The city is looking into the possibility of converting some public housing units overseen by the Housing Authority into Section 8 housing and potentially adding some senior housing.
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City Council awarded a $18,500 contract (AR-140-20) to The Metro Company during its July 20 combined pre-conference and regular meeting. The 90-day contract calls for the Jersey City-based firm to perform a financial feasibility study of the redevelopment of Glendenning Homes on Leesville Avenue. The 112 units are among those overseen by the Housing Authority.
“It was our initiative, we asked them [the Housing Authority] to consider it, we agreed to participate financially. That’s why we’re funding that portion,” City Administrator Robert Landolfi said during a recent telephone interview.
The Rental Assistance Demonstration (RAD) public housing program allows for converting traditional funding mechanisms to more of a Section 8 funding mechanism. “It may or may not be feasibility, we don’t want to get too far ahead of ourselves. But if it’s feasible, then we need to come up with a plan,” Landolfi said. If it is feasible, tenants may be displaced on a temporary basis but every tenant there now would have the opportunity to come back and live in a new unit. It could be that some units are vacated as some are demolished and rebuilt, or offering Section 8 vouchers to tenants to find alternative locations, he said.
“The idea would be to take all of the existing units — if feasible — tear them down and replace with new units, and have same tenants reoccupy them. That would be the ideal world. At the same time, explore idea of constructing some additional senior units,” Landolfi said. “It’s kind of a neat approach, if it works.”
The contract is for 60 days — which would put the study slated for completion by the end of September — but Landolfi said it’s not a hard time frame. “If it doesn’t work through RAD then it doesn’t work,” he said.
The conversion gives the federal government funding stability, Landolfi said, only projecting rents and not having to fund capital projects. To do that, the Housing Authority must go through engineering and feasibility studies that show it’s a candidate for that kind of conversion, with the ability to demolish and rebuild units, he said.
Housing authorities in New Jersey have converted about 57 projects including 7,535 housing units under the RAD program, with about 19,000 people shifting to the Section 8 platform.
Traditionally, the federal Department of Housing and Urban Development (HUD) enters into annual contribution contracts (ACCs), guaranteeing money to local housing authorities, according to Landolfi. The federal government provided initial funding to construct developments, paying down bonds and guaranteeing a certain level of funds to run those units. There’s also a need to do capital projects, so if a new roof is needed, for instance, the feds come up with funding. The federal Section 8 program instead provides vouchers to property owners who then rent their units. Property owners then would be responsible for the upkeep and capital projects.
The Housing Authority held a public meeting in January to talk about plans to convert Case Apartments, Kennedy Apartments, and Schaffhauser Apartments from Public Housing program to Section 8 rental assistance under the federal Rental Assistance Demonstration (RAD). A similar meeting took place in 2018 regarding Glendenning Homes, Ruby Scott Gardens, Case Apartments, Kennedy Apartments and Schaffhauser Apartments.
About $3.3 million of the Housing Authority’s $5 million in revenue in 2019 came from HUD, with another $1.3 million in tenant revenue, and $319,000 in other revenue. With $5.9 million in expenses, the authority reported an operating loss of $921,771.
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