For the second time in a generation, government-subsidized housing in Memphis is undergoing a massive and expensive transformation — and public housing residents are again being “temporarily relocated” to make way for change.
For Rita Franklin, the news came as a form letter on Sept. 10 — one of hundreds that have been sent to people in her position.
“I love it here,” Franklin, said. “We look out for each other. We don’t have no break-ins or shootings here. I feel safe here. That letter really upset me.”
The letter, from the Memphis Housing Authority, was a “notice of intent to acquire” and is part of the Department of Housing and Urban Development’s Rental Assistance Demonstration program, also known as “RAD.”
Franklin would be relocated from three to nine months, but that period could stretch to a year or more.
In a nutshell, the program takes publicly owned housing and sells it on the private market to developers who upgrade the units and convert them to “Section 8” apartments, where the government and residents each pay a share of the rent.
“You can’t call it public housing anymore,” said Dexter Washington, who became CEO of the Memphis Housing Authority last fall. “It’s still government-assisted housing. We still own the ground, but the buildings will be owned and managed by another entity. That’s not traditionally how public housing has been done.”
History repeats itself?
The property Franklin currently occupies is a three-bedroom house in Uptown. She moved there with her two granddaughters in 2006.
RAD, the centerpiece of the Obama administration’s plan to remake public housing, was authorized by Congress in 2012. The Memphis Housing Authority launched its own RAD program late last year.
“They talked about this RAD program back in 2018,” said Franklin, 68, who still works part-time at a nearby grocery, “but I didn’t hear anything else about it ’til I got that letter.”
Since RAD began, thousands of older and newer public housing units across the country have been repaired, renovated and converted to privately operated Section 8 voucher properties. In the process, tens of thousands of public housing residents have been “temporarily relocated.”
This is history repeating itself. Franklin’s house was one of 106 single-family public housing units built in Uptown under the Urban Revitalization Demonstration. Later renamed HOPE VI, it was the centerpiece of the Clinton administration’s plan to remake public housing.
Starting in the late 1990s, thousands of aging, run-down, crime-ridden public housing units in Memphis were demolished to make way for new “mixed-income” communities that included some subsidized properties. Hurt Village was torn down to make way for Uptown.
In the process, thousands of public housing residents were “temporarily relocated” with Section 8 vouchers to run-down, crime-ridden areas of North and South Memphis, Frayser, Raleigh and Hickory Hill. A majority of them did not return to the new developments.
Franklin lived in Raleigh until she moved to Uptown. She planted a small garden with okra, peas and tomatoes. A neighbor helped her plant a fig tree in the backyard.
“My granddaughters are grown and gone now, but they still come to visit,” Franklin said. “They love my fig pies.”
Living out of boxes
“Under Notice to Acquire Memphis Housing Authority will be selling the property to a limited partnership to facilitate private capital and investment in the property. You do not need to move now. However, you and your family will be required to move on or before Nov. 7, 2021.”
Franklin, who suffers from rheumatoid arthritis, started packing after she read the letter. She has been packed since Nov. 6. Her living and dining rooms are stacked with boxes. She said she’s still waiting to hear about her relocation assistance.
“They give you a number to call but you just get a machine,” Franklin said. “This is rough on me. This is working on my mind. I’m living out of boxes.”
Washington says the RAD process will be easier on residents than HOPE VI was. RAD residents will be given all the assistance they need to move, he said. They will be relocated only for a few months, and nearly all will be allowed to return to their renovated units.
“MHA has done a lot of developments, but we’ve never done this before,” Washington said. “We’re learning as we go through this. There will be some confusion, but this will be good for everyone, especially the residents.”
On Nov. 17, Franklin received another official form letter that said she will be required to move on or before Jan. 3, 2022.
“I’m still here,” Franklin said Friday, Feb. 4. “I still don’t know where I’m going or when.”
Major transformation
The U.S. government went into the public housing business in the 1930s.
The goal was to address the housing shortage for working-class families leveled by the Depression.
“Many millions of Americans still live in habitations which not only fail to provide the physical benefits of modern civilization but breed disease and impair the health of future generations,” President Franklin Roosevelt said in his 1937 State of the Union address.
A few months later, Roosevelt signed the Housing Act of 1937. The federal government would loan local housing authorities funds to cover 90 percent of the cost of building low-income — and segregated — housing.
Loans were to be repaid by rental income. Tenants were required to pay half the rent, government covered the other half. Local housing authorities would have to rely on annual allocations by Congress for maintenance and repair funds.
The Memphis Housing Authority was the nation’s second local housing authority.
From 1938-1960, MHA built 11 housing projects. Those included Lauderdale Courts, Lamar Terrace and Hurt Village for white residents; Dixie Homes, Lemoyne Gardens, Foote Homes and Cleaborn Homes for black residents.
Elvis Presley lived in Lauderdale Courts as a teenager from 1949-1953 — a fact that saved that public housing development from a bulldozer 25 years.
Segregation in public housing officially ended with the 1968 Fair Housing Act, but decades of redlining, suburban sprawl, and inner-city withdrawal effectively re-segregated it by race and class.
“The projects became projects for poor people, not for working-class people,” scholar Richard Rothstein wrote in “The Color of Law,” a history of housing segregation in America. “And so they became slums that we came to associate with public housing.”
Moratorium, then cuts
In the early 1970s, MHA built 14 more, smaller housing projects, including four high-rises for low-income seniors.
In 1973, President Nixon declared a moratorium on all new public housing, except for senior citizens. He shifted more funding to newly created Section 8 vouchers. Low-income residents use the vouchers to rent privately owned housing.
During the Reagan administration in the 1980s, federal funding for conventional public housing was reduced by 75 percent.
By the mid-1990s, 22 percent of MHA’s public housing units were vacant or boarded up. Most of the remaining units were “functionally obsolete.”
In 1996, HUD approved MHA’s plan to demolish more than 1,000 of the more than 7,000 public housing units in Memphis.
The demolition would have included 400 units in Foote Homes, 400 in LeMoyne Gardens, 214 in Hurt Village, and all 218 units in Lauderdale Courts. There were no plans to replace them.
“I think we all agree that tearing down older units and density reduction is a good thing,” Ricky Wilkins, MHA’s board chairman, said at the time.
The next year, a HUD audit reported that MHA had wasted hundreds of thousands of dollars with dubious hiring, excessive travel, poor financial accounting, inadequate maintenance, and possible fraud. HUD threatened to take over the agency.
“MHA is not fulfilling its primary mission of providing decent, safe and sanitary housing for low-income families,” the HUD audit said. “MHA’s housing stock and grounds are in poor conditions due to age, lack of maintenance, and ineffective use of modernization funds, and have been for many years.”
Mayor Willie Herenton stepped in. He overhauled the agency’s board and leadership. He merged MHA with the city’s Division of Housing and Community Development. He put Robert Lipscomb in charge of both.
Herenton also delayed demolition plans “until a comprehensive plan is in place to ensure that decent, safe, affordable housing will be made available on a permanent basis to those families being displaced.”
That planned turned out to be HOPE VI.
Hope for Hope VI
The federal HOPE VI program, launched in 1992, was the most ambitious, expensive and controversial urban redevelopment program in U.S. history.
“A central premise of HOPE VI — and of the broader public housing transformation effort that began in the 1990s—was that the overconcentration of profoundly poor, nonworking households was a major contributor to the high levels of social problems in distressed public housing,” the Urban Institute explained in 2004.
“Thus, to improve the lives of public housing residents, policymakers placed increasing priority on the need to deconcentrate poverty, through two complimentary strategies: (1) helping them relocate to better neighborhoods and (2) creating healthier, mixed-income communities in place of the distressed public housing developments.”
From 1992-2010, the federal government issued more than $6 billion in HOPE VI grants. Hundreds of housing projects were razed. Hundreds of more livable, less affordable “mixed-income communities” rose in their place.
In the process, tens of thousands of low-income public housing residents were “relocated” to other low-income neighborhoods with Section 8 vouchers.
Laws and rules were changed to expedite relocation.
Housing authorities were allowed to evict tenants with criminal backgrounds, credit problems or unpaid utility bills, and to prevent them from returning to the new developments.
Private landlords were allowed to accept some, but not all, Section 8 vouchers.
“The program reflected a new view, that cities were centers of opportunity, not just massive shelters for the poor,” former Baltimore Mayor Kurt Schmoke, an early advocate, wrote in his 2009 introduction to “From Despair to Hope.”
HOPE VI demolished more than 96,000 “shelters for the poor” and produced 107,800 new or renovated housing units. Only 56,800 of the new units were made available to the lowest-income households.
‘Mixed income’ developments
Memphis was awarded five HOPE VI grants totaling nearly $140 million. Those funds leveraged nearly half-a-billion dollars in total public and private funding. That included more than $60 million from the City of Memphis.
The new “mixed-income” developments in and near Downtown generated billions more in private investments by St. Jude Children’s Research Hospital, LeBonheur Children’s Hospital, LeMoyne-Owen College, and other organizations.
They also eliminated more than half of MHA’s public housing units.
LeMoyne Gardens housing project near LeMoyne-Owen College was bulldozed to make way for College Park in 2005.
Hurt Village and sections of the Greenlaw neighborhood on the north side of Downtown were demolished to make room for Uptown in 2007.
Lamar Terrace at I-240 and Lamar became University Place in 2009. Dixie Homes on Poplar near LeBonheur became Legends Park in 2013. Cleaborn Homes south of Downtown became Cleaborn Pointe at Heritage Landing in 2015.
Foote Homes, the city’s last housing project, was demolished in 2017. It’s being replaced by a $150 million “mixed-income” development called South City, which was seeded by a $30 million Choice Neighborhoods federal grant. The City of Memphis has invested another $32 million in that development.
Since 1996, about 4,000 local public housing units have been razed, and about 2,500 residents have been relocated.
Two in three residents moved to privately-owned Section 8 rental properties in other neighborhoods. Only about 20 percent of the displaced residents returned to the new “mixed-income” developments.
“HOPE VI has proven to be less about improving conditions for previous residents and more about reclaiming urban neighborhoods for middle-income families,” concluded a 2016 study by the Rhodes College Institute for Regional Studies.
The study found that most relocated residents faced higher rents and utility bills, fewer public transportation and social service options, and less responsive landlords.
“Although redevelopment did succeed in reducing poverty (and crime) at the redevelopment sites themselves, it did not actually solve the issue of concentrated poverty,” the study concluded.
“The displaced public housing families re-concentrated in other poor neighborhoods nearby usually because these neighborhoods were the only places where they could find Section 8 housing and landlords who were willing to rent to them.”
A ‘misstep on our part’
MHA’s Dexter Washington knows the RAD program has caused much anxiety and confusion.
“Everyone got the same RAD form letter, and that was a misstep on our part,” said Washington, who was promoted to chief executive officer last September. He had served as chief operating officer since 2018. “We should have taken the time to deliver the letters personally so we could explain and answer questions.”
Washington also understands concerns that residents who are “temporarily relocated” by the RAD program will become permanently relocated elsewhere.
“RAD is very different from HOPE VI,” Washington said. “The RAD renovations will take months. The construction of the new HOPE VI projects took years and years. Some residents didn’t qualify to return, but many of the people who had been relocated chose not to return. They had reset their lives where they were.”
Washington joined the agency in 2001. His assignments included the HOPE VI transformation of Lamar Terrace into University Place.
Lamar Terrace had 472 public housing units, but only 145 were occupied before it was demolished in 2005. University Place’s nearly 400 mixed-income units include 145 for low-income residents.
“People talk about how gentrified all the HOPE VI developments seem, but we ended up with the same number of available public housing slots as we had when it began,” Washington said.
A shrinking agency
Washington oversees a steadily and dramatically shrinking government agency.
In the early 1990s, before HOPE VI, the Memphis Housing Authority employed about 400 people. Today, it has about 30 employees.
MHA has been downsizing, restructuring its portfolio, and moving away from conventional public housing for a quarter century.
“We only have a few more sites to go before we can eliminate the words ‘public housing’ from our vocabulary. Wouldn’t that be great?” Robert Lipscomb, former MHA executive director, said in 2009.
More than a decade later, MHA still has a few more sites to go.
Before HOPE VI, the agency owned and managed 25 densely populated and rapidly aging housing projects with 7,000 units and about 30,000 low-income residents.
Today, the agency owns and manages about 2,200 units at seven conventional public housing properties. That includes the four high-rise senior towers.
Another 25 sites, including all HOPE VI sites, are privately managed and owned by limited liability companies.
The RAD program will complete the transformation. RAD-converted properties are no longer considered public housing. They are not quite private housing.
Instead, they become social housing: Low-income housing owned by a nonprofit or limited partnership, managed by a private company, and still overseen by MHA and HUD via Section 8 vouchers and other assisted-housing rules and regulations.
A new nonprofit
The RAD conversions began last year when MHA formed a new nonprofit affiliate called Memphis Housing Strategies.
The new nonprofit formed a new limited partnership with a private development company called BGC Advantage LLC, based in Louisiana.
In December, MHA sold three of its public housing properties to the new partnership.
The 106 single-family homes in Uptown, and 25 other rental homes at Askew Park, were sold for $2,905,000. The total redevelopment cost is $20.3 million.
The 341 public housing apartments at College Park were sold for $10,710,000. The total redevelopment cost is $50 million.
Proceeds from the two sales were used to help finance the $70 million in repairs and renovations for the three properties. “MHA didn’t realize any cash from those deals,” Washington said.
BGC now owns 51% of the three local RAD properties, and Memphis Housing Strategies owns 49%. The converted properties will be managed by Orion Real Estate Services based in Texas.
Under terms of the RAD conversion process, the properties must remain “affordable” and open to residents with Section 8 vouchers for a period of 15 years.
If the partners ever decide to sell the property, or dissolve the partnership, MHA has the right to buy the property back.
Better maintenance?
Washington said the new ownership structure solves the maintenance backlog problem.
MHA doesn’t get enough direct federal funding to maintain existing public housing properties. And MHA can’t borrow money to maintain the properties, because the federal government holds liens on the properties.
RAD allows the new limited partnership to borrow money to repair, improve and maintain the properties. The private co-owners get tax breaks and very low-interest loans that are repaid with future government-assisted rent payments.
“It’s sort of like a home equity loan,” Washington said. “You can get a loan based on the value of the property, increase the value of the property, and pay it back over time.”
Since RAD was launched in 2012, more than $10 billion in private financing has been invested in public housing nationally.
MHA hopes the new process will raise $230 million in private financing for repairs and renovations here.
Dr. Laura Harris, a professor at the University of Tennessee Health Science Center, a former MHA board member, said RAD brings reward and risk.
“Since operating funds for traditional public housing continue to be cut, converting to RAD is the main way housing authorities can access capital to do needed repairs and upgrades,” said Harris, who was lead investigator of the HOPE VI grants for Lamar Terrace and Dixie Homes. “But if not well managed, I would think there might be long-term concerns.”
There are indeed long-term concerns. Public housing advocates say the RAD rules and regulations are vague and poorly monitored by HUD.
A 2018 report by the Government Accountability Office (GAO) found that some RAD residents had been evicted without notice, and others had seen rents rise.
HUD “failed to comprehensively monitor RAD residents’ rights,” the report said.
“RAD has rules about the rights of tenants, how they should be notified about a potential conversion, their right to return to a property that has converted, and what should happen if they decide to relocate,” the National Housing Institute reported in 2021.
“But what we see is that … evictions have soared. People have still made complaints around the quality of the repairs. People were supposed to be allowed back into their homes, but they weren’t in some cases. There were rent increases. Local enforcement and education of these rights is especially critical.”
Better this time?
Washington said MHA’s RAD program has the benefit of nearly a decade of experiences elsewhere.
“We’ve seen where there have been problems or issues, and we’re going to make sure that MHA stays connected to all of these residents and properties,” said Washington.
Washington also said the relocation process here will be more deliberate.
So far, only about 150 households have been relocated—most of them from College Park.
MHA doesn’t plan to relocate the next 150 until the first group has returned to the renovated properties.
“The rental market is very tight right now, so it’s not easy to find a place for everyone who needs to be relocated,” Washington said. “We’re going to take this slowly and make sure everyone has a place to go and can return as quickly as possible.”
Meanwhile, RAD conversions will continue. The four high-rises — Jefferson Square, Venson Center, Barry Home, and Borda Towers — will be sold this year. MHA also plans to sell its three other properties — 100 units at Montgomery Plaza in South Memphis, 40 units at G.E. Patterson Pointe (the former Fowler Homes), 42 units at Kefauver Terrace in Arlington.
“At some point, the number of public housing units we own will go down to zero, but we still will be responsible for thousands of residents at various properties” Washington said. “The public housing landscape has changed dramatically, for good, and for the better.”
As for those being relocated, there may be some disagreement there.
Last October, Georgia Anna King moved from Jefferson Square, an MHA high-rise on Adams, to Venson Center, an MHA high-rise on Beale.
Both towers are still being repaired for damages inflicted by the severe winter storms of February 2021.
MHA plans to convert the high-rises to RAD properties later this year. Meanwhile, all four high-rises are dependent on regular HUD funding — and timing — for repairs and maintenance.
The 81-year-old had lived at Jefferson Square for nearly 20 years. She has endured backed-up toilets, broken elevators, incessant fire alarms, and unreliable heating and cooling. She wasn’t happy about having to move, but she had no choice.
Now she wonders if she’ll have to move again when the RAD conversions begin.
“They’re moving people around like cattle,” King said. “This place I’m in now isn’t any better or safer than the other place. And I had to put most of my things in storage.”
This story first appeared at dailymemphian.com under an exclusive use agreement with The Institute.
