Case Study

Friars Court Apartments

5 min read

Putting Affordable Housing on the Map in Southern New Hampshire  

The emptying out of urban offices due to the pandemic has allowed many workers to relocate farther away from work, making housing in city suburbs even less affordable than usual. The town of Hudson, NH, a suburb of Boston, is one of them. 

Dakota Partners has put a dent in the lack of affordability with Friars Court Apartments, which it says is the only specifically affordable housing community in town, which is adjacent to Nashua, NH. It has finished the first of two buildings there, with the second one in the final stages of construction. 

Between the two buildings, 81 one- and two-bedroom affordable housing units will be constructed. 

“Housing prices have soared during the pandemic,” according to Jeremy Vieira, development director at Waltham, MA-based Dakota Partners. “There’s been a tremendous pouring in.” The price hikes affect both rentals and homeownership units, he says. “More than ever before, we’re facing a real housing pinch in this country.” 

Affordable housing in general is very difficult, he says, being quite specialized and needing a variety of partners. “It also needs a perfect balance between the cost of land and the marketability of units in order to work.” 

“Our goal is to assist as many different types of people as possible,” he says. So, area median incomes at Friars Court Apartments will range between 30 and 60 percent on the Low Income Housing Tax Credit (LIHTC) units. There will also be 12 market-rate units without tax credit equity. 

“Our market rates are very affordable,” he says. Vieira notes there has been “incredible demand” for both affordable and market-rate units in the completed first building, which is almost leased up. Move-in was scheduled to start at the end of last month. 

Interestingly, the first building was done using nine percent tax credits, while the second building is being done using four percent tax credits. 

One Investor for Two Sets of Credits 
Total development cost is $12.55 million, and the investor in both sets of tax credits was Boston Capital, whose LIHTC portfolio has recently been acquired and is operating under the new name of Boston Financial Investment Management. 

The New Hampshire Housing Finance Authority (NHHFA) provided a second mortgage, while Boston Private Bank extended the first mortgage, he says. NHHFA is also providing a subsidy.  

“Not too many sources on this particular deal, which makes the execution a little bit easier,” Vieira says. “You save a substantial amount of money by having fewer sources involved in the deal.” 

Phase I, 47 units, incorporates a passive house design, Vieira says. “The energy efficiency depends on how tight the envelope is,” he adds, and Phase I was done “sealing it really tightly. We’re proud of that. It takes a lot of specialty knowledge.” 

The project closed in October 2020 and construction on Phase 1 started in December of that year and took about a year. 

“Dakota worked cooperatively with the town of Hudson in getting these 81 quality and energy efficient one- and two-bedroom general occupancy units approved,” says Jim Menihane, director of multifamily business development at NHHFA. “These new units will provide much-needed homes for our state’s workforce, which is especially needed given the low inventory of apartments and higher rent in the southern tier of New Hampshire.” 

Building the project during the pandemic has been hard, Vieira says. “It was generally a difficult time to build projects,” he says, noting supply chain problems and some items, like timber, that rose four times its previous price before settling back. 

A Challenge to Mitigate the Costs 
“Our construction team has done a great job to mitigate those costs as much as possible,” Vieira says. 

“Everything has been a challenge,” he says. But “the end result is really quite special,” with “a rather lovely design” featuring “enormous” windows letting in great light. 

Named Friars Court after the local Friars Drive, the project is open to all ages and features project amenities, like a clubhouse, a community room, a fitness center and a playground for the children. 

“The new development is on an 11-acre site just a mile from Hudson’s central business district and within walking distance of grocery stores, banks, retail stores, post offices and pharmacies,” Dakota Partners says. “Commuters will have direct access to State Route 3A and excellent access to public transportation. Downtown Nashua’s shopping and entertainment area is a three-mile drive away.” Boston is about an hour’s drive away. 

The site includes access to 80 acres of woodland. One-bedroom units are between 547 and 557 square feet, according to the project website, while two bedrooms measure between 832 and 931 square feet. 

Rents vary from $1,028 to $1,300 for one-bedrooms, and $1,233 to $1,600 for two-bedrooms. 

The firm touted the energy efficiency at the project, saying it would give residents “savings in monthly utility bills from reduced energy use, high indoor air quality due to excellent ventilation and a sound-proof home from air tightness and super insulation.” An early adopter of passive house construction, Dakota has close to a dozen projects currently under construction or in development. 

Dakota Partners describes itself as a firm that “acquires, develops, builds and manages multifamily housing across New England and the Mid-Atlantic states. Our diverse portfolio includes affordable, workforce and market-rate communities. Our team has successfully developed over 4,000 residential units.” 

It said it has been ranked the 40th largest developer of affordable housing in the United States. 

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.