As the Charlottesville Redevelopment and Housing Authority faces an uncertain future, the U.S. Department of Housing and Urban Development has asked the city authority’s counterparts in Alexandria to help it prepare for a new era.

“Let’s get real,” said Roy Priest, chief executive officer of the Alexandria Redevelopment and Housing Authority. “The government wants to get out of the low-income housing business.”

Priest and his staff met with the CRHA board and the City Council last week to explain how his agency has made the transition into an entity that supports low-income residents by creating mixed-income communities that help subsidize lower rent while also financing redevelopment.

“We have great value in our land, so what we had to do is capture the value of the land as a way to both rebuild our own housing stock to cover the economic value that comes from the transactions that we do,” Priest said.

The advice comes at a time when the CRHA is struggling to stay afloat and avoid being taken over by the federal government.

The agency’s recently adopted budget for next fiscal year is based on it selling one of the two single-family homes it owns for at least $150,000.

Revenues from HUD are decreasing, and the CHRA cannot significantly increase rent from its 376 units to make up the difference. All adult residents of a household are required to pay 30 percent of their income as rent.

Beginning June 1, the CRHA is raising the minimum rent to $35 a month and will increase the late fee from $10 to $15 if rent is not paid by the 5th of the month.

Traditionally, housing authorities have only had rental income and HUD subsidies as their main sources of revenue. Priest said public housing authorities should not only help their tenants become more self-sufficient to help increase rental income, but should also create new communities that include people paying market rate.

“At one point, HUD provided 100 percent of operating subsidies required to do public housing,” Priest said. “That is no longer the case. We’ve gone down from a dollar of operating support to 87 cents [from HUD], and the amount projected for 2016 is less than that.”

The CRHA adopted a master plan for redevelopment in August 2010. The plan is dependent on working with private developers to convert existing public housing stock into mixed-use communities. However, the plan has stalled.

“We’re struggling here just getting the ball rolling,” said Julie Jones, a CRHA commissioner. “We’ve formed the ball but we haven’t pushed it over the hill.”

The CRHA has been under increasing scrutiny from HUD, and HUD suggested city officials hear from the leader of the Alexandria organization, which is considered a “high-performing” authority.

When Priest became CEO of the ARHA eight years ago, he soon created a plan to help provide new revenue.

The ARHA created three affiliate organizations to help make that concept a reality: a development company, a property management company and a construction company.

“If you look at any private-sector major developer, not only do they build, but they manage what they build …,” Priest said. “We said we should reflect what’s happening in the
private sector.”

Alexandria residents’ rights were protected by a council resolution that ensured all affordable units would be replaced. Charlottesville has a similar provision in what it calls the Public Housing Residents’ Bill of Rights.

In Alexandria, for instance, one site with 194 units was redeveloped with 354 units and the authority was able to profit through higher revenues from market-rate sales next to subsidized ones. It also was able to finance redevelopment without borrowing.

“I have residents who are in public housing who live right next door to someone who paid $750,000 to a million for their home,” Priest said.

If HUD is not satisfied with an authority’s financial performance, it can take over in a process called “receivership” and begin to make decisions without community input.

“I never wanted to be in that place, so I’ve worked hard with my staff to become a high-performing agency,” Priest said. “You don’t want your good friend HUD to become your ugly uncle.”

One of the first phases of redevelopment in Charlottesville called for a vacant CRHA site on Levy Avenue to be developed with a 36-unit apartment complex to accommodate public housing tenants during redevelopment. That was fiercely opposed by some members of the Belmont neighborhood in early 2011 and the project has not gone forward.

Constance Dunn, executive director of the CRHA, said HUD has issued a preference for the Charlottesville agency to develop its vacant land to maximize revenue rather than support tenant relocation.

“We’ve got parcels right now with partners that are willing to come to the table,” Dunn said. “In a year from now, in my opinion, that’s not going to be the case.”

“We have two options. We redevelop in a way on our parcels that brings in alternate sources of income, or we find a way to buy a community to manage for that purpose, as well.”

Councilor Kathy Galvin said she does not believe the CRHA has the staffing capacity to handle redevelopment at this time. She suggested another agency be created.

“Another model that we’ve been talking about is a community development corporation instead of revitalizing the redevelopment arm of our authority,” Galvin said.

Officials with Alexandria’s authority, however, questioned that idea.

“You would be taking money away from your redevelopment authority,” said Connie Staudinger, chief operating officer of the ARHA’s development arm. “They were legislatively given this role and you have to sustain them regardless.”

Another option would be for the city to pay for a consultant to help update the 2010 master plan.

“We would need to know what that would look like and what it would mean,” Galvin said.

The consultant might end up being the Alexandria Redevelopment and Housing Authority. Dunn said that could help convince HUD that Charlottesville is serious about plotting a sustainable future.

Brandon Collins, an organizer with Charlottesville’s Public Housing Association of Residents, said his group is working on a strategy to promote “positive redevelopment” of public housing.

“It’s a work in progress and still not something to be made public, but if you’re moving quickly on this, we’re going to move a little bit more quickly,” Collins said. “Our goal is to be able to support something.”

But Collins said PHAR intends to make any opposition it has known, and he said he is concerned mixed-use development could lead to “forced gentrification” of the city’s public housing sites.

Toward the end of the meeting, the City Council lost a quorum, with only Galvin and Councilor Kristin Szakos still present.

“Communities that staff all public housing with nothing else there, and market-rate housing goes somewhere else, I don’t think that’s something we can negotiate,” Szakos said. “I don’t think we can finance that.”

Priest said it’s important for Charlottesville to get the dialogue going so a plan can be implemented.

“Find a way to have conversations early between partners here before anyone gets locked into a hard position that nobody can negotiate away from,” he said.