Davidson Housing Coalition to lower rents with new fund

Rent is slated to increase Jan. 1 for dozens of families living at The Bungalows in Davidson, but in the new year residents may get a little extra help with that payment.

The Davidson Housing Coalition, one of three entities managing the 32-unit affordable housing site, said it will create a reserve fund to offset rent increases. The reserve is coming from another fundraising account for the coalition’s affordable housing programs.

Word of this new assistance, announced on Dec. 13, is the latest episode following a confusing series of letters residents received from management about rent increases and the property being sold. The past several weeks have had many feeling in limbo, worried how they will make rent and their futures.

But they spoke up.

Shelli Roberts, a Bungalows resident for a decade, said the new reserve fund is the result of residents across Davidson using their voices — calling and emailing property management.

Last week dozens gathered for a community meeting to address concerns. But the previous lack of transparency has left her unsure the reserve fund would truly help, Roberts said.

“I don’t know how long it will benefit the people living in the Bungalows,” she said.

Residents learned in early December rent would increase by $50 in January, the highest increase in at least five years. This came after they first were notified in November rent would go up by $150. Even prior, in September, residents were told the affordable housing complex would be listed for sale early next year — with little explanation.

Roberts said residents were informed the $50 increase was due to a shortfall in funds for the DHC and Mosaic Development Group, the two nonprofits who oversee the property. Reps from the nonprofits declined to name the third majority owner.

The reserve fund will use money raised through the coalition’s Holidays for Hope and Housing fundraiser to assist residents with the rent increase, Margaret Martens, chair of the Davidson Housing Coalition’s Board of Directors, said.

The annual fundraiser has run for over a decade and is the coalition’s biggest fundraiser, Martens said. A luminary fundraiser kicks off after Thanksgiving and runs through the holidays. People purchased candles to support the coalition’s initiatives, which were lit and decorated the town’s sidewalks on Dec. 17.

Funds raised support the coalition’s programs such as its financial counseling program and HAMMERS program, which provides critical repairs for homes, Martens said. The fundraiser will continue through the Christmas holiday.

The coalition has not ironed out the details for the new reserve fund, outside of it solely being for residents of the Bungalows in 2023, she said.

Residents will be expected to pay full rent on Jan. 1. Once the fund is established the coalition will retroactively help those who apply for assistance, Martens said.

It is unclear how much money has been raised. Martens said the coalition is also working out what percentage will go towards residents of the Bungalows.

“We’re still in the process of putting together this program,” she said.

The Bungalows’ future

The property’s eventual sale will come amid changes in the housing coalition’s leadership. Martens said the executive director Gerald Wright is resigning.

“It’s an amicable separation,” she said.

Wright’s final day will be Dec. 30, she said. The coalition is hoping to find a new director within the next two months, Martens said. Wright and board members will work together in the transition process, she added.

Wright said his decision to step away is for business and personal reasons. The Bungalows’ current situation did not affect his decision, he said.

The North Carolina Housing Finance Agency caps income for the Bungalows residents at 50% of area median income. In a news release last week, DHC announced the new reserve fund will help keep the cost of rent below 50% AMI.

But doing so affects its bottom line.

“These extremely low rents do not cover the cost of managing and running the units,” per a news release from the Coalition. “This year, the shortfall — difference between our actual costs and rent income for the Bungalows — is around $90,000.”

Martens said most rents at the Bungalows are closer to 30% AMI.

The coalition is also still in negotiations with the majority property owner to get the listing agreement signed and intends to buy that party out, she said. Mosaic Development Group also is expected to exit the partnership once the sale is complete.

“It’s our great desire to have managing ownership of the Bungalows,” Martens said. “We’re looking at all of our options.”

DJ Simmons covers race and inequity for The Charlotte Observer. A South Carolina native, previously he worked for The Athens-Banner Herald via Report4America where he covered underrepresented communities.