A week ago, attorney David Miller announced that the USDA was offering vouchers to all former Holly Plaza tenants impacted by mold. But with less than two weeks to go til their hotel move-out date, tenants have been struggling to figure out how to use these rent vouchers. Here's a breakdown.
How do the vouchers work?
These vouchers are made possible by the Multifamily Tenant Voucher Program. Holly Plaza tenants can use them to supplement their rent payments at USDA-financed rental properties or at eligible non-public housing properties.
The vouchers are calculated based on the fair market price of the property in question and on what the tenant was paying previously at their public housing complex. So if a tenant was paying $200 a month for an apartment, and the market values that property at $500 a month, then the voucher will equal $300 a month.
Rural Development (RD) is the branch of the USDA running this program. RD pays this money directly to the tenants' landlords each month.
What else do the vouchers cover?
The vouchers only supplement rent payments. They do not cover utilities, security deposits or moving expenses.
Initially, there was some talk amongst tenants about using the vouchers to cover mortgage payments after purchasing a home. A HUD spokesperson told WHQR that that's incorrect.
Who can use them?
Former tenants of Holly Plaza are eligible for the voucher program so long as they meet income requirements. According to a guidebook from 2010, eligible households are "at or below 80% of family median income."
All Holly Plaza tenants already meet the income requirements for this program. But if they choose to renew their contract with the USDA after one year, their income must remain at or below 80% of their area's family median income. So as long as their income doesn't change, they can use the rent vouchers.
Miller has previously said tenants who have accepted lease buyouts from the town are still eligible for the voucher program. However, it's unclear whether the money offered in the lease buyouts could count as tenant income, thereby disqualifying tenants from the voucher program when they try to renew next year.
Miller is working to distribute the vouchers to all former Holly Plaza tenants. If you lost your home at Holly Plaza due to mold contamination, call Miller's office to get your voucher.
Where can people use the vouchers?
The USDA has a list of public housing developments it finances throughout the state of North Carolina. But tenants can use these vouchers at privately operated properties, too – so long as the landlord meets USDA eligibility requirements. The guidebook states that privately owned properties must be inspected by RD prior to move-in.
Mayor Jeff Wenzel is encouraging former tenants to apply at Springfield Park Apartments, a USDA-financed apartment complex built last year in Jacksonville. An additional site, Crestfield Park, will be opening up next to Springfield Park in early 2024.
According to a RD spokesperson, the vouchers can be used anywhere in the United States. Tenants can choose to move out of North Carolina if they wish.
When can people start using them?
It's unclear. Miller has said that the vouchers were available for use as early as January. But the USDA's guidebook on the Multifamily Tenant Voucher Program says the application process – from RD presenting the voucher to a family to the family moving into their new unit – typically takes between 60 to 90 days.
Miller is trying to expedite the process.
"I know there's going to be some type of period where they are going to have to wait for approval," he said. "But the USDA and I are working very hard to be able to turn that around as quickly as possible."
Once RD gives out the vouchers, tenants have 60 days to find housing that meets program standards, with the option for an extension. After selecting a new place, RD has 30 days to inspect the property and make sure it's up to scratch. These inspections can be conducted in-person or via video call. The USDA lists its inspection criteria in its guidebook.
Where does the funding come from?
RD runs the Multifamily Tenant Voucher Program. RD provides a number of resources for rural communities, including loans to build and maintain public housing. Holly Ridge took out one of these loans to construct Holly Plaza in 1980. This mortgage was financed through RD's Section 515 program.
When Section 515 public housing complexes go through major financial changes – like a foreclosure or paying off their USDA loan early – often, that leaves their low-income tenants in a bind. For example, the complex's new owner could decide to modify RD requirements and raise rent prices. The Multifamily Tenant Voucher Program serves as an option for tenants who, for one reason or another, can no longer live in their USDA-funded housing complex.
Last month, Holly Ridge's code inspectors said the amount of mold in the apartment complex was too hazardous for residents. As a result, they condemned all Holly Plaza apartments. According to Wenzel, condemning the property also meant paying off the remainder of their USDA loan – at least $700,000 – in full. But prepayment of that USDA loan also made the Holly Plaza tenants eligible for the vouchers. (WHQR has asked RD for clarification on this subject and will update with their response.)
Holly Ridge town manager Heather Reynolds has said she and other public officials have been working to secure vouchers for several months. The town of Holly Ridge reached out to Congressman Greg Murphy, who represents North Carolina's third district, to ask for assistance in securing the vouchers this fall. According to Reynolds, Murphy helped advocate for the residents of Holly Ridge on a federal level, finally securing the USDA vouchers on Dec. 13, 2023.
It's unclear why Miller, who is representing a group of tenants in the class action suit against Holly Ridge and former property management company Pendergraph, is distributing the vouchers. Several sources point to the ongoing legal battle between the tenants, Holly Ridge and Pendergraph as a possible reason.
Are people who accept the USDA voucher system still eligible for HUD assistance?
Up until now, the U.S. Dept. of Housing and Urban Development (HUD) subsidized tenants' rent payments at Holly Plaza. But according to a spokesperson, tenants signing onto the voucher program may not also draw benefits from HUD.
"No," the spokesperson stated via email. "Vouchers may not be used at rental units subsidized by other housing programs, including U.S. Housing and Urban Development programs."
Accepting the voucher would mean terminating their lease agreement with the town of Holly Ridge and HUD. But that doesn't mean residents have to give up HUD benefits forever. Miller said that it's possible to switch from one program to another.
"Ultimately, if you accept the USDA voucher, and then you want to switch over in the future, you would still be able to do so," he said. "However, you would have to go to the bottom of the waiting list of any HUD program.
A spokesperson for HUD stated: "Receiving a voucher issued by the USDA does not preclude future HUD assistance, either through another HUD property, through Tenant Protection Vouchers, or returning to the property, if it were to reopen."
What is HUD's role in all this?
The voucher program is run solely by USDA. HUD is not involved. When asked whether they planned to meet with tenants to assess their options, a HUD spokesperson stated, "Unfortunately, we cannot accommodate an interview."
I'm a concerned citizen who wants to help Holly Plaza tenants find housing. What can I do?
You can find more information about the voucher program, including payment options and housing eligibility standards, in RD's guidebook. Holly Plaza tenants are requesting that all interested landlords speak to Miller or with the tenants directly about arranging housing.
It's not just limited to renting out an apartment. Several good Samaritans have offered former Holly Plaza tenants the use of their vacation homes free of charge until they find adequate housing through the voucher program. Others, including residents of luxury housing development Summerhouse, have been donating food, furniture, clothing and other resources to tenants in need.
Even with the voucher program in motion, tenants told WHQR that the vast majority of Holly Plaza families will still have nowhere to go on Dec. 31. They're urging all concerned citizens to help them secure housing and other resources.
Where can I get more information on the voucher program?
Miller is doing individual interviews with former Holly Plaza tenants throughout the week to discuss the vouchers. Tenants can call his office to schedule a meeting.
The USDA is holding a private Q&A session for Holly Plaza tenants at their hotel in Jacksonville this Friday, Dec. 22 at 6 p.m.
