Section 8 Property in Houston Emerges from $7.5M Makeover
- Jan 28, 2011
Houston–St. James Apartments in Houston, a 30-year-old affordable housing community, has experienced a renaissance at the hands of Dominium. The national apartment developer and manager just completed a $7.5 million upgrade of the 150-unit Section 8 property.
St. James, formerly known as Chateau Village Apartments, consists of 13 structures containing one- to four-bedroom residences. Dominium acquired the property in the fall of 2009 with plans of renewing the project-based Section 8 Housing Assistance Program contract for the multifamily complex and submitting it to a substantial renovation. However, particularly during a credit crunch, even the best laid plans can be hindered by big financial hurdles. Dominium had endeavored to infuse $50,000 per unit into the renovation project.
“This one wasn’t easy to get done; there were a lot of hiccups that delayed closing financing,” Owen Metz, senior development associate with Dominium, tells MHN. What ultimately got the company over the hump was the 9 percent Low Income Housing Tax Credits (LIHTCs) provided through the Texas Department of Housing & Community Affairs. “That financed a large majority of the construction costs. Anytime you put in that much equity, it makes it easier to get mortgages. Bank of America provided a construction and permanent loan totaling approximately $15,000 per unit.” The City of Houston provided additional assistance via a HOME Funds loan, and JP Morgan Capital Corp. made a tax credit equity investment through Alliant Asset Management.
Dominium’s perseverance paid off, and St. James has benefited from the effort. The long list of upgrades to the exterior and the residences include new entry and interior doors, the addition of new children’s play facilities, and the renovation of the community building encompassing a computer lab, kitchen, sitting area and offices.
And changes were made to increase the property’s sustainability. Making the property more environmentally friendly was part of Dominium’s original plan, so the addition of green features dovetailed with the green initiative segment of the U.S. Department of Housing and Urban Development’s Mark-to-Market Program that Dominium entered in order to renew the Section 8 contract.