CHAPEL HILL — Nine southern Orange County apartment complexes will no longer take federal dollars for low-income renters.
The properties, operated by General Services Corp., based in Richmond, Va., join a growing list of affordable communities that no longer accept rent vouchers from the U.S. Department of Housing and Urban Development. Colony Apartments on Ephesus Church Road stopped taking the vouchers in 2011, and Collins Crossing on Jones Ferry Road in Carrboro didnt renew the program this year.
Section 8 is a federal subsidy program that helps low-income people pay market-rate rents. However, property owners are not required to accept Section 8 vouchers.
Terry Meyers, GSC regional vice president, said the move was a business decision that will affect the companys holdings in Virginia, Las Vegas, Georgia and North Carolina.
GSC owns most of the affordable apartments left in the Chapel Hill-Carrboro area. It uses software common in the rental and hotel industries to adjust rent levels daily to reflect changing market conditions, he said.
The companys goal is to make a profit, but it also needs to renovate many units, Meyers said. The market is exceptionally good now, so it can ask residents to pay more, he explained.
Its not always possible for HUD and that network to keep up with our rent increases, he said.
According to an affordable housing analysis, roughly 26 percent of the 51,173 Orange County rental households met low-income qualifications in 2009. The countys Housing and Community Development office provides Section 8 vouchers to 620 households. An additional 1,800 households are on a waiting list that can take three to five years to cycle through.
Orange County Housing Director Tara Fikes said shes not sure how many Section 8 households are in GSC apartments, but it could be a significant number. Although she hasnt seen many other property owners reject the vouchers, a change by a big company like GSC is unusual, she said.
She is coordinating with the Orange County Partnership to End Homelessness and local housing groups to find options for those who will be affected.
Chapel Hill Housing Director Tina Vaughn said the change wont affect any of the towns clients, but she expects to see the waiting list grow because of it. The town has 336 clients in 13 low-rent complexes and averages more than 300 people on its waiting list, she said.
Carrboro Mayor Mark Chilton, who also works with the housing nonprofit Empowerment Inc., said the demand for low-income housing is growing. The towns only recourse is to seek more affordable housing concessions from developers who propose projects, he said.
We were already hearing for a couple of years now how difficult it is to find Section 8 (housing), so this is disappointing, he said.
David Smith and his wife learned Thursday afternoon that Carolina Apartments is not going to renew their Section 8 voucher when the lease ends Oct. 20. He also learned last month that his rent would be going up 7 percent to 10 percent, making it harder to budget the couples disability income.
The couple pays $300 of their own money in rent roughly 30 percent of their income after medical and utility bills and uses a voucher to pay $400 more.
While hes concerned that few affordable apartments will be available in October, management refused to let him break the lease so they could start looking now, he said. He was told he could renew the lease if the couples monthly income equals three times the rent or they get a co-signer, he said.
Meyers confirmed Friday that those options, and possibly others, would be available to all Section 8 renters.
Michael Kelly, Housing for New Hope housing support specialist, said the 2.8-times-rent rule is unofficial but common among complexes that rent to low-income residents. The idea is that residents have to make more money than the cost of rent to pay for utilities, food and other living expenses, he said.
Kelly uses another pool of HUD funding not Section 8 to provide transition funding for people moving from the homeless shelter to more permanent housing. He helped Smith and his wife find their first Section 8 apartment after Smith was released from the hospital. He will now leverage the security deposit paid on the Carolina Apartments unit to help them into another home, he said.
The problem in Orange County is that GSC almost has a monopoly on affordable apartment complexes, so hes not sure where the Smiths or roughly a dozen other clients with whom he works will go, he said. It takes many years to build the safety net for low-income people, but an arbitrary decision can tear it down almost overnight, he said.
Youre talking about children and families, not just individuals, he said. They should not be forced out of their homes.