Project meets supporters, critics
By Justin Boron
Friday, March 30, 2007

Augusta public housing could be in for a makeover.

The Augusta Housing Authority’s support of a contentious, partially subsidized apartment complex proposal on Deans Bridge Road represents a shift in direction for the agency that is crucial to long-term plans to phase out the traditional “barracks-style” projects, authority member Dave Barbee said.

In the past, the housing authority has owned and rented its units to low-income tenants. But with the Deans Bridge development, it would build and own a mixed-income community that blends subsidized tenants with market-rate renters.

If the Deans Bridge development is successful, there would be more developments like it constructed throughout the city, Mr. Barbee said.

One component of the shift away from inner city housing projects is ongoing. The authority has financed more than 15 privately owned apartment complexes with bond money that requires landlords to lease to a certain number of subsidized renters. Many of them are in affluent parts of west and south Augusta, Mr. Barbee said.

But opposition to the planned Deans Bridge Road development has threatened to derail the next step in the housing authority’s vision.

Although housing officials promise that only 30 percent of the Deans Bridge community will be subsidized renters, nearby middle class residents worry a concentration of poor occupants is inevitable and will lower their property values.

Augusta has been slow to get on board with the new approach to public housing that other cities have been implementing since the mid-1990s. Macon, Savannah, and Atlanta all have embraced it, seizing on large sums of federal grants to facilitate improvements to its government housing stock, said Jacob Oglesby, the executive director of the Augusta Housing Authority.

The Department of Housing and Urban Development has encouraged the alternative approach partly because federal funding for traditional housing projects has nearly all been eliminated, said Bob Young, the department’s regional director and former mayor of Augusta.

But the push also has to do with ending segregation of the poor, Mr. Young said.

“You don’t take all the poor people and lock them in one part of the community,” he said.

Mr. Barbee said he agrees with that approach. He blamed past members of the Augusta Housing Authority, saying they were resigned to keeping the status quo.

Authority Chairman Dr. Rodger Murchison believes the conservative makeup of Augusta and its cautious attitude has slowed down its progress.

But the housing authority has faced political impediments too.

In 2004, the Augusta Commission killed a $45 million Hope VI grant that could have been used to remake Gilbert Manor. The Hope VI grants were what other cities in Georgia used to start mixed income developments like the Deans Bridge development, Mr. Oglesby said.

Meanwhile, some city commissioners have said they also will oppose the Deans Bridge development.

Sammie Sias, the president of the Richmond County Neighborhood Association Alliance, has led the residents’ opposition. He said the public has been left out of the process. He also believes crime could rise if housing officials move their tenants into his neighborhood.

However, housing officials argue the working poor aren’t necessarily all criminals.

James Zeigler, 67, said he lives in his west Augusta apartment complex on Boy Scout Road unaware that some of his neighbors are subsidized, low-income renters. But he said it didn’t matter anyway.

“It’s nice and quiet,” Mr. Zeigler said.

By TOM WALKER
The Atlanta Journal-Constitution
Published on: 03/14/07

An already nervous stock market suffered its second big loss in two weeks on Tuesday as cascading problems in the vulnerable subprime mortgage lending market heightened fears of widespread troubles in the U.S. housing industry.

The Dow Jones industrial average fell 242.66 points, or almost 2 percent, to 12,075.96 as part of a broad sell-off in the wake of news that subprime borrowers fell behind on their mortgage payments at the highest rate in 3 1/2 years.

It was the Dow’s biggest loss since plunging 416 points on Feb. 27. Trading collars designed to prevent a selling stampede were triggered Tuesday afternoon when the New York Stock Exchange composite index lost more than 180 points.

The subprime market, which serves borrowers with low credit ratings, is a relatively small part of the U.S. economy. But the housing industry assumed such importance to the overall economy after the 2001 recession that any hint of trouble creates anxiety about the possible economic impact.

The market opened with news the New York Stock Exchange suspended trading in New Century Financial Corp. and moved to delist the stock. The lender disclosed more details about its financial troubles Tuesday.

The Mortgage Bankers Association, meanwhile, reported that delinquencies increased in all types of U.S. housing loans while foreclosure rates reached an all-time high of 0.54 percent at the end of 2006.

By day’s end, the shares of subprime lenders were broadly lower.

The Standard & Poor’s financials index of 88 lending institutions fell 3.2 percent and is down 3.5 percent for the month.

Shares of Accredited Home Lenders Holding fell by 65 percent; American Home Mortgage Investment by 10 percent; Washington Mutual by 5 percent; and Countrywide Financial Corp. by 4.7 percent.

Home builders also suffered. Atlanta-based Beazer Homes USA traded at a 52-week low for the second straight day and closed down 6.4 percent, and similar losses occurred at D.R. Horton, Centex and Toll Brothers.

There was not much good news elsewhere on Tuesday to offset news from the subprime market.

The government said retail sales increased less than expected last month and, not counting auto sales, actually declined 0.1 percent compared with a January rise of 0.2 percent.

Analysts said frigid February weather was a big reason.

Wachovia economist Gina Martin also said that “ongoing weakness in the housing market is a big drag on sales of [big-ticket products] related to the home.”

Three indexes of business sentiment showed increased pessimism, with indications of a downturn in hiring. A Manpower hiring outlook index dipped for the second quarter of 2007.

“Taken collectively, these reports gave additional concern that the economy may slip into a recession,” said Phil Larkins, senior portfolio manager for Northern Trust’s Atlanta office.

But Larkins added that the “odds still favor a nonrecessionary slowdown in economic growth.”

Emily Sanders, chief executive of Sanders Financial Management in Atlanta, said the latest slide on Wall Street is “the second leg down” for a market that displayed investor fear for the second time in two weeks.

“I don’t think there will be a third leg down, although the second could be a bit protracted,” said Sanders.

“The market probably should be down 10 percent from its highs.”

Such a drop would meet most Wall Street definitions of a correction and is the kind of loss that has not occurred since 2002.

As for what investors should do at this time, SunTrust Robinson Humphrey quantitative analyst Gary Tapp said in a message on Tuesday that “at this point, we see no reason to be aggressively buying. Our model portfolios are at 7.5-10 percent cash positions.”

According to Tapp, investors are likely to look beyond the weak February retail sales numbers, “but they still have to deal with growing concerns about the ripple effect from subprime lending, as well as weak corporate spending.”