The Reading Housing Authority is asking the city to release a $1.475 million debt tied to the River Oak Apartments, saying doing so would clear the way for badly needed renovations to the 72-unit affordable housing complex.
Authority President and CEO Stacey J. Keppen and authority solicitor Edwin L. Stock made the request to City Council during its committee of the whole meeting Monday.
The authority sought similar relief in 2022, when council unanimously opposed forgiving the debt. At that time, the authority said eliminating the obligation was necessary to secure financing for repairs.
Keppen said Monday that River Oak, a townhome-style development on River Road with two- and three-bedroom apartments, has been maintained by the authority as part of its affordable rentals program since 2018.
The complex has held a 98% to 99% occupancy rate over the past 18 months, she said, and many tenants have lived there for years. Fifty-seven of its 72 households moved in before the authority acquired the development.
Keppen said rents are deliberately kept below market rates to serve working families, many of them single-parent households.
“This is a mission-driven position that Reading Housing Authority is in to try to make certain that we can maintain this asset affordably, keep our rents affordable to people who are city of Reading residents who are working,” she said.
River Oak needs significant capital improvements, Keppen said, noting that the authority cannot make an investment of the size required while the debt remains unresolved.
Stock said the history of the $1.475 million obligation stretches back decades.
The money originated with a federal Housing Development Grant program, allocated to the city by the U.S. Department of Housing and Urban Development in the 1980s, he said, noting that grant program ended in 1991.
“It’s important to understand that this was a grant from the federal government,” Stock said. “The funding did not come directly out of the city operating funds.”
Stock said the authority became involved with River Oak years later after the original developer was preparing to walk away from the property. The city, concerned the complex could fall into the hands of a landlord who would not properly maintain it, approached the authority about taking over ownership and management, he said.
The authority ultimately agreed.
Stock said River Oak was transferred in 2025 from River Oak Development LLC to the housing authority for slightly more than $1.6 million, based on an appraisal.
Under the repayment formula contained in the original financing documents, the city would not receive money from that transaction, he noted.
The property’s value also reflects authority’s decision to maintain below-market rents, he said. A private owner could raise rents, potentially increasing the property’s value.
Meanwhile, River Oak faces substantial deferred maintenance, including windows that Stock said are particularly problematic during cold weather.
“The place is in, you know, drastic need,” he said. “It came online in 1989 and it’s really in drastic need of substantial renovation that the housing authority is committed to do if we can get some relief from the city.”
Managing Director Jack Gombach said the city’s administration supports the authority’s request.
Anything that increases the authority’s ability to provide housing amid an affordability crisis deserves support, Gombach said.
Council members Jaime Baez Jr. and Rafael Nunez also voiced support.
Stock said the matter is time-sensitive, as bids for the planned work will soon expire.
“We would love if there would be a decision next Monday because we have outstanding bids that will expire on the 28th of August,” he said, noting approval would allow work to begin before winter.
Council is expected to vote on the matter at its next regular meeting on Aug. 24.