FAYETTEVILLE -- The Housing Authority is buying an apartment complex next to property it owns as a way to help preserve the city's affordable housing stock, its executive director said.
The authority plans to buy the 18-unit 12th Street Apartments at the southeast corner of East 12th Street and South Washington Avenue for $865,000. Closing date is Tuesday.
Expanding operation
The Fayetteville Housing Authority is under contract to buy four properties under its development nonprofit:
West End Avenue north of Wedington Drive
• Cost: $1.6 million
• Units: 49
Deane Street and Porter Road
• Cost: $1.32 million
• Units: 27
12th Street and South Washington Avenue
• Cost: $865,000
• Units: 18
Dunn Avenue between 11th and 13th Streets
• Cost: $850,000
• Units: 14
Total units: 108
Total cost: $4,635,000
Source: Fayetteville Housing Authority
The three buildings making up the complex sit a stone's throw from Morgan Manor, another housing authority property on 12th Street.
"We thought of this as an opportunity to expand our portfolio," Executive Director Angela Belford said. "But primarily, we wanted to protect affordable housing."
The authority is making the purchase through its nonprofit group, FHA Development. The idea is to use a combination of bank loans and grants from the state to cover the purchase price and the cost of renovation. Belford estimated the buildings need about $250,000 worth of work. Tenants will pay the same rents as they have been, but to the development group, she said. The apartments will be renamed Red Bud Gardens.
The same method was used to buy the old Hi-Way Inn & Motel and Cafe Rue Orleans buildings on College Avenue near North Street. The authority's development nonprofit bought that property for $731,000 last year.
The authority is buying 12th Street Apartments, and is under contract to buy three others, from John Cloyed. The authority is waiting for bank financing for the other properties.
The city needs to preserve the units so they don't get demolished and replaced with more expensive housing, Belford said.
"If we lost 108 affordable units in one swoop, that would be devastating to the system," she said.
Average rent for an apartment in Northwest Arkansas was $716 last year, according to the University of Arkansas Center for Business and Economic Research. Rent for a single-bedroom unit at the 12th Street apartments is $630, and $807 for a two-bedroom. The federal government considers any housing for which the occupant pays no more than 30% of his income as affordable.
A number of the tenants at 12th Street Apartments are housing authority clients through a program called Section 8. The plan is to keep a mix of tenants paying subsidized and market rates, Belford said. Residents with a Section 8 voucher pay 30% of their income to rent.
The need for affordable housing is more crucial now than ever, according to experts. Diane Yentel, president and chief executive officer of the National Low-Income Housing Coalition, spoke about the topic during an April 7 webinar hosted by the Urban Land Institute.
Yentel said there are about 8 million people in the country who aren't homeless but could be considered cost-burdened, meaning more than one-half of their income goes to housing payments. Those populations are the most at risk to fall into homelessness, she said.
The coalition projects another 1.5 million people will fall into that high-risk category because of job losses resulting from the covid-19 pandemic, she said.
Jessica Andrews, chief executive officer of 7 Hills Homeless Center, said people losing their jobs and facing housing insecurity was a reality in the region and elsewhere before the pandemic. Organizations are preparing for a likely increase in homelessness, she said.
Residents' ability to find housing for lower incomes is critical, Andrews said.
"I think it's really important to continue to focus on expanding affordable housing options in the area," she said. "At the bare minimum, we need to be preserving the affordable housing options that currently exist."
The authority will work with any of its new tenants if they are facing hardship from the pandemic, Belford said.
NW News on 04/18/2020