For some, it’s a first step to a better life. For others, it’s an enigma.
But one thing can’t be denied: The low-income apartment complex Bethel Midtown Village is quickly being surrounded by high-priced student housing, modern architecture and a growing city that will soon have a master plan for downtown development. Yet a land-use covenant and an out-of-town property management company continue to keep this 1960s enclave from moving forward with the rest of downtown Athens.
“While the city is improving around us, if we improve too—they put the (fence) up, but it’s declined a lot over the years—I would like to see the property be renovated again,” says Marissa Joyner, president of the residents’ association, who has lived in Bethel for eight years. “What they’re doing over at Pauldoe would be really beneficial, to keep it for low-income families.”
Pauldoe, or the Athens Housing Authority public housing complex off Hawthorne Avenue officially known as Jack R. Wells Homes, will soon be converted into a new mixed-income community as part of a public-private partnership. But unlike Jack R. Wells, which is owned by a government entity, Bethel is owned by the Bethel Homes Redevelopment Partnership, a for-profit limited partnership, according to the Georgia Secretary of State’s office, with an Atlanta address it shares with the property management company H.J. Russell.
While Bethel’s ownership includes ties to Athens’ Greater Bethel AME Church—the church’s former pastor, the Rev. Frank Maddox, developed the property with the church nearly 50 years ago—Bethel Midtown Village is one of dozens of low-income properties managed by subsidiaries of H.J. Russell, which incorporates federal and state low-income housing tax credits, low-interest bonds and Section 8 vouchers into its business model. H.J. Russell did not return Flagpole‘s repeated requests for comment.
Potential Is There
Bethel is a key component as downtown Athens moves forward, says Jack Crowley, the University of Georgia College of Environment and Design professor leading a team that is creating a master plan for downtown. Affordable housing is essential as multimillion-dollar apartment complexes spring up along the eastern fringe of downtown, charging $600 per bedroom for apartments that come with amenities like pools, cafes and gyms. To the west, residential Pulaski Street has seen an uptick in new development, mixing modern architecture with historic homes. Now that blue laws standing in the way of a downtown grocery store are gone, options for downtown living will open up even more.
Photo Credit: Kristen Morales
Quabarion Brightwell (left) and Tra’aya Lawrence at the Bethel Midtown Village playground. Parents say upgrading it is just one of the many improvements needed in the low-income neighborhood.
But affordable housing, like what Bethel provides, is an essential part of the equation.
“Ironically, one of the challenges for the downtown plan is the provision of a diverse housing stock both in demographics and in affordability,” says Crowley, noting that the perception of crime and Bethel’s location may cause potential developers nearby to shy away.
“As the downtown develops over the next 20 years—and it definitely will—development and land prices will climb,” he says. “Providing affordable housing, particularly for a large arts, music and service industry, will require more creativity in financial incentives.”
Joyner notes that many Bethel residents work low-wage jobs at the University of Georgia, allowing them the ability to walk to work. But their hourly wages keep them from moving elsewhere. Another significant percentage of the residents are elderly, already living on fixed incomes.
Of the 190 apartments in the complex, Bethel’s Residential Services Director Christine Burgin says about 90 percent of them are rented at any time. Many of the apartments are rented with Section 8 vouchers, which let tenants pay based on a percentage of their income, and the vouchers cover the rest. This means a one-bedroom apartment rents for no more than $558, $608 for a two-bedroom and $761 for a three-bedroom. Joseph Phillips, spokesman for the U.S. Department of Housing and Urban Development’s Atlanta office, says Bethel’s management applied for and received a 1.4 percent increase in rental rates in November 2012. In addition, per Section 8 voucher requirements, there is a HUD utility allowance for each apartment ranging from $143-$255, which is paid along with the Section 8 subsidy.
Keeping the need for low-income housing in mind, the Rev. James Lawson of Greater Bethel AME Church, who also serves as president of the Bethel Homes Redevelopment Partnership, says there is room in the future for improvements.
“I see Bethel as playing a major role as far as employees are concerned,” he says. “We see the housing community there as an opportunity to coexist with businesses and possibly, possibly, add some businesses on site… We have been working on getting the crime down and beautifying it and having an additional playground… in the not-too-distant future.”
Lawson also says Bethel is working with an H.J. Russell-owned security company to evaluate the property and determine if any additional security features should be put in place, such as additional cameras. Joyner and other residents contend the one-armed gate, installed several years ago along with a perimeter fence to keep crime down, isn’t very cost effective, since it’s often broken. While an H.J. Russell representative at a recent meeting said the property had received HUD funding for additional security, HUD’s Phillips says his department is not supplying any additional funding.
“The owner built the additional costs into the property’s operating budget,” he says.
What’s Holding It Back
Despite any efforts to change the property, there is one quiet obstacle that stands in the way: a covenant, tied to the use of the property, states that any changes must first be approved by HUD. According to the document, on file with Athens-Clarke County, the owners of the property “shall not… remodel, add to, reconstruct or demolish any part of the mortgaged property.” The contract, which is part of the original HUD-approved loan given to properties that agree to house low-income tenants, also states that businesses cannot be located on the property.
There also is the question of how much H.J. Russell wants change. Accepting Section 8 vouchers allows a steady stream of government-backed minimum rent payments each month—to the tune of at least $112,000 per month, based on the rent for a one-bedroom apartment and not accounting for utilities. The property also is eligible for low-interest bonds and a 4 percent tax credit, all in exchange for providing low-income housing. H.J. Russell took out a $5.9 million low-interest bond through the Athens Housing Authority in 2001 and repaid it as of December 2012. H.J. Russell also received an additional HUD loan for the property in 2001 for nearly $3 million for improvements to the property, according to HUD documents on file with Athens-Clarke County.
Then there is the issue of tax credits, which are sold often to Fortune 500 companies for 80 cents on the dollar, according to Fenice Taylor, an analyst with the state Department of Community Affairs who oversees low-income housing tax credits.
In Bethel’s case, Taylor says, as long as the property complies with the standards set in the property’s covenant, the owner can receive the tax credits along with Section 8 vouchers and low-interest bonds.
“The bond is the debt financing; low-income housing tax credits were sold to investors, and their investment is in the form of equity,” she says. By selling the tax credits, Taylor says, the investing company “gets one dollar of credits and they will pay 80 cents on the project.”
“Usually it’s a big corporation” that purchases the tax credits, she says, adding that Georgia matches federal tax credits dollar-for-dollar. Because the tax records were stored in an off-site location, Taylor was not able to say how much H.J. Russell has received for the sale of its tax credits.
Lawson says his church, which has a stake in the ownership of the property, does not see any money from the sale of tax credits, and he wasn’t aware of the opportunity to sell them.
Looking for a Leader
At a recent meeting of the Bethel Stakeholders Committee—a group of residents, property managers, school district employees, social workers and others in the community who want to see Bethel stay on a positive track—many of the problems brought up by residents and others led back to the property management. Representatives from the Athens Housing Authority-owned Nellie B neighborhood spoke about ways they have worked with AHA to keep the neighborhood clean, encourage residents to take pride in their apartments and keep moving forward with their lives. That community holds weekly meetings to help with job searches and other community service initiatives.
“We said we wanted a change—we wanted a clean, quiet, safe neighborhood—and we got that,” says Nellie B resident Reita Hannah. “It’s up to the residents to make the change you want to have.”
Lawson notes that crime has dropped in the neighborhood, and when there is trouble, often the people causing it aren’t residents. But at the stakeholders meeting he also noted the importance of the management to enforce the rules. If a resident “violate(s) the rules, (then) you terminate the lease,” he says. “So I say this to the management, we have a community meeting and reinforce the fact that these are the requirements. I’m proud of the fact that we’re 92 percent, 93 percent occupied, but we are the ones that have to make it better.”
Ovita Thornton, a Clarke County School Board member who is advising the Bethel stakeholders through her work with the Georgia Clients Council, says Bethel now stands at a crossroads. “Management, the Bethel board and the residents of Bethel—these three stakeholders need to have a serious conversation,” she says. “I think management needs to work out what’s best for the future of Bethel.”
And for the time being, the stakeholders are focusing small—the playground at Bethel, for example, is small and in need of an update. Joyner says while there are some residents who won’t let their kids play outside, she refuses to subscribe to that level of fear. So, for now, her 3- and 8-year-olds make do on the parched playscape, or the family makes the trek across busy College Avenue to Lay Park.
Joyner says the neighborhood watch program is starting back up, and she has organized a summer program for the kids who live there. “The crime over here has dropped; it’s not going to be world peace, but it’s gotten better,” she says. “We’re not asking for every resident to be involved (in the neighborhood), but I’d like to see a lot more parents.”
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