One of the new units at Hunter Plaza in downtown Fort Worth. Fort Worth Housing Authority Handout
It has been five years since an infestation of bedbugs took over Hunter Plaza, forcing the high-rise’s closure and sending 200-plus elderly and public housing residents to find a new place to live.
Now Hunter Plaza, which sits on a piece of prime real estate in downtown Fort Worth, is undergoing a $29 million makeover that will transform the 11-story building into a mix of public housing and regular rental units for the Fort Worth Housing Authority.
Of the 114 one-bedroom and 50 two-bedroom apartments, only 25 will be public housing; the other market-value units will be a source of revenue for the housting authority.
The transformation of Hunter Plaza is a far cry from Fort Worth’s Butler Place and Cavile Place, sprawling red-brick complexes that are classic examples of 1940s-era public housing — where the city’s lowest-income families were grouped and isolated in apartments. Over the years those complexes have struggled to be maintained as as the federal money for repairs and revitalization continues to shrink.
Naomi Byrne, the new president of the Fort Worth Housing Authority, hopes that a new federal program being used to rebuild Hunter Plaza will help take public housing into the 21st century.
The Rental Assistance Demonstration (RAD) transfers ownership of public housing units from the federal government to the local housing authority and allows the housing authority to take out loans on those properties to do with them what it wants, including moving some of the public housing units to other apartment complexes across the city.
If the applications are approved for Butler and Caville, Byrne said it could herald the end of public housing as we know it.
“I don’t know if Congress and HUD are going to be able to keep up with the needs of public housing, but I also don’t know if they are bold enough to step out of the box and say, ‘Public housing as we know it needs to be fixed,’” Byrne said.
Eboni Parker, who lives in Cavile Place with her 2-year-old son, hopes the units there are converted to RAD. She thinks it will help revitalize the entire neighborhood.
“I think it is a good idea, so hopefully the application is approved,” Parker said. “I have a 2-year-old son and I don’t let him go outside. I don’t want him to be around this.”
Deborah Woods, who has lived in Cavile for 27 years, said she thinks the program will “make it better for the low income, so they can strive and do better.”
Like public housing stock nationwide — which has an estimated $26 billion backlog of capital needs for 1.2 million units — Butler (built in 1941) and Cavile Place (built in 1954) are in need of major makeovers.
Cavile Place, for example, will need $24.3 million in repairs and upgrades to remain viable through 2034, according to a needs assessment done by the Fort Worth Housing Authority.
And a revitalization plan for Cavile calls for the demolition of the complex, rebuilding some of the public housing on-site and dispersing the rest. That plan estimates that the rebuilding of Cavile would cost $57 million and does not include money for land acquisition and other parts of a master plan for the community, according to the housing authority.
The housing authority, however, doesn’t have the money for necessary repairs, much less community revitalization, and isn’t likely to get all it needs from the Department of Housing and Urban Development, which has been cutting local housing authorities’ budgets since 2002.
That’s where RAD could help.
The program started out as a pilot with 60,000 of the nation’s 1.2 million public housing units being switched to RAD. Of those, Fort Worth was able to switch 230 of its public housing units — including those at Hunter Plaza — to RAD in 2013.
Typically, public housing belongs to the federal government, and housing authorities must get federal permission before they can demolish structures, do major makeovers or even apply for tax credits to get more revenue. Federal ownership also means local housing authorities cannot take out loans against the public housing buildings.
The RAD program transfers ownership to the local authority.
At Hunter Plaza, for example, the housing authority took out $18.6 million in loans and state and federal tax credits to pay for the remodel, which began in November. The non-public housing units in Hunter are expected to generate revenue and help pay off the loan.
One-bedroom apartments at Hunter will rent for $714 to $924 per month, and two-bedrooms will go for $999 to $1,300.
While 25 public housing units will remain at Hunter, its 194 other public housing units will be relocated to other mixed-income apartments across the city, including Sedona Village, the Reserve at Western Center, the Reserve at McAlister and the Avondale Apartments.
Fair Oaks, on Quail Trail in northwest Fort Worth near River Oaks, has already received a $2.37 million makeover as a RAD property. The project was funded partly with a $1.7 million loan from Bank of Oklahoma, money that would have not been available without RAD.
Risk of privatization
While popular with public housing reformers, the federal program is not without criticism, having sparked protests in cities like Baltimore and backlash from congressional representatives, who say RAD is a “privatization” scheme, leaving public housing at risk of disappearing altogether.
Byrne said the private equity that makes the renovations and revitalization possible is not fail safe.
“You don’t have any 100 percent guarantees,” Byrne said. “It is like if you go out and buy a house today and you are guaranteeing it with the income you have and you pay your mortgage, there is no guarantee that tomorrow you will have a job and can pay your mortgage.”
Still, she said, the risk of defaulting on the loans is minimal.
“The housing authority has years and years of experience in development and management of properties. … We understand market conditions, and when we go out and borrow funds, we do so very conservatively,” Byrne said.
In Baltimore, residents took to the streets in 2014 to protest the program, with signs that read “Rethink RAD” and “A RAD-ical experiment,” according to local news reports.
Don Babers, a native of east Fort Worth and known for rebuilding and revitalizing public housing in New Orleans after Hurricane Katrina, said that with federal money being hard to get, RAD “opens up some new opportunities.”
But Babers, former regional administrator for HUD in charge of Texas, New Mexico, Oklahoma, Arkansas and Louisiana, cautioned officials to pick capable developers and borrow conservatively.
“Because you are leveraging and borrowing against that property, you have got to be sure the developers are seasoned and have a good background in terms of what they are going to do,” Babers said. “You have to have good partners.”
Push for RAD
In 2001, Congress was funding local housing authority’s budgets at 100 percent of their requested needs, but by 2013, housing authorities were only getting about 82 percent of their requested budget, according to the Council of Large Public Housing Authorities.
As a result, the public housing inventory has been losing an average of 10,000 units annually through demolitions and dispositions.
HUD Secretary Julian Castro toured Fort Worth’s converted RAD apartments at Fair Oaks in November 2014 and urged Congress to lift the cap on the number of units that can be switched from being federally subsidized to the private sector.
“The challenge we have out there right now is every year about 10,000 public housing units fall into disrepair and we actually have a backlog of about $26 billion worth of improvements that need to be made to public housing,” Castro said.
“There is no way if we wait for funding to come forward that all those improvements can be made.”
The pilot program was expanded in the 2015 federal budget to 180,000 units nationwide.
If Fort Worth’s applications are approved, Byrne said, the redevelopment projects would start in three years. Residents in public housing would get a housing voucher during rehabilitation or rebuilding of projects.
The program is also supposed to make dispersing public housing across the community, like with Hunter Plaza, easier. Besides making the projects more financially viable, mixing public housing with market-rate units is also good for the residents, Byrne said.
“The general consensus nowadays is that rather than segregating people of lower incomes, like at Butler where they are on an island away from everyone, mix them in so that you can’t tell someone is in a public housing unit, a market-rate unit or a tax credit unit,” Byrne said.