Two affordable housing multifamily projects in East Austin are competing for a 9 percent housing tax credit from the state, but only one is likely to get it. That doesn’t mean, however, that only one of the projects will get built — the weaker candidate determined by the Texas Department of Housing and Consumer Affairs’ scoring process is prepared with a contingency plan.
The projects under review by the TDHCA include Pathways at Chalmers Courts East, a development by Carleton Residential Properties and the Housing Authority City of Austin (HACA); and Talaveras Lofts, a development by DMA Development Company LLC. On January 8, DMA entered a 99-year ground lease contract as the buyer from Plaza Saltillo TOD LP, which is the legal entity created by Endeavor Real Estate Group to redevelop a six-block site along the Capital MetroRail’s red line from near Interstate 35 to the Plaza Saltillo Station.
The Pathways at Chalmers Courts East plan is the second phase of redevelopment for the existing public housing development Chalmers Courts, which was originally constructed in 1940 and operated by HACA. The Chalmers East project will involve the demolition of the buildings currently on half of the existing Chalmers Courts site — an area bound by East Fourth, Chicon, Chalmers, and East Third Streets — except for two buildings, which will be retained for use as local non-profit office space at no charge.
Chalmers East will provide 156 new construction units, including 91 units of project-based Section 8 rental assistance as part of the conversion of the development from public housing. Additionally, the development will include 39 Project Based Vouchers provided by HACA.
Three four-story residential buildings will be constructed — two will have 47 units, with 62 units in the third. Square footages range from the 600s for a one-bedroom unit, up to 1,009 square feet for a two-bedroom unit, and from 1,260 to 1,319 square feet for a three-bedroom unit. According to Carleton’s TDHCA application the project has an estimated cost of almost $28 million.
There is a zoning request pending to change the block from its current multifamily status to a Transit Oriented District/Mixed Use for multifamily development. Nelsen Partners Architects & Planners is the architect of record for both the Pathways at Chalmers Courts East and the Talaveras Lofts projects.
Talaveras Lofts, on the other hand, is a proposed mixed-income development that is part of the much larger Plaza Saltillo mixed-use redevelopment of the Saltillo area led by Endeavor as the master developer. DMA was selected to develop a 92-unit five-story, 68-foot-high building on the block located on the southeast corner of East 5th Street and Navasota Street, right next to Saltillo Plaza.
The project will include 92 apartment units with a mix of studios and one to three bedroom apartments. 98 percent of the units will go to families earning 60 percent or less of the area Median Family Income (MFI). The income to unit distribution is broken down as follows:
- 12% of units for households earning at or below 30% MFI
- 60% of units for households earning from 30 to 50% of MFI
- 26% of units for households earning from 50 to 60% of MFI
Talaveras Lofts will have 52 studio units, 20 one-bedroom units, 12 two-bedroom units, and eight three-bedroom units. There are 63 designated parking spaces, most of them situated at ground level as structured parking underneath the building’s residential levels. Amenities include a large exterior terrace on the second floor that will face the light rail line, and a community room on the same floor.
There will also be a small exterior terrace on the fourth floor, a fitness center on the third floor, and a bike storage room taking advantage of the building’s position next to the future Lance Armstrong bikeway. The building’s design is described as environmentally-friendly, and includes three rain collection tanks in the parking garage. DMA estimates the project cost at $16.2 million.
In this year’s round of 9 percent housing tax credit applications, six have been submitted by developers in Austin, but the funds available will probably only cover three projects. When scoring projects, TDHCA guidelines discourage awarding more than one project in the same neighborhood, and that can include projects that have been awarded in the neighborhood over the last decade or longer.
The Chalmers project would serve a larger population, and one that is already in place — the residents will be relocated during the construction phase. The city’s office of Neighborhood Housing and Community Development, which holds considerable weight with TDHCA, has already endorsed the Chalmers project.
“The City Council confirmed (by resolution) that Pathways at Chalmers Courts East contributes more than any other to the concerted revitalization efforts of the city within this HPD (Homestead Preservation District,” NHCD Program Manager David Potter wrote in a Feb. 22 letter to TDHCA.
DMA, in defense of its project, argues that the once high-crime, low-income neighborhood is rapidly becoming gentrified, and more affordable housing projects are needed now; witness the nearby projects by Endeavor, as well as Cielo Property Group at East Fourth and Comal Streets. DMA notes that the district is also a tax increment reinvestment zone that provides developers other options for subsidizing housing construction.
Janine Sisak, senior vice president/general counsel for DMA put it to the TDHCA this way in a Feb. 24 letter: “The amount of blight has been reduced, the incidents of crime are on the decline, but the problem of gentrification still exists. Combating gentrification will be addressed with these TIRZ proceeds by reinvesting funding into older homesteads, either by demolition and new construction or through aggressive rehabilitation of older structures.”
If DMA does not get a 9 percent housing tax credit award, the company has already prepared a contingency step. The company will submit an application on Oct. 1 through the TDHCA’s 4 percent Housing Tax Credit program, which is not capped. It is DMA’s goal to obtain site development and building permits by April 1, 2019.