SPECIAL FOCUS

READERS’ CHOICE AWARDS

BEST PRESERVATION PROJECT:
Turning a Rundown Property Around

BY LIZ ENOCHS

AFFORDABLE HOUSING FINANCE • NOVEMBER 2007

FREDERICKSBURG, VA.—Sonya Ellis remembers when her mother’s apartment got shot up by a gunman several years ago. Back then, Hazel Hill Apartments, where both lived, was run down and projected an air of neglect, with little landscaping gracing the buildings and few services for residents. Ellis’ unit was plagued by drafty windows, an inefficient window-mounted air-conditioning unit, and roach and mice infestations made worse by holes in the walls that invited in more pests.

“Now it’s all patched up and fixed up,” she said. “You can’t even tell it’s the same apartment, really.” Other things have changed too. Now the apartment complex, which underwent a two-year renovation completed in 2006, has two police officers assigned to walk the community and keep an eye on surrounding neighborhoods as well. One is paid for by the city of Fredericksburg and the other by the National Housing Trust/Enterprise Preservation Corp., which rehabbed the property.

“The partnership has proven to be very effective to reduce crime, improve the quality of life, and improve safety for both the residents of Hazel Hill and the surrounding areas,” said David W. Nye, chief of the Fredericksburg police.

The renovation of the 147-unit property was aimed not just at improving the physical condition of the property, but also at providing a host of services to the residents to help them improve their lives. In addition to the police detail, NHT/Enterprise installed a health-care program and other resident services. Residents have access to an on-site computer lab, a food bank program that provides a once-a-month delivery to eligible residents, a variety of classes, a regular outdoor movie night, a meal program for seniors, and after-school programs for children.

A nurse who is on site for between eight and 12 hours per week provides blood pressure checks, diabetes screening, and other basic health services, in addition to assistance with health insurance paperwork and bureaucracy. She also teaches classes related to pregnancy, parenting, infant care, nutrition, and other topics.

The turnaround is remarkable for a property that, just a few years ago, was on the verge of being lost to the community as an affordable housing resource. The Department of Housing and Urban Development (HUD) was threatening to foreclose unless the then-owner disposed of the property, which likely would have led to its conversion to a market-rate apartment complex. Then NHT/Enterprise stepped in to purchase and renovate the deteriorated complex.

The $15.6 million rehabilitation was funded with $8.15 million in proceeds from tax-exempt bonds as well as $4.7 million in equity from the sale of 4 percent low-income housing tax credits. The syndicator was Enterprise Community Investment, Inc.

The biggest challenge for the development was figuring out how to get the Sec. 8 contract rents increased to levels that would support the debt service. “Ultimately the Richmond HUD field office worked really hard with us to get that done,” said Scott Kline, a vice president with NHT. Because HUD allowed NHT/Enterprise to mark up the rents to market, tenants now pay only 17 percent of the rental income collected; HUD pays the rest. The vast majority of resident households earn less than 30 percent of area median income, according to NHT/Enterprise.

The property houses 450 residents, including more than 141 children, in a markedly different environment than what existed before the rehab. “Living here, it’s nowhere near like it used to be,” said Ellis.

Hazel Hill Apartments