Case Study

Park Yellowstone in Houston

6 min read

Vesta Corporation’s Award-Winning Rehab in Texas

Affordable housing developments are never easy. But acquiring and rehabbing a 23-year-old project in Houston gave Vesta Corporation a few more hoops to jump through than just fixing old roofs and redoing faulty water lines. In addition to the nuts and bolts of this comprehensive $30 million renovation, the developer found the state housing agency wanted to see some non-construction improvements as well, like better educational opportunities for residents and a reduction of crime and blight in the neighborhood.

Vesta, a multifamily housing developer/manager/owner, has managed to do just that. In fact, Vesta recently won a Texas Apartment Association’s Affordable Housing Redevelopment Award for the Low Income Housing Tax Credit deal on more than 200 units in the Park Yellowstone Townhomes, which originally were developed in 1997 and are located on Yellowstone Boulevard near the intersection of highways 288 and Alt-90 in Houston’s Greater OST/South Union section.

Vesta Executive Vice President Lewis Brown remembers, “One of the things that came up in our exploration of the four percent LIHTC was the Texas Department of Housing and Community Affairs had gone through a reworking and had adjusted certain criteria on neighborhood characteristics.” As part of Vesta’s application to TDCHA, and based upon a change in their rules, Vesta was required to explore various neighborhood characteristics, such as education. Brown explains, “We had to study school performance, the likely trajectory of the array of schools serving the Park Yellowstone community, and where on-site community services may fit in.” Brown also notes, “We also had to explore elements, such as community crime and blight and trends in both of these areas.”

All three of those were possible challenges for the prospective redevelopment, Brown says. “A key person on the team, Executive Vice President Candice Greenberg, spent time researching and developing a thoughtful plan with stakeholders regarding why the redevelopment of Park Yellowstone was important and critical. We concluded that the redevelopment of Park Yellowstone was related to ongoing, exciting changes in the surrounding community, and would support then current progress in those key areas.”

A Ripple Effect
For Vesta, this aligned with their approach. “Everything starts in the home. At Vesta, we believe that providing families a safe home and community is critical. A home with a renovated interior and exterior brings stability to a family’s life.”

Brown says he felt there is a deep connection between the physical surroundings in which people live and their quality of life. Moreover, these can all lead to impactful change. Lewis says, “Hopefully, there is a domino effect that benefits everyone: individuals, the property and the surrounding community. These changes may stem children and families using on-site services, children in schools, a reduction in crime as a result of meaningful and community-centric security, partnerships with local law enforcement, all serving as a springboard for change.”

Vesta was aware that encroaching gentrification put the future affordability of Park Yellowstone at risk. “If we had not acquired Park Yellowstone and preserved its affordability, we foresaw the likelihood that the property would eventually become market-rate, thereby displacing its current residents and putting more pressure on the already constrained supply of quality affordable housing.  That eventually would have meant a significant loss to the community,” Brown says.

Gentrification in the neighborhood surrounding Park Yellowstone was apparent. “An array of economic development investments, its easy access to transportation and proximity to Houston’s world-class Medical Center and its wealth of job opportunities made Park Yellowstone’s area uniquely susceptible to gentrification,” Greenberg says. “Resident displacement from the community surrounding Park Yellowstone was clear. To Vesta, data evidencing displacement clearly spoke to the need for Park Yellowstone’s redevelopment and its continuation as a critical source of affordable housing.”

“By ensuring Park Yellowstone’s long-term affordability,” Greenberg says, “Park Yellowstone will provide homes for new low-income families for years to come amidst a community undergoing significant socioeconomic change.”

As it is now, all 210 one- two- and three-bedroom units (38 ground-floor, single-story and 172 two-story units) are affordable to residents earning 60 percent or less of area median income (AMI). Thirty percent of the units are occupied by residents at 50 percent AMI or lower. There are more than 400 residents in the community.

According to Vesta, “Community enhancements included a renovated leasing center, new swimming pool, new gazebo, enhanced lighting and installation of a state-of-the-art security camera system. The community also has an on-site daycare center, as well as case management services and resident activities on-site provided by Star of Hope Mission.”

It Takes a Village
The $30.2 million financing came from TDHCA bonds associated with the four percent LIHTC allocation, equity from PNC Bank, loans through Key Bank and Fannie Mae’s Multifamily Tax-Exempt Bond (M-TEB) program, money from the city of Houston, including Disaster Relief money from its Community Development Block Grant and a developer loan from Vesta.

“It takes a village, if you will,” Brown comments regarding the complexity of LIHTC project financings.

“During due diligence, we discovered some site issues with the property,” Brown remembers, and that affected the project’s capital stack. “No deal ends the way you envisioned it at the outset,” he points out.

The developer decided to pursue the redevelopment and sought additional financing sources to make it work.

“We used the four percent LIHTC, and at the time the four percent rate was not fixed,” says Brown. “Key Bank was our lender, using a Fannie Mae loan program. We were also able to get, between debt and equity, a very large soft loan from the city of Houston. We had strong support from the city, and that was a critical piece of our being able to find those additional sources to cover the additional costs we encountered.”

COVID-19 complicated the 16-month build period (BMS Construction of Dickinson, TX was the contractor), but Brown notes the project was done “on time and on budget.” Residents were moved into different units while their units were being rehabbed. Some returned to their old residences, while some preferred a one-way move.

A Pleasant Discovery
According to the project video, construction crews found problems, but there also were some pleasant discoveries for the developer, such as a well-maintained tree and grass landscape on the campus. The finished project shows attractive, neat homes in a spruced-up campus.

Park Yellowstone was recently given the Texas Apartment Association’s Affordable Housing Redevelopment Award for “creativity and innovation in affordable housing.”

TAA notes the project demonstrated outstanding efforts in resident relations, “Each year, Park Yellowstone hosts a variety of social programming aimed at encouraging residents’ success in life,” according to the trade group.

Connecticut-based Vesta, which has been in business for 40 years and employs more than 300 people, owns and operates 57 affordable housing properties with more than 9,600 apartments in Connecticut, Maryland, New York, New Jersey, Ohio, Texas, Virginia and the District of Columbia.

A video of the development is available at

Story Contacts:
Lewis Brown, Executive Vice President, Vesta Corp.

Candice Greenberg, Executive Vice President, Vesta Corp.

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.