The chief executive officer of the Durham Housing Authority (DHA) said this week that his agency will meet with residents of the city’s oldest public housing complex to discuss its fate and what it could mean for them in the future.

DHA CEO Anthony Scott offered reassurances that a recovery agreement that the agency has reached with the U.S.  Department of Housing and Urban Development (HUD) to “reposition”  McDougald Terrace and remove it from HUD’s public housing program does not mean its residents will have to find other places to live in an increasingly unaffordable housing market.

Scott on Monday outlined the DHA’s affordable housing plan over the next 20 years during a joint meeting with the Durham city council and members of the DHA board.

Scott said DHA staffers will, in the coming weeks, meet with McDougald Terrace residents to discuss whether the more than 300 units will be renovated or torn down and rebuilt.

Scott added that one of the options under consideration while McDougald Terrace is renovated or demolished will be to temporarily house McDougald Terrace residents at the Lincoln Apartments, a DHA-owned housing complex at Fayetteville Street and Cornwallis Road.

Scott said a preliminary analysis of the mammoth property that was built in 1954 indicates it will cost more than $53 million over the next 20 years to maintain the property, along with $2 million that’s “needed immediately.”

Scott said that with McDougald Terrace needing $53 million for renovations and upkeep over the next two decades—and with three other properties at Oxford Manor, Cornwallis, and Club Boulevard all failing inspections this year—the $15 million that the DHA currently has in capital funding for repairs at all of its properties “will barely make a difference.”

Scott has long maintained that HUD has underfunded public housing authorities across the country by about $70 billion and that it’s “an indication of how bad the problem is with America’s public housing stock.”

“That [$70 billion] figure, by the way, equates to about $70,000 per [housing unit] that public housing authorities should have received, but that the U.S. Congress has chosen not to fund over the years,” the DHA leader told the INDY last month.

“A lot of the issues that I talk about are not just related to Durham,” Scott told city council and DHA board members, city staffers, and members of the public during the virtual meeting. “These are issues that are taking place around the country and at all housing authorities.”

As  the INDY previously reported, the DHA entered into a recovery agreement with HUD following a 2018 public housing assessment that rated all of the local housing authority’s properties as “troubled” based on the financial condition of the agency, management, physical inspections, and available capital funding.

Scott said in February and reiterated on Monday that the rating happened before the agency spent $6 million to address brick-and-mortar concerns, with $3.7 million spent on health and safety repairs since the 2020 carbon monoxide crisis.

DHA agreed to submit a redevelopment plan that calls for the “repositioning” of McDougald Terrace by February of next year. If HUD approves the plan, local public housing officials’ options include “substantial renovation” of the property—a so-called “voluntary conversion”—based on a physical needs assessment, according to a two-page letter the DHA made public that outlines the terms of the agreement.

“Relocation will be necessary, phased at best,” DHA officials stated in a letter made public about the recovery agreement.

The other option calls for issuing “tenant protection vouchers” to McDougald Terrace families and demolishing the city’s oldest and largest public housing complex, removing the property altogether from the federal housing program.

“In other words, HUD no longer wants McDougald Terrace in the Public Housing Program, which is not something we disagree with,” Scott told the INDY in an email last month. “The age and funding methodology does not serve a property like McDougald Terrace well. Other programs within the HUD tool box will allow much-needed renovations and/or redevelopment to benefit our residents.”

At the behest of city council member and mayor pro tem Mark-Anthony Middleton, Scott clarified how repositioning McDougald Terrace and removing the property from the public housing program might affect its residents.

Middleton asked Scott to “demystify the process around McDougald Terrace” and clear up the perception that “repositioning is part of a continuum” to move the current residents away from the property and permanently remove it altogether from the federal public housing portfolio “in perpetuity” before selling it to a private developer, or even nearby NC Central University.

Scott said the DHA had always planned to reposition all of DHA properties out of the public housing program, largely because capital support for public housing was “woefully underfunded” over the past three decades in comparison to housing choice vouchers that have been “consistently funded at 90 to 100 percent over the same time period.”

He added that there will always be housing at McDougald Terrace, and its current residents will certainly have a right to return.

Scott explained that one of the likely options that may take place at McDougald Terrace is a Rental Assistance Demonstration (RAD) voluntary program that seeks “to preserve public housing by providing Public Housing Agencies (PHAs) with access to more stable funding to make needed improvements to properties,” per HUD. 

The DHA chief said that housing vouchers are based on the rent in a particular area to help determine “what those rents will be and ultimately what your subsidy will be.”

“We’re getting out of the public housing program [but] we’re still going to have 340 units that will be in McDougald Terrace in some capacity,” Scott said.

Middleton pushed for more clarification.

“So what you were paying before this redevelopment occurred, when it’s rebuilt, will you still be able to live there at that level?” the council member asked. “If your income hadn’t changed, provided all the other factors remained the same?”

Scott answered by pointing to the 447 units that will be torn down and replaced as part of the DHA Downtown Neighborhood Plan, and the agency’s commitment to constructing affordable housing that remains in the downtown district and not pushed out to the edge of the county.

“It was important that those units remain downtown because that’s where they’ve always been,” Scott said.

Similarly, Scott said, subsidized rents will remain based on 30 percent of a renter’s income.

“That has always been the case and that will remain the same,” Scott said. “So, rents can’t just go up just because it’s a new building.”

“And one other really critical thing,” he added, “you can’t be re-screened. So, if you are eligible for public housing now, you will be eligible for that unit whenever you come back, or wherever you go to.”

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Follow Durham Staff Writer Thomasi McDonald on Twitter or send an email to tmcdonald@indyweek.com.