Developer of new Penn North apartments worries about future of affordable housing

Developer of new Penn North apartments worries about future of affordable housing.

Even as politicians and community leaders prepare to celebrate the opening of a new, four-story building of affordable apartments in the 2600 block of Pennsylvania Ave. — just blocks from the intersection that was the epicenter of the April's riots — the developer worries such projects will become harder to do in the future.

Shifts in federal policy to encourage the creation of affordable housing in "higher opportunity" neighborhoods might leave areas like Penn-North behind, said Kevin Bell, senior vice president of the Woda Group, which recently completed the 61-unit Penn Square II — also known as Fulton Gethsemane Village — that will be celebrated Thursday.

"If there are limited resources and you say, 'Well, look, you've got to put a whole big chunk of resources to building affordable housing in rich communities,' that means you are putting fewer resources into communities like Penn-North," Bell said. "You've got to be … careful or that turns into a policy of abandoning communities that need help the most. I have a real problem with that."

The Department of Housing and Urban Development made a series of moves last year intended to increase access to "higher opportunity" neighborhoods — wealthier, whiter communities with less crime and better schools. Those included a proposed change to the housing voucher program that could cut subsidies to landlords in less expensive ZIP codes and a new fair-housing rule designed to reduce racially concentrated areas of poverty.

Advocates say the changes are a long-belated response to the evidence that where people live shapes their lives, as well as the ways official policies have furthered patterns of residential segregation.

Bell is worried that the focus on mobility and better neighborhoods means funding will be harder to secure for projects like Woda Group's, which are typically located in distressed neighborhoods and are designed to inject stability into the neighborhood by providing working families with affordable housing.

The Ohio company, which has an office in Annapolis, has developed two other apartment complexes on North Avenue and is working on the Mary Harvin Center, a senior apartment complex in East Baltimore that has been rebuilt after being burned down mid-construction during the rioting that followed Freddie Gray's death from injuries sustained in police custody.

The firm, which recently was awarded tax credits toward another housing project on North Avenue, is looking at other developments in Baltimore, Bell said.

Getting affordable housing built is tricky — even without riots, Bell said. Penn Square II, for example, suffered a 10-month delay after high construction bids prompted a redesign. (Bell said the high bids in part reflected high commodity prices pushed up by Chinese demand, which has since subsided.)

The developments are heavily dependent on public funding sources, too.

At the $16 million Fulton Gethsemane Village, financing included more than $12 million raised from the sale of $1.2 million of low-income housing tax credits, as well as a $1.6 million loan the city awarded the project using another federal program, according to public documents. (Rents in the building — which already is fully leased — range from about $500 to $1,000 a month, depending on the size of the unit, according to the property manager.)

"I'm hoping that the HUD policy will not get so extreme that it really chokes off funding to the communities that need federal dollars the most," Bell said. "I'm not saying not to build any housing out in richer communities, but not to forget about the distressed communities."

Others, including Baltimore Housing Commissioner Paul T. Graziano, have voiced concern in formal written comments to HUD that its emphasis on mobility will hurt poorer areas.

HUD is trying to beat back such worries. On Monday, spokesman Brian Sullivan called the concerns theoretical. In a September speech in Austin, HUD Secretary Julian Castro called for a "strong balance" between mobility and reinvestment, saying "we can't forget about these neighborhoods."

The Fulton Gethsemane project takes its name from two churches in the neighborhood. Penn Square II is a nod to the first 91 apartments Woda Group completed nearby in 2011.

The site, developed in the 1800s for slaughterhouses, was occupied by a gas station and a school bus parking lot. In 2004, residents blocked a plan to build a probation and parole facility there, criticizing officials for treating their neighborhood as dumping ground.

Annie Hall, president of the Penn North Community Association, said she has supported Woda's housing plans, which were better than that alternative. Even so, she hopes it will be the last residential apartment building on Pennsylvania Avenue, which she wants to see revived as a lively commercial corridor.

The Woda project does include two commercial spaces.

"It's not what we wanted, but at least that land is no longer barren," Hall said. "Maybe this will open the door to more development."

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