As a federal program that keeps properties affordable expires, some Greensboro residents feel the impact

On a cold, rainy day in December, cars speed down slippery roads past the entrance to New Garden Place Apartments in Greensboro.

The 76-unit complex on Phillips Avenue made headlines when residents said they were dealing with a worsening living situation and an unresponsive owner.

Standing outside her apartment, Brigette Babbington said her unit has gone for months with no heat and faulty outlets. On colder days she opens her oven to try to warm her unit. She says the situation has been made especially difficult due to having lupus.

"My health keeps deteriorating every single time I got to keep using the heater or oven," Babbington said. "It's horrible."

According to public records, Srinivas Potluri is the current owner of the building under the New Garden Apartments LLC.

City officials said the units in question at the complex were finally brought up to code as of February. But that came months after violations and strained communications, leading Potluri by the end of January to owe around $21,000 in fines — an amount ultimately reduced to a fraction of that, in accordance with city policy.

Things like residents' HVAC systems and electrical outlets went unfixed for nearly a year, with at least one tenant choosing to move out.

Potluri did not respond to multiple emails and phone calls requesting comment.

Greensboro Chief of Compliance Larry Roberts said code officers try to look out for the best interest of residents in these delicate cases.

"We want to get violations corrected, but we don't want to remove somebody from their home in order to accomplish that," he said. "So that fine line we have to walk ... we try to take everything into consideration."

Roberts said a case on average can take three to four months. A house can eventually be condemned by the city, but apartment complexes provide a different challenge.

"Say there are 17 units there, but there's a total number of units. If it doesn't involve the entire space, then we can't really treat it as a housing case," Roberts said. "Though, that's where the civil penalties came into play for this particular situation."

A change in ownership

Brigette Babbington has lived at the complex since 2022. She said residents began facing difficulties getting maintenance fixed after ownership changed.

Her rent increased from $510 to $895 a month despite the delay in repairs. She said she was frustrated because she watched maintenance people clean up vacant units before addressing current tenants' needs.

"They're not fixing the problems that's here already," Babbington said. "They're getting ready for the people that are moving in here, so they're fixing those apartments and forgetting about the people that live here."

But this isn't the first time Potluri's violations have affected residents. He owns more than 60 LLCs that are behind properties across the state.

This includes the 121 Motel in Henderson. According to state records, it was owned by a company that shared the same Gastonia business address as other LLCs owned by Potluri. Last year, more than 150 people were displaced after city inspectors found multiple health violations and deemed the motel unsafe.

Roberts, with Greensboro's compliance office, said the public outcry prevented the situation at New Garden Place Apartments from spiraling.

"I think the community involvement and then the residents coming to council and making sure that the violations were being brought to light, that helped out a lot and that helped us put pressure on them," he said.

But the complex was under a federal program with oversight to prevent such a situation from ever coming about.

Expiring restrictions

According to public records, four days before Christmas in 2023, Potluri purchased the building. That same year, a limitation that requires oversight and the owner to keep rents affordable ended.

Hundreds of units across the state under what's called the Low-Income Housing Tax Credit program are expected to similarly see their restrictions expire in the next few years.

LIHTC, as it's often called, was created in the 1980s. It's considered to be one of the most successful federal programs. That's according to Scott Farmer, executive director of the North Carolina Housing Finance Agency, which oversees the program for the state.

"It created a financial vehicle to be able to produce both new construction, rehab, affordable housing and rental housing across the country," Farmer said.

The way it works is that the federal government issues tax credits to the state. Agencies then award the credits to private developers through a competitive process. Developers then sell the credits to investors, which are often larger banks, who in return provide funding for the project.

Farmer said the program has helped finance more than 130,000 rental units throughout North Carolina.

These homes are required, for 30 years, to be only for households making up to 80% of the area median income. Farmer said this is enforced by both the state and the Internal Revenue Service for the first half of that period.

"We lose the IRS  as a stick after year 15, and the investors typically come out soon thereafter because they've taken their tax credits and they're no longer there, so we're the only real stick that's left at that point for compliance," he said.

Farmer said during this period his staff goes out to do physical inspections at the properties. If there's an issue in one year, they make sure to follow up in the next.

He said with requirements expiring, the N.C Housing Finance Agency is already looking at ways to maintain affordability where they can.

"None of us thought we'd be around to deal with a 30-year-old property, and now we are," Farmer said. "So we're trying to be as proactive with it as we can to make sure that we keep the properties that make sense. There's also some properties that are in areas that it's going to make more financial sense for the owners to sell, and we recognize that."

Finding accountability

Late last year, Linda Bethea, another New Garden Place resident, shared her experience at a Greensboro City Council meeting. She said things became hard once new ownership took over. When her heat and air went out last April, repairs were never made despite multiple requests.

"I continued to talk with the manager, let them know what was going on, and every month I would go pay my rent, all I would hear is, 'We got somebody that's coming they'll be out there this week,'" she said. "Nobody, never came."

Bethea has since moved out. But she is one of the residents who has filed a lawsuit against Potluri for the delayed maintenance requests.

Legal Aid of North Carolina attorney Michael Gibeley represents the residents. He said it's concerning that they lived under those circumstances for so long.

"It's really, really shocking," he said. "And the code enforcement officer who we've been working with described it as the worst case she's ever seen."

Gibeley said his clients experienced problems ranging from sparking outlets, to sewage issues causing waste to spread in some units.

"It's our understanding that the place is not still a LIHTC property and hasn't been for some time, and it's also our understanding that when it was a LIHTC property, things were much better," he said. "And that makes sense because there's, you know, obviously a lot more oversight."

It's the kind of enforcement and accountability Bethea was searching for in her plea to the city council.

"I just ... I want to know what can be done about it," she said. "It's very unfair. You know, I'm human."

More than 200 units across Guilford County are set to see their restrictions expire under the LIHTC program in the next few years.

This includes Alexander Homes apartments, which Potluri now owns.