Chattanooga Housing Authority eyes taking back some public housing sites

Chattanooga Housing Authority eyes taking back some public housing sites

November 12th, 2012 by Yolanda Putman in Local Regional News

Betsy McCright is executive director of the Chattanooga Housing Authority.

Betsy McCright is executive director of the Chattanooga...

Photo by Jake Daniels /Times Free Press.



* CHA hires Pennrose Properties to manage the Villages at Alton Park, the housing authority's first mixed-income housing site.


* Pennrose manages Oaks at Camden.


* Pennrose restricts rent payment for Villages at Alton Park residents to a moneygram.

* A former Pennrose employee files a lawsuit stating that residents at the Villages and at the Oaks had been overcharged for rent. The lawsuit was dismissed, but some residents at both sites got refunds.


* Pennrose manages Maple Hills Apartments. In September, nearly two months after the site hosted its grand opening, only seven units were occupied.

* CHA discusses taking over managing the mixed-finance developments now handled by Pennrose.

Source: News reports, CHA

Seven years after bringing in Pennrose Properties to manage some of its public housing sites, the Chattanooga Housing Authority is considering taking them back.

The private company has been the subject of resident complaints about maintenance, payment methods and a lack of communication, as well as a lawsuit alleging that Pennrose charged tenants too much rent.

But it's only now, after some housing officials expressed concern about the slow rate at which the new Maple Hills Apartments are being filled, that discussion turned to CHA taking over the Pennrose-managed sites at some point.

The number of vacancies in CHA public housing contributed to a recent substandard management score from federal officials. The U.S. Department of Housing and Urban Development also cited CHA's high number of rental write-offs.

CHA blamed that on its policy of allowing residents to make payment arrangements when they get behind on rent. The alternative is to put residents out on the street, said CHA Executive Director Betsy McCright.

So CHA said it would focus on improving its score with HUD by decreasing the number of vacant units.

CHA board Chairman Eddie Holmes said HUD didn't count vacancies in Maple Hills against the housing agency this year because the 48-unit site had just opened.

He said the biggest problem was at College Hill Courts, where more than 90 units of 490 were vacant earlier this year.

CHA officials said in an emailed statement Friday it is not the agency's intent to cancel existing contracts with Pennrose, but to work "cooperatively with Pennrose to ensure that all aspects of the public housing units' administration is compliant with HUD regulations."

At the October board meeting, McCright said no management change is expected before the first quarter of 2013.

Pennrose officials did not respond to a request for comment.

Trouble filling units

Housing officials hired Pennrose in 2005 to manage the Villages at Alton Park.

Holmes said the villages was CHA's first experience with mixed-finance housing and Pennrose had experience with low-income housing tax funding.

CHA later hired Pennrose to manage its two other sites that had mixed funding sources: the Oaks at Camden and Maple Hills.

CHA manages the rest of its sites.

Pennrose has struggled to put residents in the $8.7 million Maple Hills Apartments since they opened in July. Only 33 units on the 48-unit site are public housing. The remaining 15 units are funded by low-income tax credits and are available to tenants with government-issued housing vouchers.

In September, two months after Maple Hills opened, only seven families had moved in. Yet nearly 2,000 people were waiting to get into public housing.

Pennrose officials have said it was a challenge to fulfill all the governmental and administrative requirements that come with the housing.

Neither Pennrose nor CHA officials responded last week when asked how many vacant apartments remain at Maple Hills. CHA officials also did not respond to questions about how much Pennrose is paid to manage the three sites.

A host of problems

Several residents at the Villages at Alton Park have complained about Pennrose's management.

"The residents don't know what is going on out here," said Shirley Collins, president of the Villages at Alton Park resident association. "We don't even know if Pennrose is in the office. We pay our rent at CVS."

Residents have no self-sufficiency program like at Fairmount Apartments, no job training like in College Hill Courts, and the management office repairs nothing, she said.

"We just pay our rent," said Collins. "No one changes the lights; no one sprays for bugs."

In July 2011 residents complained because Pennrose began requiring residents to pay rent with an electronic moneygram instead of the 75 cent money orders they were accustomed to. The moneygram fee could run as high as $5 if residents purchased it from the most convenient site, the CVS about a mile from the Villages. A cheaper moneygram is available at Walmart, about four miles away.

But Pennrose stood by the change, saying that moneygrams reduced paperwork for the property manager and that residents can pay rent anytime Walmart is open instead of coming to the office.

Also in July 2011 a former Pennrose property manager filed a lawsuit against the company claiming that residents had been overcharged as much as $170,000 in rent. The suit said the miscalculations occurred between 2008 and November 2010, when the property manager was fired after reporting them.

The lawsuit claimed that some miscalculations were corrected in 2008, but that the practice later resumed. The lawsuit later was dismissed, but dozens of residents at the Oaks at Camden and the Villages received letters from Pennrose acknowledging that they had been overcharged, along with refund checks.

Open to a change

McCright met with Pennrose President Mark H. Dambly in October and said Pennrose is "open" to CHA taking over management.

Housing officials say they believe they can do a better job managing the sites locally, since Pennrose's corporate office is in Philadelphia.

"We can manage them and it will be local management versus right now their corporate office is in Philadelphia," said Holmes. "We can probably do a little more on-hand management with the maintenance and rent collection."