Ryan Hoover, President of TVC Development, shares some preliminary details about Vestcor’s proposed Brooklyn development, as well as thoughts on the residential housing market Downtown.
Vestcor started its presence downtown with the rehabilitation of two historic buildings into mixed use/market rate housing in The Carling and 11 East Forsyth. What prompted the shift towards affordable housing projects?
Our main focus is affordable housing and we’ve been developing affordable communities for over 20 years. The Carling and 11 East were opportunities to take rundown and vacant buildings in the heart of downtown and renovate them. Those are our only two historical renovations.
Lofts at LaVilla is a five-story, 130-unit affordable housing complex that opened in 2017.
**Many often cite having 10,000 residents living in the Northbank as being the tipping point where downtown really starts to thrive. Its worth noting that in Downtown Jax’s heyday, the surrounding urban core neighborhoods like LaVilla, Brooklyn, Sugar Hill, Oakland, etc. had pretty large residential populations living in housing that was affordable for those who worked in service and hospitality jobs Downtown. How critical is having a mix of housing types/pricepoints to the ultimate health of Downtown? **
We feel that affordable housing is critical to the revitalization of downtown. The more people living downtown increases the activity and demand for the restaurants, stores and hopefully there is a domino effect from there.
11 East and The Carling are essentially fully occupied. How has the demand been for the LaVilla projects?
We have seen very high demand for both Lofts at LaVilla and Lofts at Monroe. Lofts at LaVilla was 100% occupied within 45 days from opening and Lofts at Monroe, which opens November 1st, is already 90% leased.
Lofts at Monroe is a four-story, 108-unit mixed income housing complex that opened in November 2018
It is often said that affordable housing isn’t necessarily affordable to build in today’s market. To keep rents in an affordable range, there is often a financing gap that needs to be filled. Can you talk about how the typical financing structure is arranged for these type of developments and how critical it is to have programs like the Low-Income Housing Tax Credit and local tools like the Multifamily Revenue Bond Financing Program are in producing affordable housing?
When you look at a Market rate community and an affordable community there really isn’t a whole lot of difference. You can spend a lot more on a market rate deal with features and amenities but in the end the basics cost about the same. The only way to make up the gap is with these programs.
Is Jacksonville started to get its full share of affordable housing credits? It seemed that for a long time, those dollars were mainly flowing to cities elsewhere in Florida.
There is always room for more credits in Jacksonville but it’s a very scarce resource that has to be spread out among the entire state. Unfortunately the demand for affordable housing is outpacing the supply of credits in almost all areas.
The Low-Income Housing Tax Credit (LIHTC) is the nation’s largest housing subsidy intended to increase the supply of affordable housing. Roughly $8 billion is allocated annually to private or nonprofit developers on a competitive basis, divided among all 50 states as defined by each state’s qualified allocation plan (QAP). This chart illustrates the typical financing allocation of an affordable housing new-start using the LIHTC. A development entity earns tax credits for eligible construction/rehab activities, and in turn transfers those credits to an investor who makes a “capital contribution” to the project’s owner (a process known as syndication). For the first 10 years the newly constructed development remains an affordable housing project, the underlying investor gets to claim 1/10th of the total credits, reducing the tax liability for that year. The program’s pay-for-performance structure ensures that private investors bear the financial burden if properties are not successful. Illustration courtesy of the Federal Reserve Bank of Atlanta.
Do you have an idea of how many units will be included if the Brooklyn property is able to break ground, and a target date for when you hope to start moving dirt and come online for new residents?
We are still in the application process for the Brooklyn community which is a competitive process so we don’t have a whole lot to share at this time. We can say that if it were to be funded it would be 133 units similar to Lofts at Jefferson Station and could break ground about a year from now which would have move-ins about a year after that.
Construction is underway on the 133-unit Lofts at Jefferson Station. Located on a 1.77-acre site, just south of the JTA Skyway’s Jefferson Street station between West Bay and Water Streets, 80 units will be set aside for affordable housing. The remaining 53 units will be dedicated to workforce housing.
You’ve now done projects in the historical Northbank core, then broke ground on the first new housing starts in LaVilla in over three decades and are now setting your sites on the Brooklyn neighborhood- which like LaVilla, hadn’t seen new housing construction until 220 Riverside and Brooklyn Riverside broke ground this decade. Why the interest in Brooklyn? What makes the neighborhood attractive for redevelopment and what needs to be done to attract more growth?
We have been very successful in the LaVilla area, which has been said to be a bridge between Brooklyn and the urban core. We believe there is the same demand in Brooklyn for affordable housing as there is in LaVilla. The only difference with Brooklyn is that it has seen Market rate units developed over the last few years where LaVilla had no development.