The U.S. Department of Housing and Urban Development (HUD) on Wednesday announced it had closed on a $33.3 million deal with Atlanta Housing (AH) to renovate a Castleberry Hill apartment complex the local housing authority co-owns with H.J. Russell & Co. and preserve its hundreds of below-market rentals.
Less than a mile south of Mercedes-Benz Stadium, in a fast-developing area straddling downtown and the Westside where affordable housing is disappearing fast, the Villages at Castleberry Hill is made up of 450 residences.
Of those, 284 will be renovated at an estimated cost of $117,000 each, financed by a loan and tax credits. The other units, making up about a third of the complex, were already refurbished in 2018.
The deal will also increase the number of units priced at below-market rents from 60% at present to 80% for the 284 units in this renovation phase.
Post-rehab rents for a one-bedroom unit will start at $671 for units accepting public housing vouchers and rise to $1,094 at market rate. For a three-bedroom, rents will start at $927 for units with housing vouchers and go up to $1,429 at market rate, according to HUD.
For the 228 units currently priced below market, 40% accept public housing vouchers and the other 20% offer reduced rents thanks to low-income housing tax breaks received by the public-private partnership. They’ll be preserved as affordable units through a Rental Assistance Demonstration (RAD) agreement between HUD and AH.
The RAD makeover will also convert 57 of 113 market-rate units scheduled for renovation into below-market units, according to HUD.
That will classify 80% of the 284 units targeted for renovation as affordable. Of those, 114, or 40%, will continue to be HUD-subsidized apartments, where tenants use public housing vouchers to pay based on their income, and 114, or another 40%, will be low-income housing tax credit units, where the rental rate is reduced to make the units affordable, according to HUD spokesperson Shannon Watkins. The other 56 will remain market-rate units.
Built in 2000, the Villages at Castleberry Hill was due for an update, Watkins said, calling the plan “a strong investment to ensure the property is maintained well and remains affordable to low-income families long-term.”
The renovation will upgrade heating, cooling, and hot water equipment, replace windows and siding, and completely rebuild kitchens and bathrooms.
Despite the project’s scope, no residents will be displaced to make way for construction crews, according to HUD—a process that has proven especially challenging in the ongoing Forest Cove apartment complex saga.
Watkins said that instead temporary relocations will take place within the complex. “There will be some relocation on-site,” she said, “with residents moving temporarily into vacant units on the property while work is done in their homes.”
Construction should kick off later this month and is expected to take up to 20 months to complete, according to Eugene Jones, AH’s president and CEO.