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Real Estate Changing the model: Fort Worth Housing Solutions seeks to fund renovations and...

Changing the model: Fort Worth Housing Solutions seeks to fund renovations and new affordable housing for those in need.

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Paul Harral
Paul is a lifelong journalist with experience in wire service, newspaper, magazine, local and network television and digital media. He was vice president and editor of the editorial page of the Fort Worth Star-Telegram and editor of Fort Worth, Texas magazine before joining the Business Press. What he likes best is writing about people in detail and introducing them to others in the community. Specific areas of passion are homelessness, human trafficking, health care and aerospace.

The face of public housing assistance in Fort Worth is changing, both in the kind of people in need of housing help and in the way the city agency charged with providing that help – Fort Worth Housing Solutions – is addressing the need.

That in itself may have a tangential impact on the overall business of Fort Worth, but the massive redevelopment of the 41-acre Butler Place project just east of downtown will have a significant one. Plans are underway to determine what type of development will ultimately be done there.

Fort Worth Housing Solutions received approval from the U.S. Department of Housing and Urban Development in October 2015 to convert Butler Place into a Rental Assistance Demonstration Program, which lets public housing agencies and owners of certain at-risk, federally assisted properties convert their current assistance to long-term, project-based Section 8 contracts and secure financing to help reduce the severe backlog of needed capital repairs.

Ultimately, the program will see the closing of Butler Place and the redevelopment of that property into some form of mixed-use project that might include market-rate apartments with Section 8 contracts for housing assistance.

The need for public housing is great, says Selarstean Mitchell, vice president/assisted living for Fort Worth Housing Solutions (FWHS). People are moving to Fort Worth every day, she says, “and every day, we get inquiries from the general public telling us their story, that they need housing. And, for the most part, we can’t assist them.”

That’s one reason FWHS is participating in the Rental Assistance Demonstration Program (RAD), a relatively new HUD program designed to address the capital needs of public housing apartments.

FWHS recently reopened its wait list for housing vouchers – the list of people seeking assistance with their rent ¬– for one week, from 8 a.m. Nov. 13 through 11:59 p.m. Nov. 17. The last time the agency opened the voucher wait list was in 2011, when the organization added more than 18,000 names.

Mitchell says she’s seeing a change in the potential clientele.

“People who were working, lost their jobs, or because of a disability, or disability of a family member, they find themselves in need of housing assistance,” she said. In addition to rent assistance, the agency also has what she calls “hard units” in apartments that it owns.

Fort Worth Housing Solutions is governed by a five-member board of commissioners representing a cross-section of the community and appointed by the mayor for two-year terms.

Board Chairman Terri Attaway says RAD presents a good opportunity to change “public housing to the business of affordable housing.”

She said that before RAD, agencies were highly restricted in their ability to upgrade aging housing and the program provides a way to address underfunded capital needs.

“In Fort Worth, we have been out of the box with our approach to RAD. We are including RAD units in many developments throughout the city, which gives our residents opportunities throughout all parts of our great city,” Attaway said.

Butler Place

FWHS announced earlier this year that, based on a request for qualifications reviewed by a local committee, it had selected Atlanta-based Columbia Residential and its local partner, Hap Baggett, as the master developer for Butler Place. Columbia and Baggett previously worked together to develop Renaissance Square in East Fort Worth.

A request for qualification is different from a request for proposal because the specific project under consideration must still be negotiated. The then-president of FWHS, Naomi Byrne, said negotiations on the contract should be completed within 60 days. However, Byrne’s employment contract was not renewed and she left the agency.

Attaway said no development contract has been signed because there is no completed final study of best uses for the Butler site. “This is a major undertaking and it is very important to consider all options,” she said.

The FWHS board has focused on relocating Butler residents before redevelopment begins. “It is most important that the needs of the residents are met first,” Attaway said.

Butler Place public housing complex opened in the early 1940s and was expanded in 1963. It consists of 412 units in 68 buildings. It was created under the Housing Act of 1937, and part of the property was listed on the National Register of Historic Places in 2011. About 900 people live there.

Moving Out

FWHS has begun moving residents out of Butler Place into other housing it owns, with a target date of October 2018 to place the residents, said Mary-Margaret Lemons, general council and interim executive director of Housing Solutions.

“Our first priority is to relocate all the residents,” Lemons said, and the agency is looking at placement in housing the agency owns.

“We’re identifying all the possibilities for redevelopment plans here, but that’s kind of the second phase of what will happen at Butler,” Lemons said.

However, she said, it won’t be public housing.

Right now, the property is still encumbered by HUD, but once HUD releases what is called the Declaration of Trust, there will be no restrictions on how the property is used.

Whether that will be mixed-unit apartment buildings, office space, single-family units or some other combination of development, the money from the development of the land will come to FWHS for use in housing assistance.

That’s similar to what the agency did when it sold the Ripley Arnold public housing complex to RadioShack Corp. to build a corporate campus downtown. The property is now owned by the Tarrant County College District.

FWHS used part of the proceeds from the sale of Ripley Arnold to buy the Stonegate Apartments – a controversial decision among current residents and neighbors at the time. That property is now named The Villas of Oak Hill at 2501 Oak Hill Circle in Fort Worth.

“Looking back, we know that was hard at the time, but we can consider it a success today,” Lemons said. “We’re proud of that property, and it’s been operating successfully for many years. So, you know, lots of lessons learned, but we consider it very successful,” Lemons said.

“Our public purpose is always going to be to provide affordable housing. So everything that we do is to support that purpose,” Lemons said.

RAD is also planned for the historic Stop Six/Cavile Place area, where the agency wants to build new multi-family housing and demolish old public housing and revitalize development in the whole Stop Six neighborhood.

“We are working with the city to come up with an updated plan for Cavile at the moment,” Lemons said. “We had planned on unveiling two apartment complexes that we were going to develop. But, due to market and site neighborhood standards, the poverty rate and the crime rates over in the neighborhood, those plans were not developable at the time, so we are kind of starting back at the drawing board, to rethink what we’re going to do.”

FWHS is holding vacant land worth about $3 million that it had planned to use for new development. There are 300 units at Cavile Place and the two properties the agency was going to develop would only replace 50 of those units.

“Based on the price per door, that didn’t really make sense in the long-term,” she said.

“We were already short of money, that was already in the red and we needed to replace 250 more,” Lemons said. “If we didn’t have a long-term plan, I didn’t want to start that until we figured out how we were going to accomplish it.”

But, she said, “We are committed to that neighborhood, and we will be a part of redeveloping that neighborhood.”

At Butler Place, 15 people identified through a lottery process will be moving to FWHS’ newest property, Stallion Pointe at 9075 Race St., between December and January, Lemons said. “We had 126 people enter that lottery out of the 412 units that were available. Then we’ll have another lottery soon, for Pennsylvania Place (250 E. Pennsylvania Ave.).”

Lemons said there is a list of properties for Butler residents to move to – about 12 or 13 on the map currently – and the agency is adding to that list as it identifies units across the city.

“We anticipate it will probably take about two and a half to three years to either finish construction or acquire all the properties and actually physically relocate everybody,” she said.

“I think there’s some excitement about the momentum that we have, now that the physical relocation’s taking place,” Lemons said.

The Wait List

Mitchell says that FWHS clears names off the wait list relatively quickly, in part because people on the list are transient and the agency may not be able to contact them should vouchers become available.

“Over the years the numbers go down, and we’re required to purge the list periodically,” Mitchell said. That happened this year. “After we purged it, we ended up with about 1,000 names on the wait list,” she said. “Once we get to a certain number, we reopen it, just so that we can have a good list for vouchers as they become available.”

It’s not that there are a lot of housing vouchers available. HUD allocates 5,104 vouchers to Fort Worth Housing Solutions. The need, said housing officials, is easily twice that. And as with many issues, it’s complicated.

“Off the top of my head, I bet we’re going to double that in the next few years,” said Lemons, “and I still think we’re going to have a need.”

Market factors also come into play. FWHS has to support the vouchers it does have with a certain amount of money, so as rent and other costs go up, and people’s incomes go down, the agency has to spend more per unit, Mitchell said.

The agency has been able to fund about 4,800 vouchers on average this year. About 40 people leave the program each month.

Landlords who contract with the agency are guaranteed a certain amount of money every month per unit and the tenants using the vouchers have to come up with additional rent money, up to 30 percent of their income,

In slow rental times, contracts can be a good deal for landlords because they are assured of a certain amount of money per unit backed by Housing Solutions and by direct deposit.

“That’s one of our selling points to property owners,” says Mitchell, “that you’re going to get your payment from us. As long as your unit passes inspection, you’re going to get, before the fifth of the month, it’s going to be in the bank account.”

If a tenant with a housing voucher loses a job or suffers some other misfortune, the public housing part of the rent payment goes up. In the private market, there’s no way for the landlord to recoup if a tenant’s income drops, Mitchell said.

Once people are cleared for a housing voucher, they have 60 days to find a rental unit.

“Because of the tight rental market in Fort Worth and surrounding areas, most of them cannot find a unit in 60 days, so we normally extend it for another 60 days,” Mitchell said. “After that, they lose their voucher. People wait for years to get a voucher. They get it … and they don’t find a unit because of the rental market in Fort Worth.”

Las Vegas Trail

The housing authority can go in several directions to create new apartments. It can build from the ground up or it can buy existing units and renovate them.

“I think we’re open to either one. You know, what makes sense for the community. And if the deal is good for us and for the community, we’ll take a look at it,” Lemons said.

Much attention in Fort Worth is focused now on the Las Vegas Trail area, where deterioration and blight has led to increased crime rates that have triggered increasing public and political concern.

Lemons and Baggett co-chair the housing subcommittee for Las Vegas Trail set up by District 3 Councilman Brian Byrd. It’s a tough assignment, she says.

Lemons said more than 30 apartment complexes have been identified in that geographic area.

“The housing authority owns two, and we have vouchers in a number,” she said. But in the privately owned complexes, it is hard to have any real enforcement of standards of housing. There is plenty of affordable housing in the area but “we want to increase the quality of the housing there.”

“We have standards,” Lemons said. “If there’s vouchers there, obviously they have to meet certain inspection levels before we’ll even place a voucher. That’s one of the biggest misconceptions that we’ve fought, in general, all over the city. As far as affordable housing, people associate crappy apartments with Section 8.

“Generally, if somebody is receiving assistance through a voucher, it’s not the problem. It’s not the place you’re thinking of, because we won’t let people live there,” she said. It is harder to deal with apartments where there are no vouchers because there’s no real enforcement except for code-compliance though the city.

“We’re open to suggestions. It’s kind of a hard nut to crack, and so we’re going to all put our heads together and try to come up with a way to improve the quality, because, we know that people need a place to live,” Lemons said. She said her agency has looked at some properties with an eye to buy and renovate them.

“Honestly, the numbers haven’t worked for us to be able to go in and acquire them,” Lemons said.

FWHS bought and rehabbed the two complexes it owns in the area. “Ours are heads and tails above the other ones there, and they stand out. And we would do it again, if we could, but the numbers have to make sense. I mean, it’s, you know, they’re pretty tight margins.”

The Ideal

One reason for programs like RAD is that it shouldn’t be obvious simply by location where people are receiving housing assistance. Ideally, they would be in some units in apartment complexes all over the area ¬– a mix of market rate and rent assistance.

“You don’t see a difference between a RAD unit, which is the new conversion of public housing, and a market-rate unit,” Lemons said.

“Hunter Plaza is an example of a completed project that’s been converted. That’s a mix of every type of subsidy that I think you can put on a property,” she said. “There’s market-rate, project-based vouchers, tax credit and RAD all in the same building. And if you went from unit to unit, there’s no difference.

“That’s what we’re aiming to do across the city of Fort Worth – provide affordable housing for anyone, next door to someone paying market rate, and really meet the needs of the entire community in a place anybody would be proud to live,” Lemons said.

Downtown Impact

Andy Taft, who has been president of Downtown Fort Worth Inc. since 2003, says the impact on downtown and the center city of a development the size of Butler Place is “potentially monumental.”

“It’s 41 acres of land adjacent to downtown at the intersection of downtown of I-35 and I-30 and it could have a huge impact for the entire center city,” Taft said.

DFWI is Fort Worth’s downtown advocacy organization and manages the downtown planning process, two Public Improvement Districts and the downtown Tax Increment Finance District.

Whether Butler is redeveloped as a corporate campus, which would also create housing demand, or as high-density, mixed-income housing, one result would be increased demand for retail, food and entertainment downtown.

The area is somewhat isolated by interstate highways from the downtown core, but that is an issue that is easily fixed, Taft said.

The area is home to the historic I.M. Terrell High School, which opened in 1882 as Fort Worth’s first black high school and was renamed for a former principal in 1921. It closed in 1973 after Fort Worth public schools were integrated and reopened as an elementary school in 1998.

It is under redevelopment as I.M. Terrell Academy for STEM and Visual and Performing Arts. It is scheduled to open for the 2018-19 school year with a 9th grade class of 200 students, and plans are to add a class a year until it reaches 800 students.

“This will be a college preparatory high school that literally will be the envy of any high school in the region,” teaching science, arts and humanities, says Fort Worth Independent School District Superintendent Kent Scribner.

“The fact that the Fort Worth ISD is placing its flagship STEM and Visual and Performing Arts school in the center of the city as opposed to at the end of one of the compass points is a great asset to everyone in the community,” Taft said. “Obviously with all of the science and arts industry that we have in downtown and Near Southside Fort Worth, the placement of that school is especially strategic.”

Taft says that when he uses the phrase “center city,” he’s meaning a circle of a couple of miles around downtown, and there are a number of families with children within that circle. Taft says some downtown residents have told DFWI that they believe they need to move out of downtown when they start having children.

“One of the things we are trying to do – and it will happen over time – is we’re taking steps to make downtown more family friendly,” Taft said. “Schools obviously are a big part of the reason that families might be willing to stay downtown so we’re working with the Fort Worth ISD and reminding them … there are a lot of families with children there and we want to make sure that all of those schools are of the highest quality and are highly favored options.”

This article includes material from Fort Worth Business Press archives. Full disclosure: Paul K. Harral is a member of the board of the Tarrant County Housing Coalition.

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