The Oak Ridge Housing Authority is preparing to renovate 128 existing public housing units and build 104 new affordable workforce rental units at a total development cost of $56 million, with the support of tax credits and tax-exempt bond awards announced today by the Tennessee Housing Development Agency.

The low-income housing tax credits and tax-exempt bonds will generate up to $51.8 million for the renovation and new construction developments throughout Oak Ridge, according to Maria Catron, ORHA Executive Director.

THDA representatives are joining ORHA and its development partner, Collaborative Housing Solutions, in making the announcement of funds that will help substantially rehab the 128 units scattered across the city and help build new rental housing in the Scarboro community.

The announcement is taking place at the Scarboro Community Center, 148 Carver Ave., Oak Ridge, adjacent to the 10-acre site where the 104 new housing units will be located.

ORHA is receiving a 4 percent tax credit, valued at $15.3 million, and $18.5 million in tax-exempt bonds to build 104 new units of workforce housing in Scarboro and to renovate 58 public housing units across the city on Apple Lane, Wade Lane, Knoll Lane and Honeysuckle Lane.

Another 9 percent tax credit award, valued at $18 million, will help renovate 70 units spread across four sites on LaSalle Road, Irene Lane, Van Hicks Road and Joel Lane. Having the sites scattered across the city reflects thoughtful public policy by the city to help create mixed income neighborhoods, preventing concentration of poverty in one location, Catron said.

“The work being done by Oak Ridge Housing Authority will transform and improve the city’s public housing, as well as provide much-needed affordable housing for low-income families and individuals,” said Ralph Perrey, THDA Executive Director. “THDA supports projects like this through our Affordable Housing Credits to help offset the costs of construction and ensure that affordable housing can be built that will make a positive impact on the communities where they are located.”

The redevelopment of these properties is a critical component of the city-wide master-planned “City Blueprint Plan,” adopted by Oak Ridge City Council in 2019, according to Richelle Patton, Collaborative Housing Solutions President. The Blueprint’s goals and action strategies focus on a cross-sector approach to improve the quality of life in the city, as well as to position itself for future population growth.

Among the Blueprint’s goals is developing strategies to restore the heritage of Legacy neighborhoods, and the new construction in Scarboro recognizes that community’s history as a segregated Black community during the 1940s in Oak Ridge and its place in history as sending the first 85 students from Scarboro School to integrate Oak Ridge schools in 1955, a first for the southeastern states.
ORHA worked collaboratively with Scarboro residents in planning the new rental units there.

The Blueprint’s goals also include expanding housing options by adding high-quality purchase and rental units attractive to young families and new hires, which the ORHA’s plans support. The Scarboro site will include 8 to 10 homeownership units.

Besides the tax credits, another change that makes the renovation of the 128 existing rental units feasible and affordable is a Rental Assistance Demonstration (RAD) grant program that allows housing authorities to address deferred maintenance and much needed improvements in public housing, according to Catron. The grant, from the U.S. Department of Housing and Urban Development, allows housing authorities to borrow money for repairs, rather than depending upon allocations from Congress.

“These buildings, built in the 1970s or early 1980s, have not had a substantial rehab in more than 50 years. We are looking at $75,000 to $85,000 per unit in rehab costs, which will include new kitchens, new baths, new appliances, new flooring, new HVAC units, new windows and façade improvements,” Catron said of the buildings where the 128 rental units are located.

“This public-private partnership allows us to not only address current needs, but also position ourselves to be able to address future needs in the housing market,” she said. The RAD program opens the developments to private partners who will invest in the tax credits and bonds.

The RAD program allows housing authorities to take over ownership of its rental units from HUD and, like private landlords, have the ability to take out loans and make repairs. With units under HUD ownership, rather than local ownership, the housing authority did not have the ability to get loans. The RAD program now treats housing authorities like private landlords, with HUD providing funding under the project-based Section 8 program.

Construction on the developments is expected to begin in early 2025. The new Scarboro units are expected to be completed by mid-2026 and occupied before the end of that year.

The Oak Ridge Housing Authority manages public housing units and aims to provide quality, affordable housing and foster self-sufficiency in the community.

The Tennessee Housing Development Agency is the state’s housing finance agency, promoting the production of more affordable new housing units and preservation and rehabilitation of existing housing units for very low-income, low-income and moderate-income individuals and families in the state.

Collaborative Housing Solutions is an Atlanta-based development firm specializing in creative problem solving to develop affordable rental housing.