HUD halts affordable housing complex sale, but some residents have already been displaced

Feb 14, 2021

 

Last week, the U.S. Department of Housing and Urban Development ordered a halt to the sale of the Driftwood Apartment complex in Wilmington. The sale process threatens to displace vulnerable, disabled residents, and caught local and state officials off guard.

Driftwood Apartments is a 14-unit complex, dedicated to formerly homeless residents with disabilities. It’s privately owned, and managed by Wilmington Housing Finance and Development, a private non-profit created by the Wilmington Housing Authority. 

Letter received by Driftwood residents.
Credit Benjamin Schachtman

  Susan Harris says she’s lived at Driftwood for fifteen years. She says WHFD gave her less than a month to vacate. Harris says she currently has a lease that doesn't expire until May.

“Three office members came to driftwood on January the 4th, had us all meet outside because of COVID. We all met outside, she gave us a mandatory meeting paper, we met, she said that they were going to sell the place, and that we had to be out by January the 31st. Then, they gave us written notice, some kind of written notice, on January the 12th. That said we had to be out by January 31.”

Roughly half of the tenants have since relocated.

The sale announcement surprised local and state leaders, and alarmed housing advocates.

 

Related: 'Every person on city council was incensed,' Mayor shares concerns over Driftwood sale [WECT]

 

The North Carolina Housing Finance Agency, which administered federal tax credits to Driftwood, confirmed it was not informed of the sale, which it must approve before it can go forward. Those tax credits require that Driftwood maintain affordable rates for another fifteen years, regardless of whether the property is sold.

 Last month, NCHFA Executive Director Scott Farmer said clearing out tenants in properties like these is uncommon.

“So it's highly unusual to have a property where it's being vacated prior to the sale unless there's other issues related to the property.”

 

Related: More on Low Income Housing Tax Credits (LIHTC) from NPR here.

HUD, which issued a separate $250,000 grant to Driftwood, also must approve the sale. While HUD was notified of the intent to sell, a spokesperson for the department said “there are stipulations that were not fully addressed regarding low-income HUD funding commitments through 2025 and proposed actions concerning current residents.”

HUD also confirmed that Driftwood is covered by the Universal Relocation Act, a federal law that protects housing units that receive HUD funding; the URA requires 90 days notice and other measures, including financial assistance in some cases, to help relocate displaced tenants. 

WHFD did not immediately respond to questions about HUD’s cease order. The property owners have also not responded to requests for comment.

However, last month, WHFD Director Betty Bisbee said the only requirement for the sale was maintaining the affordability of the units.

“Well, the only thing is that we have to do is make sure that it stays affordable for the years that are remaining.”

Bisbee said that, while tenants had been warned of the impending sale, they weren’t being legally evicted.

“We aren't evicting any of our tenants. We're not evicting anybody.”

Bisbee also said WHFD was helping tenants secure new residences. Susan Harris says that’s true, although she had to agree to a new place to live on the spot, without having seen it first. Harris believes her new place will be acceptable, but says not all her fellow tenants were as lucky.

“But part of what they did was find places that were unsafe. Like there's one out here that’s refused to go to where they suggested because it’s unsafe --- and we need safe affordable housing.”

Harris says WHFD has offered a moving truck, but no other financial assistance. She’s grateful things have worked out, but notes that she was never told that her time at Driftwood could come to an end. The complex is, after all, described on WHFD’s website as ‘permanent supportive housing.’

 

 “I'm just grateful to have a place. But I'm so sorry I'm having to lose this one. I thought I would be here until I died.”

HUD has given WHFD until February 18 to respond in writing to its concerns.