A Good School Up the Block

8 min read

Building to Take Advantage of Education 

It is now accepted wisdom that the key social determinant to a stable and productive life for both adults and children is stable and permanent housing: It all starts with a secure place to live; that is the game-changer. But it has also become clear in the affordable housing sphere that simply providing that secure and stable dwelling is not the end of the game. And high among the other determining factors is education, both public and that provided on-site to residents. Two projects in the Southeast—one, an extensive renovation and the other, new construction—are aimed at providing the best possible education and training opportunities as a major goal.

La Playa Apartments
La Playa Apartments, formerly known as Suburban Apartments, has been providing affordable housing to low-income families in Baton Rouge, LA for more than 40 years. While the 140 one- to three-bedroom unit building was in need of a major facelift and upgrades, it was in a region that boasts three of the top five public school districts in the state, according to The Advocate of Baton Rouge. This was definitely on the radar of Vitus, the Seattle, WA-based developer and owner that operates affordable communities with about 25,000 residents in 22 states. La Playa was its first project in Louisiana.

“We conduct due diligence in every new territory or market we’re considering,” says Vitus Development Manager Samantha Cullen. “We do good underwriting on the front end, and by pairing stable, quality housing with education, we’re able to have an even greater positive impact on the lives of our residents and the surrounding community.

“And these are probably the friendliest people I’ve come across!” she adds.

The renovation, which Cullen says is about 70 percent complete and expected to be finished in November, includes full kitchen and bathroom remodeling, including high-efficiency appliances and plumbing fixtures, a new HVAC system, new roofs and windows and a community room. Vitus renewed a Section 8 Housing Assistance Payment contract and entered an extended use agreement that guarantees affordability for 35 years. Of the 140 units, 133 are designated at no more than 60 percent of area median income (AMI) and seven at 30 percent. Tenants will never pay more than 30 percent of their income in rent. The only residents who had to be relocated during the construction were in the seven units that are being made ADA-compliant.

“It is great to see new companies coming to Baton Rouge and investing time and money to improve our city,” says Erika Green, District 5 city council member. “This project is going to preserve local housing options and provide a home to residents for many years to come.”

Because of its focus on improving residents’ lives through education, Cullen says Vitus enlisted the services of Rainbow Housing Association Corporation, a nonprofit that provides housing support services to more than 100 communities in 13 states. Rainbow tailors its services to the specific needs of each building or complex. For La Playa, they are offering financial literacy, employment readiness, health and nutrition classes, computer training, crisis intervention counseling and parenting classes. Rainbow is also set up to connect residents to online programs for General Education Development (GED) and English as a Second Language (ESL).

“We stress the importance of amenities where we really had none before,” Cullen recalls. “The property is full of students, so it made sense to bring in Rainbow for such services as webinars and computer labs.”

Vitus is investing $16.5 million in La Playa, which breaks down as a Citibank loan, tax-exempt bonds and a four percent LIHTC administered by the Louisiana Housing Council, for which Cullen has the highest praise. “It’s been most important to us, “she comments, “Everyone there works together to create something great. They just have fine people who understood how important [the project] is and made it happen quickly.”

The Pines at Westdale
The Pines at Westdale is a 180-unit multifamily apartment complex located in Warner Robins, GA, a fast-growing, upscale, racially-diverse, medium-size city in the middle of the state that was named by Business Week in 2009 as the best place in Georgia to raise a family. As of 2016, Houston County, in which Warner Robins is located, had the highest AMI in the state and the schools scored among the highest. All in all, a highly desirable place to live, though not necessarily the kind of community that would seem “appropriate” for affordable or subsidized housing.

But those characteristics, particularly the educational standards, were exactly what appealed to The Vantage Group of Fyffe, AL, a single-family, multifamily and senior living projects developer within tax credit, HUD-financed, or commercial endeavors. Vantage prides itself on its commitment to providing top-tier affordable housing developments from concept to completed product with a focus on meeting the unique needs of a community. The Pines was the company’s first new construction, bond development in Georgia.

“The school district is very important to us. I would say that having some of the best school districts in the state was a major highlight,” says Jordan Whiteside,

Vantage’s development director. “It’s important where you put housing, with access to good school districts, as well as jobs, public transportation and things that make life easier and more convenient for our residents. This site had everything within two miles or less: shopping, day care, a pharmacy and sidewalks to get there.

“People tend to focus on Atlanta, but Warner Robins was smaller and had all the positive attributes we look for, but not the affordable housing stock. In fact, mostly there were single-family homes and not even many market-rate apartments.”

On March 10, 2016, the Georgia Department of Community Affairs (DCA) announced a HOME (HUD Home Investment Partnerships) notice of funding availability to facilitate construction and/or rehabilitation of affordable multifamily rentals in a preferred area by providing gap financing at below commercial lending rates, leveraged with LIHTC and tax-exempt Multifamily Housing Revenue bonds.

On March 31, Vantage submitted an application to DCA under the HOME program for a proposed development in a census tract in Warner Robins with less than a five percent poverty designation. “The land was zoned commercial, but it was one of two remaining tracts in the city that were also grandfathered for multifamily,” Whiteside explains. “Since they were already zoned, we didn’t experience much NIMBYism.”

What they did experience was difficulty in getting bonds issued. “The state housing authority was working on a neighboring nine percent tax credit deal and we were going for four percent, so they didn’t want to undermine their own efforts.” But Vantage went proactive. “We worked with the city to create its own development authority, with the power to issue bonds.” Once that authority was legislated into existence, “They issued our bonds at their first meeting. The city council really came together and helped push this through,” Whiteside says.

Within a one-year timeframe, the HOME consent had been received, a bond had been arranged, the HOME loan approved, and final closing had taken place.

Financing mechanisms for the $23,605,000 cost included federal and state tax credit equity, a first permanent mortgage, a Georgia DCA HOME loan second mortgage and a grant from the Warner Robins Development Authority.

Vantage even worked directly with the school system to design the bus pickup for the development. “With 180 apartments, we knew we’d have a ton of children, so we wanted the busses to be able to get in and out easily without having to backup and we built a covered pavilion for the kids to wait in safely.”

Shared Values
Speaking of the La Playa project, Cullen essentially sums up her company’s general approach when she says, “We aim to create a community, one that offers a wide range of programs, including education, training and financial literacy, and we hired a new management company that understands what we want to accomplish. We also have a garden and other amenities because it’s always nice for people to be able to take pride in where they live.”

Vitus’s Founder and Managing Director Stephen Whyte describes the company’s goal to, “Do right by the residents who live in our properties and do right by the communities in which those properties are located.” This is clearly a goal shared by Vantage and other developers that not only provide affordable housing, but also access to the community attributes that allow residents to improve their lives.

Story Contacts:
Samantha Cullen

Jordan Whiteside