Chapel Hill Council gets update on Public Housing operations

GOVERNMENT

By Adam Powell
Correspondent

CHAPEL HILL–In March, the Chapel Hill Town Council received an extensive update on its Public Housing operations from Sarah Viñas, Director of Affordable Housing and Community Connections, Assistant Director Ryan Campbell, and recently hired Public Housing Manager Felts Lewis.

Viñas reminded town leaders that Chapel Hill’s Public Housing Department merged with its Affordable Housing and Connections Department in April 2024 to consolidate all of its affordable housing functions.

“So, since the merger happened last spring, we’ve been working on building our team and positioning ourselves for the future,” explained Viñas. “Now is a really good time for us to provide you all with an update as our team is preparing to take some important steps to address some of the key challenges that we’re facing.”

Chapel Hill one of only two municipalities statewide in which council manages public housing

According to town staff members, Chapel Hill’s public housing program faces significant maintenance needs, funding challenges, and compliance issues. A repositioning plan is being developed to address these issues.

Viñas explained that public housing is managed by public housing authorities, or PHAs in most communities. PHAs are a standalone entity, and that was originally the case in Chapel Hill. But in the 1980s, following a rent strike and other challenges within public housing in Chapel Hill, the town decided to take control of its public housing program. At that time, Orange County took control of the local public housing voucher program, which provides subsidies to qualifying residents. Chapel Hill and Shelby are the only two North Carolina municipalities with such a structure for its public housing.

“Since that time, public housing has served as a program of the town. We’re one of just two public housing authorities in the state that have the structure of this kind that’s part of the municipal government,” said Viñas. “Shelby is the only other authority with this structure in North Carolina right now.

PHAs operate with federal funding and oversight from the U.S. Department of Housing and Urban Development (HUD). Chapel Hill’s program functions as an enterprise fund, and its funding comes from three main sources.

“We get operating subsidy from HUD to fund our operations. We also get capital funding annually (in the town budget) to support capital projects. And then we also use our rental revenue from residents to support our operations,” indicate Viñas.

Chapel Hill’s public housing program provides affordable, safe rental housing for low-income residents, as well as seniors and individuals with disabilities. It serves households that are below 80% of the town’s Area Median Income (AMI) at the time of applying for the program. HUD annually assesses the program and the local AMI to determine eligibility for local residents.

“We’re required to submit a lot of reports documenting all of our key metrics (and) data around who we’re serving, and that’s a big part of what we’re required to do as a housing authority,” explained Viñas.

The Town of Chapel Hill currently manages 296 units of public housing in 12 neighborhoods built between 1967 and 1992. There is significant local demand, as represented by the town’s sizable waiting list for available public housing. This is one of many reasons why town leaders have been so keen on approving new residential developments that specifically allot a certain percentage of their units for affordable housing.

“Our units vary in size from one to five bedrooms,” said Viñas. “We currently have 250 households on our waiting list, and that’s actually a reduced number. It was even higher. We recently cleaned our waiting list and confirmed that people that were on our waiting list truly were still in need of housing. So there’s a lot of need out there, and a lot of people that want to get into our public housing. Our units include duplexes, triplexes, townhouse-style apartments and row houses. So we have a lot of different housing types, and the majority of our units are located along transit corridors, (within) walking distance to downtown and employment centers and schools, which we’re really proud of.”

Chapel Hill’s public housing system currently houses 745 residents. The average age of residents is approximately 35. Thirty percent of residents living in local public housing aged 18 and above are employed, and the median household income is about $25,000 a year. Thirteen countries are represented and 15 languages are spoken, and nearly half of all households have a primary language other than English.

“Our residents have an average tenure in our public housing of about five and a half years,” Viñas mentioned. “And that, I think, counters a common stereotype that you often hear about generational poverty. We see a lot of turnover in residents moving out of public housing, who go on to purchase a home on the private market or to rent elsewhere in the community.”

Public housing operations facing ongoing maintenance, funding, HUD compliance issues

Viñas went into specifics about some of the challenges Chapel Hill’s public housing authority is currently facing, especially the aging and ongoing maintenance of available units, a shortfall of anticipated funding to meet annual public housing needs around town, and what she referred to as ‘long-standing’ compliance issues with HUD.

“The majority of our units were built in the 1960s and 1970s, which is far beyond the 20 years of typical useful life for public housing,” said Viñas. “For a variety of reasons, we have a long backlog of maintenance and repair needs in our units. Our major systems are beyond their useful life. This includes things like roofs, HVACs, siding, that are very expensive to replace. We’re also seeing structural issues in some of our neighborhoods, with foundations, porches and decks needing replacement.”

“Over the last several years, we’ve seen operating funding from HUD remain relatively stagnant, as has rental revenue that we collect from residents,” continued Viñas. “We’ve also seen that there’s limited federal funding available to support renovations and redevelopment through HUD. And at the same time, public housing has accumulated a substantial amount of resources. As of last March, we had $3 million in capital funding and $3.5 (million) in fund balance for our public housing enterprise fund. We have seen an increase in capital funding from HUD, which is good news so we can address more of our needs in our neighborhoods.”

In regards to HUD compliance, public housing authorities that are found to have deficiencies in the areas that HUD evaluates us on are designated as troubled. Chapel Hill’s public housing authority received a “troubled” status designation in 2018, and has continued to be considered under “troubled” status since that time. 

“When PHAs get a troubled status, we’re placed on a recovery agreement,” explained Viñas. “Our recovery agreement designates specific areas of concern that we need to work on. Things in our recovery agreement that we are charged with addressing the source of our troubled status are challenges with low rent collection, unit turnaround time, and capital spending. More specifically, we’ve been reporting to HUD regularly our progress on our recovery agreement and staying in close communication with HUD about our progress in satisfying the requirements of our agreement.”

Viñas indicated that typically, a PHA is given two years to satisfy the obligations of a recovery agreement and return to standard or high performing status. Chapel Hill’s status has been extended by HUD to allow extra time to address key issues, with modifications made to the recovery agreement.

“It’s my understanding that at the end of our first two-year recovery agreement we had not met all of the requirements of our recovery agreement, and so we were extended again as a troubled agency and a new recovery agreement was put in place,” she stated. “Since that time, we’ve remained in troubled status. That’s in part because HUD paused doing physical inspections of their units during the (COVID-19) pandemic, and they also paused rating agencies. They recently resumed that, but they ran into another challenge with the rollout of a new software system. So we have yet to receive a new physical inspection rating, and that is required for us to be able to move out of troubled status.”

Trinity Court set to reopen later this year, adding 40 public-housing units

One key component of HUD compliance for Chapel Hill is the redeployment of units at Trinity Court, which was built in 1975 but vacated in 2018 due to structural deficiencies and deterioration of buildings. That particular community played a significant role in Chapel Hill being declared “troubled” by HUD.

“So Trinity was counting as vacant units, and that’s one of the things that they (HUD) look at, is how many units and what percentage of your total units are vacant. So we were at 80% vacancy when we had Trinity on our books,” explained Viñas.

In 2020, the town began a significant overhaul of Trinity Court. According to the department’s website, In October 2022, the project received a 9% Low Income Housing Tax Credit award that will bring more than $10 million in funding to the project. The project broke ground last year, and Viñas indicated that it should open around December, adding 40 units to the town’s affordable housing stock.

“We’re very excited that Trinity Court is anticipated to open before the end of the calendar year. So stay tuned for an invite to that grand opening,” she told town leaders.

Viñas added that her department anticipates receiving a new physical inspection of its operations from HUD and should be well-positioned to move out of troubled status. “We’re addressing our maintenance needs.”

“We’re also working to spin down our existing resources, address our compliance issues, and engage residents. And finally, we need a plan for the future. Our team has been working really hard to address both the immediate and long-term backlog of maintenance needs in our units. Over the last 10 months, we’ve completed 17 major projects in all of our neighborhoods, and we’ve been hearing really positive feedback from our residents. We’re noticing that we’re putting more time and attention into maintenance of our units, and it’s making a big difference. We know we still have a long way to go.”

Additional concerns include staffing, federal funding

Along with maintenance projects, Viñas explained that the department has purchased much-needed tools and supplies for its staff, so they can do their jobs more efficiently. They are also working on filling our staff vacancies, which has been an ongoing issue contributing to longer wait times for maintenance projects to be completed around town.

“We still have a 50% vacancy rate within our maintenance mechanics, and we’re actively recruiting for those positions,” she stated. “One of the things that we have heard from our maintenance mechanics who have recently left is that they’re really happy with the town and the team culture and the department. The challenges are related to the volume and the scope of the work. It’s just too much. So addressing filling the vacancies that we have that we think will make a big difference, combined with the other efforts that we’re making. The team that we have in place is excellent, so we are working to keep them here and keep them happy.”

The department is currently in the process of developing contingency plans, given the uncertainty about federal funding.

“We’re looking at all available options, including use of existing fund balance and capital funding to sustain our operations employees,” Viñas said. “Maintaining our high level of service are our top priorities as we think about how to plan for the future. Also, given the aging condition of our units, we are also working on developing a repositioning plan for our entire portfolio that will look at options for renovation, redevelopment, and disposition of all of our properties holistically, and this will set us up to sustain our operations into the future.”

Council members ponder possibility of separate board to manage public housing in Chapel Hill

Toward the end of the March 5 work session, staff discussed the potential for a separate board for public housing operations.

“Is there a reason that we’re not kind of going in the direction that most of the municipalities in North Carolina have gone in to have a separate board?” inquired mayor Jessica Anderson. “I’m just wondering what the cost benefit is there. We’re clearly still doing it for a reason, having us (the town council) be that board. But I’m just wondering if there’s a benefit to having a focused group do that in a more targeted way, given how much Council kind of has to do.”

“I think that’s something that we could pick up and look at again,” said Viñas in response to the mayor. “I think there could be potential for hybrid options, where the town continues to play a role; but perhaps we have a separate board that’s not the council, but that the town could continue to maintain ownership and control over meetings. There have been two housing authorities recently in North Carolina that were part of municipal government and then broke away and are now a more traditional structure of this completely separate entity, but I think it may be possible (to have a different board for housing operations).”

“Our public housing is a very important trust that we have of our community members and just making sure that it is well served by the board–which it’s hard for us, as Jess was saying–with all the other things that we do,” added council member Amy Ryan. “So I’d be interested in exploring that and see if it would be feasible and actually beneficial for the program.”

“I felt that, despite (HUD) training and everything else, that we (the town council) were not–that I certainly was not–equipped to give the full attention and review that would or should be required of a board member. And so I think it’s really important to look at that (a separate board),” added council member Adam Searing.

Adam Powell has been a correspondent for The Local Reporter since 2023. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the News of Orange County, the Mebane Enterprise, the Caswell Messenger, and the ACC Sports Journal. Powell has won more than 20 North Carolina Press Association Awards throughout his journalism career for Excellence in Education Reporting, Excellence in Sports Columns and Features, and Excellence in Video Production. He has also been recognized by the North Carolina School Public Relations Association (NCSPRA) for Excellence in Education Writing and for his newsletters representing Rockingham County Schools and the North Carolina Cyber Academy. The author of four books. Adam currently resides in Mebane with his wife Julie and children Colt and Jenna. This reporter can be reached at:Information@TheLocal Reporter.press