Summer Town Estates is the first low-income housing tax credit (LIHTC) development for seniors on the island of Guam.
The property significantly adds to the region’s housing stock by providing 240 affordable apartments for seniors earning no more than 60% of the area median income. Summer Town Estates also helps meet the demand for housing for people with special needs, with 20% of the homes set aside for residents with vision, hearing, and mobility impairments.
“There are several firsts for this project,” says Jason Ralston, director of finance at Core Tech Development. “It is the first private affordable elderly project on the island. It is also the first recipient of a project-based voucher contract in Guam. The Guam Housing and Urban Renewal Authority (GHURA) converted tenant-based vouchers to project-based vouchers on 112 of the units.”
While significant on its own, the development is also special because it’s key component of a larger revitalization effort in the community of Dededo.
The $64.1 million Summer Town Estates is one of three planned, contiguous LIHTC projects by Core Tech. Additionally, the LIHTC developments will be adjacent to a commercial center that will contain a grocery store, a restaurant, a community events center, and other uses. This commercial center is partially financed with the first New Market Tax Credit transaction on the island.
Developing affordable housing is difficult in Guam, a U.S. territory that’s about an eight-hour flight from Hawaii. The remote location requires all construction materials to be shipped, so costs are high. Developments must also be built to withstand the region’s earthquakes and typhoons.
“In terms of our efforts to control and reduce costs, we really focused on trying to create as many efficiencies as possible,” Ralston says. “The 240 units are made up of 120 one-bedroom and 120 two-bedroom units in 60 identical four-plex buildings. Because of this, we were able to develop a concrete pre-cast system that allowed for the highest quality at the greatest speed. This reduced construction time by almost six months for the whole project, which is a tremendous savings in overhead for the construction and interest on the construction loan.”
Core Tech also purchased cabinets, countertops, flooring, and fixtures in bulk and from the same suppliers it did on a market-rate project that it was building at the same time. The team was then able to warehouse the items, allowing for at least a 10% savings on those particular items.
Utility costs are also incredibly high in Guam, so Core Tech included a number of energy-efficient systems in the design, including solar-powered water heaters, LED lighting, and energy-efficient appliances in each unit, says Ralston.
Summer Town Estates is financed largely with LIHTCs allocated by GHURA and syndicated by Boston Capital.