Federal officials are considering ending low-income housing subsidies to Waco Parkside Village apartments and relocating its residents after the complex failed its third consecutive inspection.

Regional U.S. Housing and Urban Development officials met with about 100 tenants Wednesday to discuss the future of the 200-unit Section 8 complex at 1323 N. 9th St.

The complex, owned by the bankrupt American Housing Foundation, earned a score of 25 out of 100 in a March inspection. It has not passed an inspection since 2007.

The Fort Worth-based HUD officials said leaders in Washington will have to make the final decision, but one of two severe enforcement actions is likely.

One would be to accelerate the complex’s federally insured mortgage, forcing the property into foreclosure. Then it could be resold with a stipulation that it be rehabilitated, said Michael Backman, HUD regional multifamily hub director.

The other option is to cancel HUD’s low-income housing contract, which pays for most of its tenants’ rent.

The estimated 150 families who live at Parkside would be given portable Section 8 vouchers. Waco Housing Authority would work to house them in apartments and single-family houses anywhere in McLennan County or adjacent counties.

“In our community and tenant meetings, the overwhelming local support has been for the abatement option,” Backman said. “A lot of tenants voiced a preference for having a voucher as a much more immediate form of assistance. . . . The comments I heard were, ‘Can you do this sooner rather than later?’ ”

Backman said it was premature to announce when the vouchers might be available, because no final decision has been made.

Community leaders who met with Backman last Friday said the relocation process could start in about 60 days if Washington leaders approve.

The Friday meeting included Waco’s mayor and city manager, as well as representatives of American Housing Foundation, the Texas Department of Housing and Community Affairs, local schools, the Brook Oaks Neighborhood Association, the Waco Housing Authority and nonprofit organizations such as Waco Community Development Corp.

“It’s encouraging that HUD is taking care of the folks who live there,” said Waco CDC executive director Mike Stone, who has been an advocate for action on Parkside Village. “They were not being served like they were supposed to be.”

Waco Housing Authority executive director Gary Moore said if the contract is abated, he expects the residents can be relocated quickly. The estimated 150 Section 8 housing vouchers for Parkside residents would be an addition to the Waco Housing Authority’s usual allotment.

The relocation would have an impact on Brook Avenue Elementary School, which serves 63 students from Parkside, and West Avenue Elementary, which serves more than 20.

Brook Avenue Principal Jessica Hicks said 17 percent of her students live at Parkside, and the school district will develop a plan to accommodate those students next fall at other schools, possibly with an adjustment to attendance zones.

Hicks said she hopes the relocation will result in a safer and healthier environment for children who now live at Parkside.

“It will be tough planning, but in the long run it will be best for them,” she said.

Brook Oaks Neighborhood Association President Robert Jackson said he would prefer that Parkside be sold and renovated, as the nearby Villages complex was in the early 2000s.

“I would hope to see the same situation that turned around the Villages,” he said. “I would not want to see them closed.”

He said he fears the apartments could become a vacant eyesore that could blight the neighborhood for years.

Backman said if the low-income contract is abated and tenants were offered vouchers, the current owners wouldn’t necessarily have to close Parkside Villages.

However, American Housing Foundation officials have said they have no interest in continuing to own and operate the complex because the company is bankrupt and owes more on the property than it’s worth.

AHF officials declined to comment Thursday.

Backman said it’s too early to speculate on who will become the ultimate owners of Parkside Village.

Stone, of Waco CDC, said it may take time to sort out ownership issues at Parkside.

He said AHF limited partners, including JPMorgan Chase, have a stake in the outcome, as do the lender and the purchasers of federal tax credits that helped renovate the property in the early 2000s.

But if the apartment complex is abandoned, he said he thinks it won’t be a blight for long.

“I don’t think that in the long term HUD will let that happen,” Stone said.

jbsmith@wacotrib.com

757-5752

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