2014-11-19 / News

More than 100 likely to be displaced from apartments

By Michael Buettner

Residents of about 100 apartments off Jefferson Davis Highway will have to find new housing or a new way to pay the rent before the end of February, and residents of a neighboring complex with nearly 200 units could find themselves in the same situation next year.

Tenants in the Bermuda Run and Colonial Ridge apartments south of Chester have received letters notifying them that the properties’ California-based owner will no longer be participating in the Department of Housing and Urban Development’s Section 8 Housing Assistance Program.

Andrew Chisholm, director of multifamily management with Drucker & Falk, which manages the complex for an affiliate of Irvine, Calif.-based Desola Development Associates, said the owner was unable to come to an agreement with HUD to extend the program at the 100-unit Bermuda Run complex.

The contract was set to expire on Dec. 4, but Chisholm said Desola and HUD agreed to extend the agreement until the end of February so residents wouldn’t be forced to look for new housing during the holidays, he said.

The owner plans “to take the property market-rate,” Chisholm said, meaning rents will be charged based on prevailing market levels without subsidies.

The company is required to notify residents of the change. Tenants are not required to leave, Chisholm said. “They can stay, but any of them [using the HUD program] will have to pay by other means.”

All of the residents at Bermuda Run participate in the Section 8 program, according to Lisa Wolfe, public affairs officer for HUD’s regional office in Philadelphia. She said the Virginia Housing Development Authority (VHDA) is “working with the residents to help them transition to new housing. Fortunately, the Chesterfield area has a good supply of affordable housing and VHDA does not anticipate having any challenges in helping the families relocate.”

Wolfe said the nonrenewal of the contract came about because the owner’s proposed rents for the coming year were higher than HUD’s research indicated was appropriate for the area.

Wolfe said Desola has indicated it also plans to “opt out of HUD assistance next year” for Colonial Ridge when that Section 8 contract expires on Sept. 25. The residents of all but one of that complex’s 192 units are participants in the program.

Wolfe said VHDA “has been working with the families to explore options to either remain in the property or relocate. Most have indicated a desire to move as soon as they can locate another rental unit and provide proper notice to the owner per their lease agreement.”

The reason is that HUD’s Housing Choice Voucher program “actually provides more flexibility for residents by enabling them to live in a place of their own choosing, rather than a specific property,” she said.

Anyone who has trouble finding a new home by Feb. 28 can request an extension of the search period, Wolfe said.

In addition to VHDA, the Chesterfield/Colonial Heights Department of Social Services can help residents locate new housing, she said.

Desola acquired the properties with the help of $25 million of tax-exempt multifamily housing revenue bonds issued in 2011 through the county’s Economic Development Authority. The bond proceeds were also intended to help cover the cost of renovating the 35-yearold property.

State law allows local housing agencies or economic development authorities to issue bonds to help “promote safe and affordable housing in the commonwealth and to benefit thereby the safety, health, welfare and prosperity” of residents. The owner is responsible for paying off the principal and interest on the bonds. Desola has done similar deals in California.

The main benefit of raising the funds by issuing bonds through the county rather than simply borrowing the money from a bank or other lender is a lower interest rate based on the county’s credit rating.

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