October 28, 2002

This eight-unit building at 1274 N. Fourth St. is typical of the properties which are part of the Broad Street Portfolio of federally subsidized, Section 8 housing in Columbus.  The apartments in this building are two-bedroom, townhouse units.

The portfolio:   The Broad Street Portfolio in Columbus consists of 1,335 units of federally subsidized project-based, Section 8 housing in some 242 buildings with the highest concentration of units in the Weinland Park neighborhood and the Near East Side.  The housing is privately owned by 13 limited partnerships with a common general partner.  All the units are managed by Broad Street Management, Inc. (BSMI).  This portfolio is the largest scattered-site, Section 8 project in the nation.  Although this housing is generally structurally sound, the units require modernization and have few amenities.  Because they are not competitive with newer public housing or tax-credit housing, most of the units have become housing of last resort.  Some 89% of the heads of household in the Broad Street units are single mothers with an average of less than $5,000 per year in income.

Initial restructuring:  The federal government proposed to restructure and extend the Section 8 contracts with existing owners under the federal “Mark-to-Market” program.  These proposed contracts would significantly reduce housing subsidies, diminish the owners’ incentive to improve management and maintenance and offer little money for renovation.

Alternative:  At the request of Mayor Michael Coleman and Ohio State President William Kirwan, Campus Partners in early 2001 negotiated an option to acquire the Broad Street Portfolio as a prerequisite to proposing an alternate plan for the housing.  Campus Partners convened an advisory panel to offer guidance and then developed an innovative alternate restructuring plan that is an effective compromise between two legitimate community goals:

1. the need to preserve the supply of Section 8 housing, and
2. the desire to encourage greater economic diversity in center city neighborhoods.

Campus Partners in June 2001 presented to HUD an alternate plan supported by neighborhood and civic leaders, tenant and affordable housing advocates, B.R.E.A.D., City of Columbus and The Ohio State University.  In brief, the plan would:

• Preserve the total supply of Section 8 units in the broader community.

• Improve site management, maintenance and security under new non-profit ownership to enhance the quality of life for residents and the surrounding neighborhoods.

• Invest an estimated $25,000 per unit in rehabilitation of the housing stock, including the addition of showers and washer/dryer hook-ups and exterior improvements to better serve residents and to help stimulate neighborhood revitalization.

• Provide supportive services and linkages to community resources for the residents.

• Adopt a nationally unique strategy for the voluntary relocation of several hundred Broad Street residents and the dispersal of 300 to 500 of the Section 8 contracts to new or renovated housing units in the broader community over three to five years. After the Section 8 contracts have been removed from 300 to 500 of the existing units, these properties could provide new opportunities for affordable homeownership or market-rate rental housing.

Some skepticism about this plan remains, particularly on the Near East Side.  Neighborhood advocates are concerned about the amount of Section 8 housing that would remain after the plan is implemented, as well as Campus Partners’ involvement on the East Side.  The plan, however, clearly emphasizes the equitable treatment of all neighborhoods, and HUD officials have repeatedly said that the alternative to this plan is to restructure and extend the contracts with the existing owners.

Development partner:  Campus Partners in November 2001 selected Ohio Capital Corporation for Housing (OCCH) to serve as the lead developer to implement the alternate plan.  Formed by the Ohio Housing Finance Agency in 1989, OCCH is an independent non-profit corporation which has worked with public and private developers to create more than 7,500 units of affordable housing.  OCCH has extensive experience in financing development projects and in asset management and has established excellent partnerships with key developers and managers of affordable housing.

Federal response:  Discussions with federal housing officials continued through the spring and summer of 2002.  HUD proposed that the new ownership entity created by Campus Partners and OCCH close on the Broad Street Portfolio and go through the Mark to Market restructuring by June 30, 2002.  That date was not met due to delays in resolving the remaining legal, regulatory and financial issues.  Campus Partners and OCCH, however, expect to close on the Broad Street properties before the end of 2002 and begin implementation of their plan for this housing.  HUD officials in Washington and in the Columbus field office have provided extraordinary cooperation.

Congressional support:  Due to the sponsorship of Senator Mike DeWine and Congresswoman Deborah Pryce, Congress in November 2001 approved a special appropriation of $750,000 to help implement this affordable housing plan as a national model for Section 8 housing.  Additional local, state and federal resources will be required, but these funds will provide valuable early financial support for effective implementation.

Next steps:  To close on this complex portfolio, OCCH and Campus Partners are performing the due diligence needed to acquire the properties:

• OCCH employed Moody-Nolan, Ltd., which has completed an extensive architectural review of the buildings to determine their condition and renovation requirements.

• OCCH is in the process of securing the private and public financing for acquisition and renovation costs and is preparing the necessary legal documents for closing.

• OCCH and Campus Partners are preparing to implement improved property management practices and supportive services for residents.

• Campus Partners and OCCH have convened a broader community advisory panel.

MORE:  Fact Sheet on the Broad Street affordable housing portfolio

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          March 2001 News Release