With Rolling Hills under new ownership and a new management team in place, the 110-unit apartment complex is undergoing a $4.3 million renovation. Ten rehabbed units, with new flooring, windows, doors, kitchen appliances and bathroom fixtures were expected to come online on Tuesday.
When Steele Properties took possession of Rolling Hills Apartments in Winston-Salem last November, the company inherited a low-income housing community where residents harbored deep cynicism from repeated cycles of neglect.
The Colorado-based real estate investment company, which specializes in rehabilitation and construction of affordable multifamily housing, purchased the 110-unit apartment complex — which is subsidized through the federal Section 8 program — for $4.9 million from the Aspen Companies. The sale provided the Aspen Companies with a $1.8 million profit, compared to the $3.1 million spent to purchase the property February 2014.
As part of the financing package, which required the city to sign off on a revenue bond, Steele Properties agreed to invest $4.3 million — or $42,760 per unit — to bring the property up to code. City leaders, including Councilman Derwin Montgomery, had been dissatisfied with a previous proposal, which would have invested only $17,000 per unit.
“We’re increasing the value of the home,” said Mary Owens, the new community manager at Rolling Hills Apartments. “We’re increasing the value of the perception of the home by the residents. Being multifamily here, it needs to provide a value for the tenants.”
The improvements outlined by Owens on Monday include equipping a community room at the leasing office with computers for residents to use, including children who need to do their homework, a new security gate at the entrance to the campus, and a new playground.
Owens said she was surprised to learn how many vacancies there were at Rolling Hills.
“Once the sale went through, we did a full walk-through,” she said. “We found that there were more vacancies than we were told. We heard that the tenants just left.”
On top of multiple code violations under the previous ownership — the city levied more than 600 violations, affecting 96 out of 110 units — Aspen Companies was accused of fraudulently billing the US Department of Housing & Urban Development for vacant units. The allegations were made by Jeremy Cox, a former property manager, along with Gene A. Smith, a former maintenance supervisor. The Aspen Companies has categorically denied the two employees’ claims.
Steele Properties started rehabbing the property in February, Owens said, beginning with the vacant units. She expected the first 10 to be ready to lease on Tuesday, with the entire project being complete in the latter part of 2017. Steele Monroe Group, the company’s property management unit, is hoping to move tenants within the apartment complex as the renovations take place, but Owens said that due to the complicated logistics of the undertaking they may opt at some point to issue vouchers so that some tenants can temporarily stay offsite until repairs are complete.
“Some of them had conditions that were deferred maintenance,” Owens said of the units. “There were floors and ceilings that needed replacement. We’re putting in central air and putting in energy-efficient windows.”
One of the units where workers from ZMG Construction were finishing up on Monday showcased matching, new black kitchen appliances, new PVC flooring with a fine grained pattern, and new windows and doors. Some but not all of the drywall had been replaced, and the entire apartment was painted. The bathroom was equipped with a new tub, toilet, sink and shower rod.
Owens said the owners are eager to attract new tenants.
“We currently don’t have a waiting list,” she said. In a couple months, when more of the rehabbed units come online, she said she anticipates that the apartment complex will hold an open house.
“I would like to reintroduce Rolling Hills to the community,” Owens said.
A common refrain among low-income tenants and advocates is that owners often make the minimum required investment and then let the properties fall into disrepair again.
“I know that we have schedules in place to make sure that the asset is maintained,” Owens said. “We do have quarterly inspections. We have a quarterly housekeeping inspection.”
Owens said that as a part of Rolling Hills’ ownership turnover, she wants to be a welcoming presence to the residents.
“You won’t find me in the office too much,” she said. “I’m walking the grounds and interacting with the residents. It’s a really happening place.”