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Archive for Sunday, June 20, 1999

PUBLIC HOUSING CONCERNS BUILD

June 20, 1999

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The pending expiration of three federal public housing contracts is causing uncertainty for 220 elderly and disabled Lawrence residents.

The future of three Lawrence public housing projects rests on a house of cards that residents fear might topple.

Nationwide, the 20-year government contracts that have set rental rates and guaranteed subsidies are expiring. If property owners don't renew, residents could be displaced and their assistance reduced.

Within the next 13 months, three Lawrence apartment buildings that house a combined 220 elderly and disabled people will be due for renewal. The first expires in September.

"There are still a lot of what-ifs associated with this," said Barbara Huppee, executive director of the Lawrence Housing Authority, the city's public housing agency. "The implication is great and grave for the community."

The housing projects are administered by the U.S. Department of Housing and Urban Development, but if the owners do not renew their contracts, the residents will become clients of the Housing Authority's tenant-based assistance program.

All 100 residents of Prairie Ridge Place, 2424 Melrose, have been "on pins and needles" wondering what will happen after the Sept. 6 contract expiration, said Elsie Avery, Prairie Ridge Place's tenant association president.

"Some of them are just scared spitless," Avery said of her neighbors, many of whom have lived at Prairie Ridge Place more than 10 years.

Diminishing returns

Tenants fear the uncertainty and expense that may accompany being issued housing vouchers if their landlord doesn't renew.

The current Section 8 project-based housing contract benefits both landlords and tenants.

Rent increases based on the area fair-market rent were included in the 20-year contract, which also required the landlord to make a profit.

Tenants paid 30 percent of their gross incomes in rent, and the remainder was covered by HUD.

If the contracts are not renewed, all the tenants will be issued Section 8 tenant-based housing vouchers, which can be used with any landlord, with some restrictions.

Peggy Hasten, a project manager with the Kansas/Missouri HUD office, said the new vouchers would follow the same rules as existing tenant-based assistance.

Under the voucher system, tenants still pay 30 percent of their income, but the housing authority will only pay up to a set amount. Any charge above that is the responsibility of the tenants.

"The amount of subsidy available with a voucher is significantly lower," Huppee, the LHA director, said.

For example if a tenant now contributes $100 to Prairie Ridge's $457 one-bedroom rent, $357 is paid by HUD. The amount paid by HUD includes a utility stipend.

Under the voucher system, the housing authority pays no more than fair-market rent for an apartment. For a one-bedroom apartment, the maximum the authority would pay is $421 per month. The only time that maximum is paid is when the tenant has no income.

For the Prairie Ridge resident now paying $100 toward rent, the voucher would pay no more than $321 for a one-bedroom apartment elsewhere. That would leave the tenant liable for the $36 extra each month.

That may not seem like much difference, but for tenants living on fixed incomes such as Social Security and disability benefits, it may mean moving.

In addition, landlords renting to tenants who have vouchers are free to raise rent at will.

"I feel safer under HUD where they have rules and regulations to follow," Avery said.

After Prairie Ridge Place, the next HUD contract to expire will be at Clinton Place, 2125 W. 23rd. Its 59 residents are worried that their landlord will decide not to renew when the HUD contract there expires in May.

The contract at Vermont Towers, 1101 Vt., will expire in July 2000, worrying another 60 tenants.

Clinton Place Tenant Assn. President Kelly Smith said many of the elderly residents of the building are worrying that they may have to pay more or move.

Smith will travel later this month to Washington, D.C., for the Save Our Homes Conference.

Complex procedures

To help tenants, owners and managers understand the implications of contract renewal, HUD has contracted with Housing and Credit Counseling Inc. of Topeka.

More than 9,000 families in Kansas are affected by these housing contracts, said Curtis Brown, grant manager for the Topeka agency.

Contract renewal is not a simple process, and HUD is offering only one-year deals in place of the 20-year contracts.

Current rules require landlords to notify HUD and tenants 120 days before expiration if they plan to turn down the contract and 90 days before if they plan to renew, said Hasten of the Kansas City HUD office.

But Prairie Ridge is already 80 days from its contract expiration, and no decision has been made. That leaves little time for the housing authority to prepare to administer 100 additional vouchers if no contract is signed.

If a complex is federally insured, the ownership must conduct a "comparable-market" study to be used in determining what rents they could charge under a new contract with HUD.

This "comparable-market rent" rule differs from the current fair-market rent rule in one important respect: It uses similar properties in the same geographic area to determine rates; the fair-market rates are based on rents within only the same city.

All three Lawrence complexes in question have rental rates above the fair-market rent.

If a complex's rates are greater than the comparable-market figure, rents can be lowered, Hasten said. "But the terms of the contract are pretty much the same as the original one."

Prairie Ridge's owner, Young Management Corp., is conducting a market study that should be completed within the next two weeks, said Kent Young of the company. That study will determine Young Management's position on re-signing with HUD.

"If the comp(arable rent) studies don't come out to the current rent, we will probably take the building on the open market," Young said.

The company, based in Kansas City, owns 19 other properties, and Young said it already had renewed with HUD for several of them.

"We've had a very good relationship with HUD over the last 20 years, and it has been very smooth lately, so I am getting very optimistic," Young said. "Prairie Ridge stands as good a chance as any complex of remaining Section 8."

-- Josh Funk's phone message number is 832-7222. His e-mail is jfunk@ljworld.com

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