This is the 10th article in the Tribune’s series on affordable housing and follows up on our two previous stories about the Department of Housing and Urban Development. 

 NASHVILLE, TN – Nashville is segregated like most American cities. For decades East and North Nashville was where African Americans lived. Some middle class African Americans moved to Bordeaux in Metro’s District 1.

Senator Brenda Gilmore represented District 1 on the Metro Council from 1993-2003.  “It was rural whites and Bordeaux was African American,” Gilmore said. “Joelton is still basically white. Bordeaux is changing but I think it has to do with displacement more than anything,” she said.

Senator Brenda Gilmore served on the Metro Council from 1993-2003.

Gilmore has lived in Nashville for 49 years. She said when she was on the Metro Council districts were predominantly Black neighborhoods or predominantly White neighborhoods. “I don’t know that Nashville has changed that much,” she said.

MDHA built its first public housing projects in 1938-39. The new mixed-income developments MDHA is building are replacing the old projects like Cayce Place and Napier Place. They are located in those same neighborhoods. According to MDHA Communications Director Jamie Berry, about 80% of MDHA residents are African American and they make up approximately 80% in the new projects.

“They seem to be doing a good job,” Gilmore said. “I think there is a sincere attempt to make sure that disadvantaged people are not being displaced and that they live in a quality safe housing environment.”

In 2012 HUD created the Rental Assistance Demonstration (RAD) program. The idea was to convert public housing projects into public-private partnerships and build new mixed-income developments without much federal investment. HUD gave local agencies like MDHA the land title where older projects had been built. They could rehab or tear them down and have private developers build new ones.

“I believed we could build a staff and we would develop ourselves. We would keep the development fee in those development deals and use it to build the next one,” said former MDHA Director Jim Harbison.

Harbison is ex-military. He grew up poor and wasn’t about to turn down HUD’s offer so he accepted local ownership of Nashville’s Section 8 housing. Some of this housing was 80 years old and so he inherited a lot of headaches but, nonetheless, Harbison converted all MDHA properties to the RAD program by the time he left MDHA last year.

Former MDHA Director Jim Harbison transferred all of MDHA properties to the RAD program before he left last year.

“In the previous form of subsidy in public housing there were two funding streams. One was for capital which fixes things, one was for operations. When you convert, both funding streams get combined into one,” Harbison said.

He said the RAD program is more efficient and flexible.  “It’s easier because you don’t have to do the paperwork twice and the second thing is, it is adjusted up by the rate of inflation every year.” HUD’s old funding model gave MDHA the same amount for each property every year.

Not all public projects are teardowns. Levy Place, for example, was built with HUD’s Hope VI funds on the site of the old projects along lower Charlotte Avenue in 2006.

“You’re not going to rebuild that guy, right? You’re just going to keep it like it is. You get more money every year because it (OCAF, i.e. Operation Cost Adjustment Factor) goes up at the rate of inflation and it’s easier to use. …. It’s not a huge amount of money but it’s something,“ he said.

Harbison deliberately took a slow and steady approach to replacing MDHA’s old projects. The way MDHA is building new housing—a do-it-yourself approach– has created possibilities that the RAD program designers never intended.

“We have unused monies from the public housing financial stream that have not been converted to RAD but money has been appropriated by Congress. We just have to build the buildings.” Harbison said. The Randee Rogers project on Rosa Parks Boulevard is not replacing an old project. It is new construction on land the MDHA already owned. They tore down a training center to build more affordable housing there.

“We actually bring new subsidized units into Nashville and then convert them under RAD. MDHA pioneered that. HUD has a whole new program called Faircloth to RAD Conversion,” Harbison said. That program is now nationwide.

Harbison didn’t want to take on any private partners for the RAD conversions. His preferred new partners were the residents of the old projects. Edgehill residents formed a tenants’ group and met with MDHA staffers to design their new development. That master plan is complete; construction has not begun yet. (See Edgehill)

The master plans for Envision Napier and Sudekum have also been completed.

“But our rebuilding efforts are focused right now on Cayce Place,” said MDHA Director of Communications Jamie Berry.

MDHA Communications Director Jamie Berry credited Jim Harbison for the biggest transformation of Nashville’s public housing in the last 50 years.

Harbison promised tenants a one for one replacement–each family would get a new unit—but it would take time. Construction would have to proceed in stages because tenants are still living in the old units.

MDHA tenants got involved. Cayce residents first met with MDHA staff in 2013 to begin designing the makeover of Nashville’s public housing. Every couple of months MDHA hosted three meetings daily.

The Envision Cayce master plan includes 716 apartments in old Cayce and 254 apartments in neighboring CWA Plaza Apartments. Five new Cayce projects have been completed so far: Barrett Manor, Mosley on 6th, Manning Place, and Red Oak Flats have a total of 369 units. Kirkpatrick Park Apartments have 94 units on 4 acres. The old Cayce Homes sit on 69 acres.

This is what the old Cayce Homes look like. They will all be torn down and new ones built.

Before construction began on Kirkpatrick Park, tenants picked color schemes and weighed in on the exterior design. They wanted a neighborhood school; the Explore! Community School is on South 7th St. Residents wanted a park everyone could use; planning for the park will begin in 2022. They wanted a grocery store; the neighborhood is still pretty much a food desert.

Harbison had to figure out a way to pay for the new projects. He used the usual methods—Low Income Housing Tax Credits (LIHTC), HUD loans and insurance, and Payment in Lieu of Taxes (PILOT) to raise capital. He got bank loans for the rest.

When asked if mortgaging MDHA property would only delay it falling into private hands, he said, “That won’t happen because we are good managers.”

So far, Harbison’s strategy is working. A handful of MDHA’s 184 duplexes have been renovated, loans are being paid back on time, and new construction is on schedule. Forty-four new units at Red Oak Townhomes will be finished by the end of the year; 25 of those are for reserved for Cayce residents. Berry said much of the last 8 years was spent planning but after Kirkpatrick Park opened in 2019, the pace of construction increased.

By the end of the year, about 500 new units will be built and another 2680 will follow. MDHA plans to add 200 new subsidized units bringing the total to more that 3,000.

When MDHA’s new projects are finished the number will be about what Urban Housing Solutions (UHS) will develop by 2026 (2300) and about two times more than (1313 homes) Habitat for Humanity has built.

About a dozen non-profit developers build affordable housing in Nashville. In addition, MDHA has approved a Payment In Lieu of Taxes (PILOT) for 15 private developers since 2016. They have built 3,339 affordable apartments at 16 developments. Thirteen other developments are planned or are under construction with a total of 2,744 affordable units. The developers have contracts with the Tennessee Housing Development Agency (THDA) that keeps those units affordable for 15-30 years.

Compared to market rate developers, Nashville’s affordable housing providers are small fry. For every affordable unit they build, commercial developers build 10 market rate units.

Housing advocates say that only massive government investment can match the private investment that drives the real estate industry. They say the lack of public investment in housing is what brought on the affordable housing crisis in the first place.

We will next look at what plans the Biden administration has for affordable housing.