 was responsible for funneling nearly a half billion dollars of federal and state money to developers of affordable housing.

Even though the Center for Affordable Housing manages 98 rental duplexes and multifamily developments, and has built 141 single-family homes, the Florida Housing Finance Corp. said the smaller nonprofit didn't have enough experience renovating apartment buildings. That decision should come as little surprise to anyone familiar with how Florida handles affordable housing.

Out with the old

Florida Housing Finance Corp. sets money aside each year to build housing for the elderly, for farm workers and fishermen, and to construct urban in-fill. They decide who gets money based on a scoring system weighted for developers who build three- and four-bedroom apartments, or those who build in counties with less than 50,000 residents.

But the agency has no preference for preserving existing affordable housing units; Florida is one of only 15 states that has no set-aside for these types of housing. Instead, the majority of the Florida Housing Corp.'s money goes to build new, middle-class units, complete with workout rooms and swimming pools, and prices to match. Rents at these developments average $500 a month, depending on location.

There is debate among housing advocates about how luxurious to make affordable units. But no one argues that the federal government is doing all it should to stop the loss of thousands of low-income buildings constructed decades ago using federal money. Oakwood was one of nearly a million developments built under three separate Housing and Urban Development programs between the 1960s and 1980s. Since 1995, nearly 200,000 of those apartments have been lost from the federal low-income housing inventory.

Florida ranks high among the states that have lost the most. Since 1995, 40 contracts representing nearly 5,000 units have expired.

Orange County hasn't fared as badly as the rest of the state because when the population boom began in earnest here in the mid-1970s, affordable housing was not a priority. Even so, the metro Orlando area lost three apartment complexes, totaling 365 units in the last five years: Eustis Manor, a 55-unit building in Eustis, opted out of the HUD program in 1998; the 16-unit Dorchester Apartments in Lake Mary bought out its HUD contract early and began charging market- rate rents; and the 144-unit Sand Lake Village Apartments' contract expired in 1997. Rents at these apartments increased an average of $350 once their owners opted out of the HUD program.

Managers at a fourth complex, the Lake Mann Gardens on Orlando's west side, wanted to remain in the affordable housing program, but they got kicked out four years ago when they couldn't maintain their property. A total of 189 tenants had to find another place to live.)

Of the remaining 20 complexes in Orange County with contracts expiring by 2013, 11 are owned by churches or nonprofit organizations, meaning they should remain affordable in perpetuity.

Tell it to Mel

To build the developments, HUD offered contractors 40-year, low-interest, insured mortgages if they agreed to sign a 20-year commitment to affordable rent. Now that those contracts are expiring, most building owners have agreed to remain in the program on a year-to-year basis.

But Congress is no longer willing to spend money on multi-year contracts the way it once did. When property owners aren't locked into long-term contracts, nobody can say for sure how many affordable units will be available from year to year.

So many developers have let their contracts expire that earlier this year the United States Conference of Mayors recommended Congress set aside $50 million to help nonprofits buy affordable apartments from owners leaving HUD programs.

One solution would be for the Bush administration to put aside more money, via HUD, to keep aging buildings affordable. But HUD secretary Mel Martinez won't do it.

The 55-year-old Martinez is a former personal-injury attorney who became HUD secretary in President Bush's administration after two years as Orange County chairman.

Like other problems at HUD, Martinez didn't cause the loss of affordable housing. But he hadn't done anything to solve it either.

He told the Washington press corps in June that with the nation's rental vacancy rate at 9 percent, he is confident everyone in America can find an affordable place to live.

His view overlooks a report issued last year by the nonpartisan Millennium Housing Commission stating that a gap of 1.8 million homes for the lowest-income Americans already exists. To overcome the gap, developers would have to build 250,000 affordable units each year for the next 10 years, according to figures provided by the National Low Income Housing Coalition.

Poorest of the poor

The important thing to keep in mind about these apartments is that, unlike most developments built today, they house the poorest of the poor. Conventional wisdom holds that people who qualify for low-income housing are mostly welfare and food- stamp recipients. In fact, the federal government recognizes gradations of poverty. For example, in Orlando, a family of four earning $32,820 is eligible for certain types of public assistance.

It is these types of blue-collar families that HUD and other agencies have targeted as the prime beneficiaries of public largesse.

Under the Clinton administration, HUD set an agenda of home-ownership and mixed-income housing, both of which generally benefit people with incomes above 60 percent of a particular area's median income. (In Orange County, the median income is $54,700 for a family of four).

Martinez has also championed home-ownership, which lends itself to Republican ideals of self-sufficiency; and mixed income housing, which is based on the idea that concentrating low-income people in a confined geographic region isn't good public policy. Even public housing agencies, generally the last repository for the poorest Americans, prefer the gainfully employed when prioritizing voucher and housing lists.

Giving preference to the working poor leaves an important question: What about the 9,642 Orlando households stuck below 30 percent of the area median income?

"I think you know the answer to that," says Orlando Housing Authority executive director Vivian Bryant. "There's only so much affordable housing."

Congress and HUD, meanwhile, have made only tepid attempts at preservation. In 1987, Congress passed the Emergency Low Income Housing Preservation Act, followed in 1990 by the Low Income Housing Preservation and Resident Homeownership Act, allowing money to be set aside for tenants who want to buy their buildings. Though the programs spent a total of $2 billion (or 6 percent of this year's HUD budget) and saved 120,000 properties, Congress zeroed out the acts in 1997 because they were considered too expensive.

Homeless security

Economics, however, can't explain what happened in August. That's when Congress took $300 million earmarked for affordable-housing preservation and allocated it to homeland security. The $300 million had accrued from developers who paid to leave the HUD affordable-housing program early.

The Democrat-controlled Senate wanted the money spent on preserving existing affordable housing. But the Republican House rescinded the money and reallocated it to homeland security, disappointing housing advocates who have seen Secretary Martinez become nothing more than a mouthpiece of President Bush's failed public-housing policies. "At some juncture, this administration has to face up to federally subsidized housing," says Michael Bodaken, executive director of the National Housing Trust, a 16-year-old nonprofit dedicated to preserving HUD-assisted multifamily homes. "By hiding from the issue, they're not doing people who live there any favors."

Martinez and HUD answer such criticisms by saying that the agency has increased the amount of money flowing to home-ownership and voucher subsidy programs. But home-ownership requires that home-owners have a job. And not everybody wants to own a home. The elderly, for instance, sometimes prefer to rent because they anticipate their life expectancy doesn't allow them to enjoy the equity of a home.

Vouchers are no panacea either. Landlords can, and often do, tell voucher holders they don't want to rent to low-income households.

Don't count on it

In Central Florida that kind of discrimination is less of a problem than elsewhere. According to Bryant, the OHA executive director, the problem for voucher holders isn't locating a place to rent in Orlando. Almost 100 percent of the vouchers issued through her agency are put to use.

The problem is that if you don't already have a voucher, you can count on a long wait.

The Orlando Housing Authority has some 4,000 names on its voucher list, so many that they simply stop taking names for part of the year.

A benefit of project-based subsidies like Oakwood Apartments is that tenants and housing officials can count on them as part of an area's housing stock. Subsidies stay with the building, requiring less movement of tenants. "And these are families who can't afford to move," says Craig Castellanet, staff attorney for the National Housing Law Project.

One way to preserve this type of affordable housing is for Congress to mandate that a certain percentage of the developer tax-credit program be set aside for its preservation.

Tax credits are administered by state agencies such as the Florida Housing Finance Corporation. The tax-credit subsidy allows developers to take a percentage of the development off of their income tax. For example, a $100,000 building would be eligible for a $90,000 write-off over a 10-year period. Or contractors can sell the credits to major corporations for cents on the dollar. Either way, the program is such a success in Florida that developers are agreeing to keep their rents affordable for up to 50 years. The drawback, as already noted, is that their apartments are still too costly for those in extreme poverty.

If it were willing, Congress could pass legislation that required Florida Housing, and agencies like it, to set aside a percentage of federal tax credits for the preservation of affordable housing.

But housing advocates are divided on this approach. Castellanet of the National Housing Law Project approves of it. But Michael Bodaken of the National Housing Trust says he'd rather see state and local officials continue to decide how much to set aside for preservation.

Bodaken would prefer that Congress allocate $10.5 billion for the preservation and new construction of 1.5 million low-income units as part of the National Housing Trust Fund Act Congress is now considering. As the act now stands, 75 percent of the apartments would be constructed for extremely low-income people, and 75 percent would be earmarked for rental units, as opposed to ownership.

Congress is expected to debate a bill authorizing the money in the coming weeks. Housing advocates are lined up in support of the bill, but House Republicans have already started working against it. Last week they gutted elderly and homeless programs from the bill and introduced language that prevents it from being amended to fund the National Housing Trust. "There's been a lot of behind-the-scenes jockeying," says a House source.

Don't expect Mel Martinez or other HUD authorities to reign in their Republican counterparts. The federal agency, launched in 1965 with the idea of giving everyone a shot to hang a shingle, has been all-but forgotten in the Bush administration. And America's poor folks have the anxiety to show for it.

Money for nothing

The announcement in the Sanford Herald said to report to the Seminole County Housing Authority offices at 8 a.m., Sept. 19.

But Teresa Jones discovered through the rumor mill that the deadline had changed. If she wanted a chance at a voucher that would pay her rent for the next two years, she would have to drag herself to the Housing Authority's Oviedo offices in the middle of the night on Sept. 18.

By the time Jones arrived at 8:45 p.m., she was almost too late. She was the 86th person to receive a red ticket, which did nothing more than give her the privilege of returning the next day to stand in line.

The next morning, Sept. 19, about 500 people showed up in Oviedo, but some of them didn't have a red ticket. "Some of the people who came the following day didn't know anything about the midnight meeting," Jones says. "Some people who didn't have a ticket turned around because they didn't think they would be able to apply. There were a lot of people upset about that."

They were able to apply because Seminole County added 18 new vouchers, each good for roughly $650 in monthly rent. The county recently doubled the amount of money in its Tenant Based Rental Assistance fund -- to $300,000 next fiscal year -- to pay for a total of 45 vouchers. Funded by the federal government, the TBRA program is similar to the well-known Section 8 voucher system, only TBRA normally has a two-year cutoff period.

But the money comes with strings attached. Seminole requires applicants have a job or attend school, an they can't have a criminal record. Jones was denied a housing voucher because two years ago she received a misdemeanor battery conviction for spanking her son.

"I feel it's really unfair," she says, "considering all that time I put in just to get a ticket."

Housing advocates agree that, with so little public assistance to go around, poor people shouldn't be disqualified for arbitrary reasons.

"Until we have an allocation of funds that meets our demand, we shouldn't experiment with ideas like this," says Bill Newman, director of the Center for Affordable Housing in Sanford. "Priorities should go to where the need is greatest."

Seminole officials prefer to give vouchers to students and workers because their program was designed to encourage self-sufficiency. "It's like the analogy, teach someone to fish, don't just give them a fish," says Colleen Rotella, Seminole's community resource manager.

Rotella says the county set up the program using guidelines from the U.S. Housing and Urban Development. The more common Section 8 voucher system is better designed to help the chronic poor anyway, she adds.

But not every county uses its TBRA money the way Seminole does. Orange County, for example, houses seniors and the disabled with all of its 100 vouchers (worth $500,000). Instead of forcing people off the subsidy in two years, Orange administrators have made TBRA semipermanent.

"There's no reason why we can't continue funding the program," says Mitchell Glasser, Orange County's manger of housing and community development. "We have five years worth of money."

Glasser agrees with affordable housing advocates that temporary assistance dollars should be funneled to those most in need.

"I don't know why you'd use such a limited resource on college students," he says.

"Students' options are not limited," adds Newman, the director of the Center for Affordable Housing. "Their options are unlimited, frankly."


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