NEW ALBANY — A 10-year public housing plan that would result in demolition of more than half of New Albany’s stock has local advocates concerned that low income residents will struggle to find alternative housing.
The plan initiated by New Albany Mayor Jeff Gahan’s administration is an attempt to leverage funds to rehabilitate decades-old buildings and decentralize pockets of government housing in a city with a disproportionately large number of units.
“We’ve tried to address this for a number of years, and we’ve known about it,” Gahan said. “I’m doing everything from a city side that I know how to do to make it a better place for residents and make sure that the public housing that we have is strong. But it will look different.”
The plan, which goes up for a board vote next Monday, calls for the demolition of Parkview Tower, Parkview Terrace/Broadmeade, Vance Courts and Riverside Terrace. That’s a total of 635 of New Albany’s roughly 1,100 units, or currently almost 1,500 people. These units would not be rebuilt.”
It also calls for rehabilitation and in some cases relocation of four other public housing complexes through HUD’s Rental Assistance Demonstration conversions, which allows housing authorities to tap into new sources of funding.
Any changes to units would need to be approved by HUD through an application process.
Housing experts worry that a reduction in units will squeeze an already tight affordable housing market in the Louisville Metropolitan Area.
“Our pool of affordable housing is short of our demand already, so if we flood that market with more people who need lower priced options, we’re going to end up with more people with housing they can’t afford,” said Melissa Fry, director of Indiana University Southeast’s Applied Research and Education Center and author of a 10-year plan to end homelessness in Southern Indiana. “I’m very concerned that this is going to potentially place more people at risk for homelessness.”
A NEW DIRECTION
After Gahan was first elected mayor, he flew to Washington D.C. to speak with officials about New Albany’s public housing, he said.
“From the very beginning when we first took office, we went down this road to improve residency for everyone, which meant bringing up the quality of life and giving people reasons to continue to make New Albany their home,” he said.
The 10-year plan was created with the help of Washington D.C.-based consultant CF Housing Group in partnership with law firm Faegre Bakers Daniels.
New Albany has the third largest number of public housing units in the state, but it’s not even in the top 20 cities in terms of population.
The city’s stock needs about $138 million in repairs. Nationwide, there’s a $26 billion backlog of housing repairs needed.
“There’s a lot of pressure there,” he said.
A passage of the plan will solidify a partnership between the city and the housing authority, consolidating resources for improvements.
It will also signal a paradigm shift that more closely mirror’s the U.S. Department of Housing and Urban Development’s changing model for public housing — fewer “brick-and-mortar” options and more affordable housing flexibility through a voucher system. Gahan believes this will position New Albany for better success when applying for tax credits and other applications.
“The changes in the national model don’t allow us to continue [as we are] for monetary reasons,” Gahan said. “In addition, we know that the model we have right now is not a good place for residents to be, and it’s not a long-term solution, so we have to make changes.”
The mayor hopes the plan will not just allow old structures to be rehabilitated — he hopes to decentralize public housing that he said is isolated from the rest of the city. Studies have shown areas of concentrated poverty tend to exacerbate social problems associated with poverty, Fry said.
“It’s kind of a silo, and that’s what we don’t want,” Gahan said. “Even the streets are disconnected. They’re outside the grid. We want the residents of the public housing authority to be a part of the city.”
Gloria Nelly has lived in Parkview Terrace since 2004. If New Albany Public Housing didn’t have an open apartment a few months after she first applied, she believes she would have been homeless. Nelly was a newly divorced mother, staying at her own mother’s house and then alternatively with friends.
She believes some public housing units need upgrades. It’s difficult for a mother of four or five to fit her family inside some of the smaller apartments, she said.
“I know things are falling apart,” Nelly said. “They’re fixing them to the best that they can.”
New Albany Redevelopment Director David Duggins believes some of the units are substandard.
“I like to look at it this way ... would these be places that if I needed to live, is that a location where I would want my family?” Duggins said. “Our first and No. 1 priority is the resident and quality of life that we provide for them.”
New Albany Housing Authority Executive Director Bob Lane said physical needs assessment are being conducted on the properties to determine their conditions.
“I really think we need an analysis of these to really make a good decision,” Lane said.
Nelly also sees benefit to dispersing low income housing throughout the city. There’s a stigma that comes with living in public housing neighborhoods, she said.
As an employee for the New Albany-Floyd County Consolidated Schools Corp., she sees an educational benefit, too.
“It would help to have more diversification in the schools because they learn from each other just like they learn from parents,” Nelly said.
Gahan didn’t fill two vacancies on the housing authority board for several months, resulting in four months of inactivity because the board didn’t have a quorum. The mayor, who is responsible for appointing all board members, left one seat open for 20 months. The other was vacated last September. He just made appointments in January and December.
“It takes a lot of time to find people that are willing to commit, willing to put the time and energy in it that have the background and that are willing to make decisions,” said Gahan, adding he didn’t realize one of the seats was open for as long as it was.
EFFECTS ON AFFORDABLE HOUSING MARKET
If New Albany uses its Community Block Development Grant money toward demolition of public housing units, it must first by law ensure all residents are provided comparable replacement housing.
Duggins said residents would be given the option to move into another public housing unit or given a Housing Choice Voucher.
Anyone with a vouchers only needs to pay 30 percent of their income in rent. The government subsidizes the rest up to a federally set fair market rent price for each community. If rent is higher than fair market value, the renter must make up the difference.
Vouchers can be used in the private rental market, though landlords aren’t required to accept them. Rental units must also pass move-in and annual inspections.
Local housing experts question whether New Albany — and the region — has enough affordable housing in the private market to handle an additional 635 households over the next 10 years.
“You’re going to tear down public housing and replace with Section 8 in a market where there’s not enough rental units, you’re basically saying ‘take your voucher and go somewhere else,’” said Cathy Hinko, executive director of Louisville’s Metro Housing Coalition. “I think that’s the message.”
In New Albany, fair market rent for a two-bedroom apartment is $817, including utilities. Average two-bedroom rent in New Albany is $723, according to online rent search engine Rent Jungle.
The hourly wage needed to afford fair market rent is $15.71, according to the Metro Housing Coalition. Forty-three percent of the Louisville area’s workforce does not earn a wage to afford fair market rent without taking on a considerable financial burden, the report also states.
As of mid-February, 37 voucher holders through the New Albany Housing Authority were searching for eligible housing, according to the authority. In 2015, 28 percent of the 73 vouchers issued through the New Albany Housing Authority expired because voucher holders were unable to find housing.
In 2016, 57 percent of Housing Choice Voucher units failed initial inspections performed that year, while 51 percent of units already approved failed annual inspections.
“We are currently, in our Section 8 program, we’re having people that it is taking them longer and longer and longer and sometimes they do not find places to live,” Lane said. “There is more demand for Section 8 housing than there is supply.”
A study issued this month by the National Low Income Housing Coalition determined the Louisville Metropolitan Area has 42 affordable and available units per 100 households at or below 30 percent of the area median income, which is $15,400 annually.
“Removing even a third of rental units from the New Albany Housing Authority stock without first replacing them would be irresponsible, actually,” Hinko said. “ ... If you have that little leeway for finding a unit and you have that big of a pool looking for rental housing, it’s pretty obvious that you’re just trying to make it harder for people to rent in New Albany.”
New Albany is instituting measures meant to open up more opportunities for affordable housing that will accept Housing Choice Vouchers, Duggins said.
The city’s recently updated comprehensive plan states any new private housing development that receives incentives from the city, such as tax breaks, would be required to set aside 8 percent of its units for voucher holders, Duggins said. The plan was passed unanimously by the city council.
The council also approved an ordinance requiring landlords to register their rental units with the city. An inspection component of the ordinance was removed by the council, but city officials hope registration of units will increase communication with property owners to prevent deterioration of homes.
“If we start now encouraging affordable development, if we work now and enforce 8 percent [reserved units for vouchers], then there are units that will be available as this goes through,” Duggins said. “It will simultaneously work together, but it is a process.”
And if voucher holders can’t find eligible housing in New Albany when the time comes?
“I think we’re happy that they would go and find any place — if it’s in the city, great, if it’s outside the city that makes them happy and gives them a quality of life that they’re looking for, I think that’s the whole concern,” Duggins said.
New Albany public housing makes up 60 percent of the units in five Southern Indiana counties, according to New Albany Planning and Zoning Department Director Scott Wood.
“Since 1937, the city of New Albany has done their fair share,” Gahan said. “We’re leading. I think there’s no question that some other communities need to up their game.”