Providence City Council members entertained a discussion on Monday night that could result in the forty unit Greenbrier Apartment Complex on Willow Street being transitioned into federally subsidized Section 8 low income housing.
Speaking on behalf of Hayes Gibson Property Services, Carson Hayes explained to the city that his Bloomington, IN-based company had acted as the property management firm for Greenbrier for the last several years, working on behalf of the Estate of Carl Love.
“The estate is winding down,” Hayes reported. “Now we’ve found ourselves with this property and would like to look at what can be done with it.”
He explained to the council that there was a process known as corporate tax credits that would allow the property to be upgraded and modernized, while transferring ownership from Hayes Gibson Property Services to the Providence Housing Authority (HA), which currently oversees the Section 8 Westview Apartments.
Corporate tax credits are economic development subsidies that reduce a company’s taxes by allowing it to deduct all or part of certain expenses from its income tax bill.
Hayes explained that if his company and the Housing Authority entered into an agreement, they could work through a syndicator to sell tax credits on the apartment complex.
“Tax credits are promulgate through the Kentucky Housing Corporation,” said Hayes. “For every dollar of tax credits that are awarded, you have businesses that buy that up that have tax liability. They buy that up for less than every dollar.”
He said that tax credits often sell for around ninety cents on the dollar. So if a corporate entity buys $2 million worth of tax credits for the apartment complex, that would mean a $1.8 million investment to Greenbrier.
“If we have a $2 million project, that is a $2 million investment in this community,” Hayes said.
Those funds would be used to make repairs and upgrades to the buildings, install energy efficient appliances and windows and modernize the entire facility.
He further explained that the tax credit program would require his company to partner with the Housing Authority for a period of 15 years, during which the HA would act as the managing partner. At the end of that period, the HA could either take sole ownership of the property or extend the partnership longer.
Currently, Hayes said, the Greenbrier Apartment complex is not Section 8 housing, meaning residents do not qualify for federal housing assistance money, but rent on the facility is below the “fair market” rate required to become federally subsidized.
Under the proposal, the only required change would be that the HA would take over as property managers, and the apartments would officially become low income housing. Rent in Section 8 housing is generally 30% of your adjust gross income, with HUD paying the difference between that number and the actual price of rent.
What this change would mean to current residents of the apartment complex was not discussed at Monday’s meeting, and HA director Frank Skinner departed the meeting before its conclusion.
“It is not our intension to force the current residents out, but rather to improve their living conditions,” Skinner said via email. “Continuing to house the current residents would be the highest of priorities. One solution would be for the Housing Authority to grandfather those over income households in. There are income limits for both Section 8 and Pubic Housing, but these limits are structured for lower income households.”
Under federal law, housing authorities overseeing Section 8 housing are not allowed to evict current residents if their income exceeds the limits to qualify for low-income housing. The law does, however, allow such management companies to set income restrictions on new tenants looking to move into a complex.
The Greebrier facility has 40 apartments, all either one or two bedroom units. Of those, 30 are currently rented.
Westview Apartments, the HA’s other Section 8 housing facility, is currently at 98% occupancy.
The final decision on whether or not to make the transition will lie with the Housing Authority Board.
In other businesses, the council approved the police department to spend $49,069 in alcohol tax dollars to purchase a new 2021 Dodge Durango with a police package. The purchase will be made through the state contract, meaning the city does not have to seek bids on the vehicle, although police chief Todd Jones reported that he had gone ahead and gotten quotes from dealers not on the state contract.
Contact Matt Hughes at firstname.lastname@example.org or 270-667-2069