The Baltimore Housing Authority's plan to sell 22 of its 28 apartment and townhouse complexes drew dozens of concerned tenants and workers Wednesday to a City Council committee hearing.
Floyd Vines, a resident at J. Van Story Branch high-rise, one of the properties to be sold, said Maryland leaders should petition Congress to restore its investment in the public housing, rather than turn to private developers to provide a cash infusion.
Under the plan announced last week, the Housing Authority will sell nearly 40 percent of its properties to private developers as a way to raise more than $300 million in renovations and upgrades to the aging complexes that need new elevators, heating and cooling systems and modern kitchens and bathrooms. Rent for the apartments and townhouses will remain low.
Vines suggested the federal government use some of the money from defense spending to finance public housing upkeep.
"Send those three drones back, we'll take the money," said Vines, who was one of about 60 people who attended the hearing.
Baltimore is among the first cities to receive approval under a new initiative by the U.S. Department of Housing and Urban Development, known as the Rental Assistance Demonstration Program. Developers who buy the properties can receive tax credits.
The HUD program expects to generate nearly $816 billion in private-sector investment through the sale of 60,000 public housing units nationwide.
Commissioner Paul T. Graziano pledged that tenants in the properties now will not be kicked out of their homes and they won't be required to reapply to stay.
"The people who are there today cannot be required to move," Graziano testified during the televised hearing of the Housing and Community Development Committee. "You cannot re-screen them."
Despite the assurances, Jeff Singer, a longtime affordable housing and homeless advocate in Baltimore, said selling the public housing puts the individuals in housing at risk, especially if Congress would eliminate the low-income tax credit or the new owners went bankrupt and the properties were foreclosed on.
"No one could guarantee that people won't get thrown out," Singer said.
The 22 complexes will be sold over the next two years, including half by early 2015. Renovations are expected to begin shortly after the buildings are sold.
The tenants who live in the 4,000 units to be sold — most of whom are senior citizens and disabled individuals — will be relocated to other apartments within their building or to hotels while the renovations are being complete.
Councilwoman Mary Pat Clarke questioned whether the property renovations would result in fewer units in the buildings, but Graziano said the developers would have "no economic incentive" to do that. He said subsidies from the federal government are based on the number of units.
Construction on Somerset Court in the Oldtown neighborhood, however, may result in fewer units, because of a security concern about the current building layout plan, Graziano said.
As part of the tax credit program, Graziano said developers will receive $27 million in the first year, and the Housing Authority plans to receive $10 million of that. He said the agency will use that for renovations on other public housing properties not being sold, such as the Perkins Homes and the McCullough low-rise.
Earlier Wednesday, Mayor Stephanie Rawlings-Blake said she backs the plan as a way to improve the state of public housing in Baltimore.
"We'd be leaving money on the table — much needed money for capital improvements — if we didn't move forward," she said.
The properties will be sold to the developers based on appraised values that are being determined now. But instead of receiving cash, the Housing Authority will allow the developers to use the finances for the property rehabilitation.
If the properties begin to generate cash at some point in the future, the Housing Authority will receive money toward the purchase price, but only after all expenses and debt are covered.