News Column

Newport News public housing renovation gets key financing

June 21, 2014

By Dave Ress, Daily Press (Newport News, Va.)



June 21--NEWPORT NEWS -- The state has said yes to the financial key that could let the Newport News Redevelopment and Housing Authority put renovation of three public housing communities on a fast track.

The move means work on renovating the first of the three -- Cypress Terrace in the Denbigh section of the city -- could start as early as next summer. Work on the authority's Brighton and Oyster Point apartments would start in 2016.

"It's going to make a huge difference," said Karen R. Wilds, the authority's executive director. "Our funding's been so limited that it's hard to do more than bits and pieces."

The key to the $25.7 million project was the state's grant this month of tax credits to the authority for the work.

Since the authority doesn't pay taxes itself -- it is a government agency -- it can sell the credits to investors seeking a tax break for themselves.

Doing so should net the authority about $13.7 million for the project.

What it would do then is something fairly new for public housing: under a new federal demonstration project, the authority is allowed to borrow for the renovation, exactly as private landlords do for their properties, Wilds said.

But since the investors' payment would account for well over half the project cost, the low rents tenants pay for public housing should be enough to cover repayment of the debt, Wilds said. Usually, private landlords borrow as much as 95 percent of renovation costs, covering that through the rents they collect, which are much higher than what the public housing tenants pay.

Borrowing money means the authority can afford to do work it can't do now, Wilds said. Currently, it has to stretch its steadily shrinking capital grant for the work -- this year's $2.5 million total is down $1 million from where the grant stood five years ago.

Wilds said the authority would do the work in stages, to avoid displacing too many people at one time. The authority plans to find places for people in the same public housing community where they now live, or if that is not possible in public housing nearby. When the apartments are renovated, current tenants would have first rights to move back.

Tenants' payments will continue to be capped at 30 percent of their income, which means rents will remain a fraction of market rents in the city.

The renovation work includes everything from new sewers and waterlines to new kitchens, bathrooms and flooring to replace three-decade old items.

The authority is still waiting for a widely expected vote in Congress to expand a pilot program allowing borrowing to renovate public housing, and would still have to line up buyers for the tax credits and a lender to finance the rest of the work.

Ress can be reached by phone at 757-247-4535.

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(c)2014 the Daily Press (Newport News, Va.)

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Source: Daily Press (Newport News, VA)


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