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Low-income housing on track for demolition

Mission’s affordable housing community Anacua Village is on course for demolition pending approval from the U.S. Department of Housing and Urban Development (HUD). And if all goes as planned, by 2025, there will be a new mixed-income development with more units in the same location. 

According to Mission Housing Authority Executive Director Arnold Padilla, the 80-unit low-income development at 810 N. Mayberry is long due for an upgrade

“Even though we try to keep them running efficiently, the units are close to, at this point in time, 70 years old. They’ve really outlived their life and they probably outlived their life 20 years ago,” Padilla said. “So right now, it’s embarrassing the condition of the units. And that’s the whole reason we’re doing what we’re doing — because it’s necessary. The condition of these units are not in great shape.” 

But before the Mission Housing Authority can tear down the structure and build new homes, it needs disposition approval from HUD and approval for low-income housing tax credits. Once HUD approves, MHA provides a 90-day notice to the current 65 tenants living at Anacua. After 90 days, MHA will help the tenants that qualify for protection vouchers relocate to new homes. Padilla said he expects the site to be vacated by the end of the calendar year if everything goes to plan. 

Tenants qualify for the protection voucher based on their family size, composition and income. So when it comes to relocating, each case is different because each tenant situation is different. But the housing authority assists them every step of the way. 

“The relocation is a process. It’s assisting the families from everything in finding the location they’re going to move to, to coordinating the move, to coordinating the opening of utilities and services at the new location and all that,” the MHA executive director said. “So when I say it takes time to relocate 65 families it can very easily take us anywhere from five to seven months or eight months.” 

Although the housing authority tries to relocate everyone to another Mission home, some tenants might have to move to one of the surrounding cities. If that is the case, the housing authority of the new city has the option to absorb the tenant into their program or allow the Mission Housing Authority to continue providing services. 

Regardless, Padilla said the most immediate concern is getting the Anacua families into better living situations. 

“Some are happy with [Anacua Village] and they’ve been living there five, six, seven, 10 years. They’re happy. But truly, truly, the condition of the units are poor and they’re not gonna get any better,” he said. “So priority one is, let’s get these families into much better units.”

But once the new development is complete, current Anacua residents are not automatically guaranteed housing there. Padilla said they will have the same opportunity as anyone else to submit a rental application. 

The decision to transform the site from a low-income development to mixed-income housing ultimately came down to funding. 

“There are not many avenues for the development of affordable housing. One of the reasons they’re difficult to build is that when you concentrate on only low-income families…the income revenue that you receive from an only low-income development is extremely small, which means that it doesn’t allow you to be able to borrow a lot of money,” Padilla explained. “When you create a diversified development, what’s called mixed-income, your revenue source is much larger. So you’re able to sustain a larger operational cost. And because nobody’s giving you subsidy — HUD is no longer subsidizing it — then that’s the only way you can keep it operating.” 

Because the federal government does not allocate funding for public housing development, the only way to construct it is to utilize other federal tools, such as tax credits. The MHA submitted an application to the Texas Department of Housing and Community Affairs for a low-income housing tax credit. The MHA won’t know the verdict until July. However, once approved, the Mission Housing Authority will use those funds to begin demolition. 

“A tax credit development is a very viable resource. It is a competitive application, but what this does is it actually takes internal revenue credits and those credits are sold on the market. Those seeking to relieve themselves of the tax burden, most of the time these are large corporations…they buy the credit from us through a syndicator,” the MHA executive director explained. “So they fund the development activity for the tax credit, and the housing authority does not have to pay that back. All we have to do is stay within compliance…then the housing authority is relieved of that requirement.” 

Padilla estimates that the housing authority will generate about $18 million from the tax credit, but the demolition and construction of Mission’s new mixed-income site will cost about $23 million. Therefore, they will need a loan to cover the difference. To afford to cover the difference, the MHA needed to make the new development open to all income levels. But out of the 138 units they plan to build, 112 will be affordable. 

“One of the things that housing authorities strive to do is to push their upward mobility opportunities to help families get out of poverty, move into higher income jobs and things of that nature so that they do not need to be in the public housing or these subsidized programs,” Padilla said. “These are efforts that the Mission Housing Authority has been making. We’re pushing these efforts stronger, and stronger every year. But every family is different. So we can only do what we can.”

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