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By Jeremy Turley and Yanqi Xu, Flatwater Free Press
The rows of red brick buildings wedged between Spencer and Bristol streets once represented North Omaha’s best attempt at tackling a post-war housing crunch. Now abandoned, gutted and graffitied, they await the wrecking ball.
On the other side of Highway 75, the site that once hosted the remainder of the Spencer Homes public housing development is alive with activity as construction workers raise the walls of a brand new cluster of apartments.
The bid to reinvent the neighborhood is among the first in a series of major moves planned by the Omaha Housing Authority to transform the city’s aging public housing stock.
OHA’s property portfolio – assembled in a bygone era – has become increasingly costly to run for a federally funded agency on a perpetually tight budget. Many of the agency’s large apartment complexes and smaller homes have serious maintenance needs, according to agency documents.
Those issues can become legal concerns: Two lawsuits filed against OHA in recent weeks allege hazardous conditions in the agency’s housing complexes.
Some properties, like Spencer and Southside Terrace, are set to be replaced by new mixed-income housing using federal grants. Others could be converted to a different type of subsidized housing or sold onto the private market.
Those plans follow a broader push by housing agencies away from traditional public housing and toward other types of affordable housing. Congress’ chronic underfunding has created a massive maintenance backlog at local agencies throughout the country, housing policy experts say.
Some advocates worry OHA’s plans could create added hardship for displaced residents, though the agency noted it helped relocate the vast majority of Spencer tenants. In the long run, some fear the changes could shrink available housing options for Omaha’s poorest residents.
OHA still plans to retain some public housing for extremely low-income residents who are better served by its simplicity and affordability, said OHA CEO Joanie Poore. But the agency must deviate from the previously charted course to ensure a healthy financial future, she said.
“If changes don’t occur, the result (at an unknown time) … is financial insolvency,” Poore said in an email.
Mounting maintenance issues
The vision for government-subsidized housing in Omaha has changed continually since local officials established OHA in 1935.
Early on, leaders opted to build barrack-style row houses and apartment complexes, like Spencer Homes, that concentrated many of the city’s poorest tenants in a handful of neighborhoods on the north and south ends of the city.
Around the middle of last century, OHA added a series of high-rise towers, mostly geared toward older residents. Ten such complexes remain in the agency’s collection today.
In the 1980s and ’90s, former OHA Director Bob Armstrong, seen as a maverick by his peers, drove a charge to buy single-family homes across the city. The aim: Give poor tenants a chance to live in mixed-income neighborhoods.
Many buildings built and bought over the decades have racked up maintenance issues that federal allocations won’t fully pay to fix, agency leaders said.
Nearly all of the high-rise buildings need major plumbing upgrades, and close to three dozen single-family homes and townhouses need roof repairs, according to OHA renovation plans.
In a lawsuit filed against OHA last month, a woman alleged that the agency’s failure to provide heat to her daughter’s Southside Terrace apartment compelled the family to use their oven and stove for heat, which may have caused a fire that killed her two grandsons in 2022. The unit was not equipped with fire exits or working smoke detectors, the complaint alleges.
The son of an Underwood Tower resident recently filed a separate lawsuit against the agency alleging that his father’s apartment doesn’t have heat and is infested with mice, roaches and bedbugs.
OHA attorney Brian Hansen declined to comment on the lawsuits.
Meanwhile, OHA’s 2024 budget projects an overall $1.17 million loss. The plan is to beat the budget projections in reality, Poore told the agency’s board last month.
Several older OHA-owned properties operate at deficits totaling hundreds of thousands of dollars each year.
The cost of operating and maintaining each property will help inform whether OHA keeps or sells it, Poore said. The agency will prioritize the preservation of properties in areas with less subsidized housing, she added.
Rebuild, convert or sell
In the past five years, the U.S. Department of Housing and Urban Development has awarded two major grants to create new neighborhoods in the place of old public housing in Omaha.
OHA and the city received $25 million in 2019 to replace the 111-unit Spencer Homes with several mixed-income housing developments.
The finished product will include apartments, townhouses and single-family homes. At least 111 units will be subsidized through rent vouchers, while the rest will be a combination of low-rent “affordable” units and market-rate housing, Poore said.
In 2022, OHA got a $50 million grant to raze the 356-unit Southside Terrace and build mixed-income housing.
The first relocation of residents – about a dozen households – is slated to be complete by the end of January. The project will happen in phases, with construction tentatively scheduled to be finished in 2028.
For both developments, OHA will own the underlying land, but it plans to contract out for property management, Poore said.
When massive grants aren’t in the cards for a property, housing authorities often turn to a HUD program known as Rental Assistance Demonstration, which allows units to be converted from public housing to voucher-based housing, also known as Section 8.
The popular program eases some administrative burden for the agencies and represents their best chance at fixing up old buildings, said Alex Schwartz, a professor of urban policy at the New School in New York.
OHA leaders hope to use the program over the next few years to convert a series of smaller apartment complexes, including the 30-unit Cherry Tree Apartments in northwest Omaha and the 15-unit Frances Court and the 14-unit Alamo Apartments in central Omaha.
The agency cannot directly own the properties once they’re converted. In most cases, it plans to transfer control of the properties to a wholly owned nonprofit called River City Housing.
The amount tenants pay in rent shouldn’t shift much when a property is converted through RAD, though it’s possible the property management could change – for better or worse, Schwartz said.
Properties that OHA doesn’t intend to keep in its portfolio can be offloaded to the private market, generally with a condition that the units remain “affordable” in some way.
The 35-unit Securities Building was sold in 2022 to a company run by Los Angeles-based landlord Mark Habibi. Under a land-use agreement, the new owner of the downtown building receives tax credits for renting to tenants with below-average incomes.
OHA plans to sell North Omaha’s Ernie Chambers Court, which contains 32 public housing units and 38 other low-rent units. Planning documents refer to a potential buyer that would house refugee families on the historic property, but Poore declined to comment further.
The agency also plans to sell off about 40 homes in northern Omaha, but Hansen said it aims to retain most of the roughly 450 single-family houses owned by OHA and its affiliates.
The agency is reviewing options for transitioning its high-rise towers away from public housing, but it does not have any immediate plans to do so, according to planning documents.
OHA’s proposed changes would reduce the amount of public housing, but Poore said the “total affordability” of housing in the city could increase through the addition of other subsidized housing and income-restricted apartments.
The agency has already faced some criticism as a period of prolonged transition begins.
North Omaha community activists castigated the housing authority and the city last month over their failure to demolish the abandoned Spencer Homes East development in a timely manner, the Omaha World-Herald reported. Tenants vacated their apartments more than 18 months ago, but elevated demolition costs have kept the run-down buildings standing much longer than expected.
OHA’s moves also could leave the city’s poorest tenants, many of whom rely on public housing and couldn’t afford other types of affordable housing, with fewer options, said Sarah Saadian, a Washington-based policy advocate with the National Low Income Housing Coalition.
The agency needs to ensure Omaha’s poorest tenants can actually afford the affordable housing replacing lost public housing units, Saadian said.
Agency leaders and policy experts agree that local housing authorities cannot come close to solving the affordable housing crisis on their own, especially without congressional cooperation.
If Congress stepped up to fully fund public housing, communities like Omaha wouldn’t have to choose which subsidized housing to keep or discard, Saadian said. Lawmakers whiffed on a chance to approve $65 billion for public housing renovations when they failed to pass the so-called Build Back Better Act several years ago, she noted.
“What we really need is a commitment from the federal government to make sure everyone has access to an affordable home,” Saadian said.
U.S. Rep. Don Bacon, an Omaha-area Republican, said he has supported numerous efforts to bolster the city’s affordable housing, including by helping secure the grants to remake Spencer Homes and Southside Terrace.
Bacon voted against the Democratic-backed Build Back Better Act, which he said featured expensive, overly burdensome provisions that would have hurt middle-class families and the American economy.
“The ultimate solution does not lie in more government owned homes, but we need to incentivize builders and local communities to build more affordable housing,” Bacon said in a statement.
Making way for change
When OHA received the federal grant to tear down Spencer Homes, the implication for residents was clear: it’ll soon be time to leave.
Former Spencer Homes tenants could qualify for vouchers and other benefits and have first preference if they wished to move back to the community, OHA’s relocation consultants said at a meeting in 2021.
Residents were expected to move out by 2022 and find their own housing, as the new mixed-income apartments would not be completed before 2023, the consultants announced.
It would have been better if OHA waited for developers to finish building new housing first, rather than forcing residents to move out and find a landlord that accepts vouchers or a new public housing unit, said Gwen Easter, who’s helped refer Omahans to housing resources through her nonprofit Safe Haven Community Center.
Easter believes many of these low-income tenants had a hard time finding a place with a landlord willing to take vouchers.
“I know these families didn’t all stay in North Omaha – they couldn’t have because there’s not been enough housing built,” Easter said.
OHA said residents from 91 of the 111 units at Spencer were relocated to other housing.
The agency is set to take on a significant relocation effort in the next few years as it vacates the more than 350 public housing units at Southside Terrace. OHA will try to “share what we know when we know it” to give tenants as much certainty about the plans as possible, Poore said.
If Francesca Patterson’s relocation experience is any indication, the forced move could be rewarding.
Patterson said she and her four girls were probably some of the first Spencer Homes residents looking for a new place.
She found a temporary spot with her housing voucher, and then moved into one of the new mixed-income buildings last year. The new apartment is a major upgrade over Spencer – her girls even have their own bathroom, she said.
“I love it here. It’s spacious, it’s quiet,” Patterson said. “It’s much more room for me and my girls.”
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