CHAPEL HILL - The new owner of Colony Apartments has stopped accepting new Section 8 tenants but says the complex will remain affordably priced.
Section 8 is a federal subsidy program that helps low-income people pay market-rate rents. Colony Apartments on Ephesus Church Road had about 15 Section 8 tenants, whose leases are being honored but will not be renewed under the voucher program.
The changes at Colony, which has about 200 apartments overall, got the Town Council's attention last month. Members Sally Greene and Penny Rich worried about the apartments becoming more expensive.
Tara Fykes, the county's director of housing, human rights and community development, said the county needs more landlords willing to take Section 8 vouchers.
The county has 1,800 people on the waiting list, she said, and with waits taking three to five years, the county stopped adding names last March.
"Our families do have difficulty finding affordable housing," Fykes said. "We don't want to lose any affordable housing."Long-needed repairs
Jim Babb of Bluerock Real Estate stressed the company is making long-needed repairs to the 50-year old brick apartment complex and keeping rents low.
"This still is and will continue to be an affordable housing option," he said.
In an interview, Babb repeated that Colony Apartment, which is being renamed, is not a subsidized housing complex.
"Our decision to discontinue the Section 8 voucher program was discretionary," he said. "We offered every Section 8 resident the choice to reapply or renew [without the voucher]. In no case have we evicted someone because they had a section 8 voucher."
In most cases, the existing Section 8 tenants whose leases ended chose to not to reapply or could not qualify, he said.
Meanwhile, Bluerock is investing more than $1 million in the complex.
"In my view the property was actually substandard for what it should be," he said. "The potholes [in the parking lot[ were so deep you could get lost in one. The laundry room has been in disrepair; we're completing renovating it with new washer-dryer units. We're repairing and replacing sidewalks, [making] roof repairs."
Occupancy when Bluerock closed on the property in February was about 70 percent compared to a local average in the low to mid 90s, he said.
The company has slightly raised rents on newly renovated units - a 1 bedroom/1bath 560 square foot unit leases for $635; a 2 bedroom/2 bathroom 1,070 square foot unit tops out at $935.
Even so, Babb says the complex will in some cases be 10 percent to 20 percent below competitors.
Those renewing leases will see only a 2 percent to 4 percent increase, said Melissa Marotta, regional manager for Bell Partners Inc. which manages the complex for Bluerock.
Marotta climbed a rickety iron staircase into a unit getting new carpeting, light fixtures, and nickel-finished cabinet knobs.
At another unit, orange and white striped barrels blocked off a sagging front step where part of the concrete was smashed.
In its first month, Marotta said, the company received more than 200 work orders from residents.Future redevelopment
Babb says the company's immediate plan is to fix the complex, remarket it and fill empty apartments.
Long term, the town sees the Ephesus Church Road/Fordham Boulevard area as ripe for redevelopment.
A plan going to the Town Council Monday night asks the council to adopt a vision for turning the Ram's Plaza area into an mixed-use area with denser housing, including more affordable and workforce housing.
Affordable means housing priced so people below 80 percent of the median income don't pay more than 30 percent of their income on housing. Workforce housing covers people making 80 percent to 120 percent, said town economic development officer Dwight Bassett.
If Colony were converted from 200 apartments to 400 condominiums, Bassett said, town rules would require 15 percent, or 60 units, be priced at the affordable level.
Overall, he says, the Ephesus/Fordham plan could add up to 300 units, or 20 percent of new units in the area, priced as either affordable or workforce housing.
Babb has participated in town discussions about the area, and the town thinks Bluerock will redevelop Colony Apartments in a few years.
Babb says it's possible.
"If the town decides the area makes sense to develop that's something we would consider," he said. "But we're a long way from that."
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