The U.S. Department of Housing and Urban Development has denied a Chattanooga Housing Authority request to take on a $38 million renovation of Cromwell Hills Apartments that would add 50 new housing units near the Camilla Drive site.
The agency also had proposed using the new housing as a place to move College Hill Courts residents before starting a planned renovation project there.
CHA Executive Director Betsy McCright announced at the housing authority's Jan. 31 board meeting that she received a letter from the department near the end of January turning down the Cromwell Hills request, saying it doesn't want to facilitate more housing sites that would result in areas with high concentrations of minorities and poverty.
"It's a review by Fair Housing, the equal opportunity arm of HUD, and basically they're saying that because the property is located in an area of high concentration of minorities - and high concentration is 51 percent or greater - then HUD is saying that you can't develop there," McCright said.
McCright said the housing agency has questions about the department's response.
Housing officials want to know if they can still renovate the existing property at Cromwell Hills, even though they can't build new housing, and if there are any changes they can make to the plans so they would be allowed to build the new housing.
"But at least we have a written decision from which we can work with HUD to try and continue on our quest to rehab the property," McCright said. "We're trying to work with HUD to see what we can do to modify the project so we can still rehab the property and hopefully still build."
The decades-old units at Cromwell Hills need new roofs, upgraded kitchens, new siding and some structural work. The housing authority's vice president of development, Naveed Minhas, has said the flooring is so weak that it moves when people walk on it.
Newly elected authority board Chairman Jim Sattler said he wants new development on the site, but he understands the need to deconcentrate poverty.
The more low-income residents can spread into middle- and upper-class communities, the more they increase their opportunities for upward mobility, he said. Some opportunities will come just because of the people who live near them, and neighbors tend to help each other, Sattler said.
He pointed to the Fairmount Apartments as an example of how low-income residents benefit just by changing their environment. Residents in many low-income areas are zoned to attend low-performing schools. But public housing residents at Fairmount Apartments attend the award-winning Normal Park Museum Magnet School, which has become a national model. A home on the same street as the school is listed at $549,000, according to trulia.com.
Some North Chattanooga home owners opposed public housing in the area when housing officials announced their plan, but Sattler said he hasn't heard one complaint since residents moved to the site.
Sattler replaces Eddie Holmes, who had served as chairman of the housing authority board since December 2007. Holmes plans to continue serving on the board. Local attorney Jim Levine was chosen as vice chairman.
Contact staff writer Yolanda Putman at yputman@timesfreepress.com or 423-757-6431.