Just as residents have been settling into their new units at Bellevue Village, at least eight families were served with notices to vacate their homes.
Constructed in 2005 by Florida-based Reliance Housing Foundation — the same company which is planning to build an affordable housing community in Calabash Boom — in conjunction with the V.I. Housing Finance Authority, (VIHFA) Bellevue was touted as an answer to the homeownership crisis on St. John.
After an internal audit revealed several tenants were making too much income to qualify for units, Reliance representatives asked tenants to “immediately vacate the unit and surrender the keys,” in a letter dated May 16.
In order to qualify as Bellevue tenants, residents were required to demonstrate their annual income was 60 percent or less of the Area Median Income, which, when the units were offered in 2005, was $37,350.
Income Requirements
Almost two years later, the Area Median Income is still exactly the same.
The affordable housing community consists of one-, two-, three- and four-bedroom units with occupancy limited to two people per bedroom.
A single person household can bring in no more than $22,860; a two person family no more than $26,100; a three member household can make no more than $29,400; a four member family no more than $32,640; a five person family can have a maximum income of $35,280; a six person family $37,860; a seven person household $40,500; and an eight member family has to make $43,080 or less.
Reliance receives millions of dollars in tax credits for operating the affordable-housing community and tenants must meet federal and local requirements, or the company risks losing those credits, explained Kathy Strom, Reliance’s vice president of property management.
Local Auditor
“We are a low-income housing tax credit community and are therefore required by I.R.S. law to maintain income lists for the people who rent on the property,” said Strom. “We have to certify this income on an annual basis. People have to show us their income on an annual basis by giving pay stubs, tax returns and other documentation.”
In addition to the IRS, the VIHFA employs a monitor who annually audits Reliance on the income certifications, Strom added.
“During that audit process, if it comes to light that someone moved in under false pretenses, we are required to inform the tenant that they can voluntarily vacate the premises before we take any action,” Strom said. “We don’t want them to incur additional costs of an eviction proceeding, but we are what’s called a Section 42. When you are a Section 42 property you must rent to people within certain income brackets.”
Tax Credits at Stake
“If tenants go over the standards, we could potentially lose our tax credits,” Strom continued. “We could lose over $200,000 per unit. It’s a significant amount of money.”
Although the vice president of property management would not comment on the exact number of tenants who are being asked to leave, the number is less then 15 percent of the 72 total units at Bellevue, according to Strom.
While the Reliance letter informed tenants they had to vacate their units no later than May 31 — giving residents only two weeks to move — extra time can be arranged, Strom explained.
“Before sending the letters I talked to all of these people on the phone to tell them that this information had come to light,” said Strom. “The letter asks for their cooperation and if they call us we can give them extra time. We need the assurance that they are cooperating.”
“We have to be able to show the auditor that we have made contact with the tenants,” she added.
Security deposits will be returned to residents who contact Reliance and make arrangements to vacate their units as long as the units do not need repairs, according to Strom.
Reliance is dedicated to providing affordable housing and must ensure their tenants meet requirements, Strom explained.
“Hands Are Tied”
“It’s our goal to make sure that we are housing people who meet these affordable housing criteria for the property,” she said. “If they don’t and that information comes to light, our hands are tied.”
There will be no problem filling the soon to be vacated units, Strom added.
“We keep a rolling waiting list at all of our properties,” she said. “We have a waiting list that goes back to the initial lotteries and as people come in and inquire, we add them to the bottom of the list. If a unit becomes vacant we go to the next person on the waiting list to see if they are still interested.”
Plenty of Potential Tenants
“Typically we don’t have a problem finding new tenants,” Strom said.
The original Gift Hill site consisted of 36 acres. Reliance sold eight of those acres to the Gifft Hill School for its new campus and donated two and a half acres to the St. John Community Foun-dation to construct a St. John Civic and Cultural Center.
There has been no work on the planned Cultural Center, however, for almost two years.