Minvilla Manor will be located at the corner of Fifth Avenue & Broadway, adjacent to The Salvation Army, VMC, and KARM. Minvilla is an historic rehabilitation of townhouses into affordable housing, and it’s expensive, but it is also feasible and will act as an anchor property in an area with much potential. It is almost an understatement to say that concentration of services is also an issue at this location. The three biggest providers of services to people who are homeless will thus be located within a block of each other, and Minvilla will be in their midst.
Why here?
In 2002 the City of Knoxville condemned the structure, and an historic overlay was placed on the building to prevent its demolition. (This action came at a time when many in Knoxville were disturbed by the demolition of buildings that were architecturally and/or historically significant. Knox Heritage and other organizations sought to protect these structures through historic preservation.) Over the next three years, several developers considered market-rate housing or commercial use projects for Minvilla, but could not make their numbers work.
In fact, so intent was the City of making something good out of the Fifth Avenue Motel that it made almost half a million dollars in CDGB funds available to the developer who would come forward with a viable proposal for its rehabilitation. Those funds were not initially directed towards any particular developer, agency, or anyone else in particular. Even with this incentive, developers could not make the numbers work on a market rate project at the Fifth Avenue Motel.
VMC came forward with the only viable plan that has been put on the table to date. They proposed using the CDBG funds along with $400,000 raised from other sources, plus Historic Tax Credits and Low-Income Housing Tax Credits to create affordable housing at the Fifth Avenue Motel. Their developer at that time, who had extensive experience developing affordable housing, assembled the complex funding package, the only viable one anyone has yet to bring forward.
So, in March 2006, VMC used $132,000 of that $460,000 CDGB grant from the City of Knoxville to purchase Minvilla. VMC will renovate the historic structure to provide permanent supportive housing in alignment with the Ten-Year Plan to End Chronic Homelessness. Again, VMC’s project is feasible because it will develop low-income housing at Minvilla, which makes it eligible for both historic tax credits and low income housing tax credits.
Those credits are very important to this project. Due to several years of neglect by previous owners, Minvilla is in a very deteriorated condition. That means its preservation will be expensive. The adaptive use of a building for a different uses pose some other unique challenges, and certain requirements related to the historic character of the building add expense, too. However, those additional costs are more than absorbed by the considerable equity made possible only by historic designation.
Why not do more PSH cheaper elsewhere?
People sometimes ask us, “Why not take this money and spend it to purchase already-existing apartments and other properties and turn them into PSH developments? This would certainly be cheaper, and we could house more people faster this way. Why don’t we abandon Minvilla and do PSH somewhere else?”
These are fair questions. Minvilla is expensive compared to new construction for a comparable use. Its expense is mostly due to several years of neglect by previous owners, neglect which led to its deteriorated condition; the unique challenges posed by the changes the structure will undergo as it’s adapted for its new use; and certain requirements related to the historic character of the building. Those additional costs are more than offset by the considerable equity made possible only by historic designation, but even so, some people ask, “Why not take the money going towards Minvilla and put it towards more, cheaper, readily-available units?”
Here’s why:
- The City wants to preserve Minvilla. VMC brought forward the only viable approach to doing that in approximately three years on the market. Other developers tried and failed to make their numbers work, but VMC’s project made preservation a real possibility.
- Minvilla Manor serves two purposes, not just one: historic preservation AND permanent supportive housing. The community had a strong enough desire to save this building that City Council voted to approve a significant CDBG grant for its preservation, and to the best of our knowledge, that was before VMC was in the picture. Rehabbing the building for use as PSH enabled access to more than $2,000,000 of funding that would not have been available for any use other than affordable housing.
- Most of the funds aren’t portable. Minvilla’s total project cost is right around $7,000,000. You can’t spend most of that money elsewhere. About 80% of it is tied specifically to the Minvilla Manor project, and the funding that’s most firmly attached is some of the most challenging to get in the first place. Click here for a PDF version of a table that compares dedicated versus portable funds in Minvilla’s financing.
- We DO look at lower-cost properties than Minvilla. Frankly, that’s pretty easy to do, because Minvilla is unique. Some people in the community have suggested specific properties. We’ve approached several different owners concerning several existing properties that we think might be appropriate for PSH, but we have not been able to come to terms with any of them yet. Keep in mind, too, that the simple fact that an apartment complex is super-cheap does not mean that it’s suitable for permanent supportive housing.
- We need to grow our capacity to deliver good case management. This is important. If we acquire a large number of PSH units and place residents in them before we have built a good case management infrastructure and assured its funding going forward, those residents will fail. They will not remain housed. This is why “housing more people sooner” won’t work. In PSH, housing and support are linked. You don’t have PSH without housing, and you don’t have it without case management. The case manager relationship is essential to a resident’s success in housing, and that is one reason PSH has to be developed at a pace that makes sense.
Concentration of services
This area is sometimes referred to as Knoxville’s mission district because three of Knoxville’s largest service providers are located there, and because so many homeless people congregate there. The homeless people who congregate in this area don’t always stay there. Sometimes they disperse to the neighborhoods within walking distance from this area, where they are sometimes a very disruptive presence. People who live in these neighborhoods bear a disproportionate share of the burden of dealing with the consequences of a broken approach to addressing the issue of homelessness.
Neighborhood opposition
Some people oppose Minvilla because of its location in this area. Their opposition seems to be basically threefold.
- Some people see Minvilla as an expansion of homeless services in an area that is already weighed down with a disproportionate number of homeless people. Their concern is that Minvilla will simply bring more people into the area who will panhandle, engage in petty crime and other nuisance behavior, and intimidate people who would otherwise be attracted to the area’s revitalizing environment.
- Some people oppose Minvilla because they believe its residents are doomed to fail because of the corrupting influence of their surroundings in the Fifth & Broadway corridor. Their argument is that residents of permanent supportive housing are fragile, susceptible to the bad influences and bad relationships of the street. They characterize the area as a kind of ghetto which inevitably will bring down any Minvilla resident.
- Some believe Minvilla will have a negative effect on their property values.
A different point of view
We can understand these concerns. It’s not our intention to dismiss or minimize them. We do want to set some good information next to them so that people in our community can be more objective about Minvilla.
When does a person stop being homeless?
Most of you reading this probably have graduated from high school. Do you still refer to yourself as a high school student? None of you reading this was born with a job, but you probably have one now. If you do, you probably don’t think of yourself as unemployed.
Minvilla is not an expansion of homeless services. It’s permanent supportive housing for people who are disabled. Residents will hold leases and pay rent, same as residents at any apartment complex. Such people are not homeless, not by any definition, and there is good evidence from other our own and other communities that they will not continue to behave as though they were. When chronically homeless people end their homelessness by becoming residents of permanent supportive housing, their use of emergency services declines greatly. They don’t get arrested for public intoxication and other nuisance behavior nearly as frequently, and they don’t spend nearly as much time in jail. Why? Because they have a safe, secure place to call their own, and because they are working on their issues with their case manager. They’re no longer homeless, and they don’t act homeless.
People who have left homelessness and become housed should not continue to bear the stigma of homelessness. Neither should their homes.
Failure is the exception, not the rule.
Residents of Minvilla are not going to be doomed by their surroundings in the Fifth Avenue & Broadway corridor. Consider this: The Salvation Army operates transitional residential programs right next door to Minvilla. They’ve been doing so for years with great success. Apparently, people who want to change their lives and who get the right kind of help can succeed, right here in Knoxville’s most concentrated area of service delivery, in spite of the negative external influences.
Nationwide, residents who have left chronic homelessness for a changed life via permanent supportive housing have a better than 80% success rate in staying housed. Is this perfect? Of course not. Is it a huge improvement over the status quo? Of course it is. PSH is the best way to help people leave chronic homelessness and maintain their success in housing. Is there any reason to believe that Minvilla should not deliver similar success for its residents? No, there’s not.
Property value is retained and enhanced.
The effects of PSH developments on property values have been and will continue to be studied. These studies do not support the contention that PSH causes a decline in neighboring property values. Some studies have shown a negligible effect and others have shown a positive effect on property values. You can look at some of them below:
Connecticut Supportive Housing Demonstration Program
Philadelphia Inquirer: Project HOME confounds property value naysayers