Austin, Texas – For abused women and their families, a shelter and support organization called Safe Place has long provided up to 18 months of transitional housing and services on a secure 20-acre campus. But at the end of the 18 months, many of the mostly poor women working minimum-wage jobs faced the need to move to other housing, which they could not afford. Tekoa Partners opened up the 184-unit Grove Place Apartments next door to give them a long-term affordable housing option.
Before Grove Place opened last fall, women would typically “either end up sleeping on somebody’s couch or end up, in very extreme cases, back in the same abusive relationship,” said Rory O’Malley, a former associate executive director of Safe Place and now program administrator for Austin Community Development Corp.
Leaving the Safe Place apartments also often effectively cut the women off from the variety of support services available at Safe Place, from counseling to day care to a charter school, according to Bill Lee, a partner at Tekoa Partners here, a for-profit developer that also built Safe Place’s 44-unit transitional housing facility.
Tekoa looked to a variety of sources to finance the $14.8 million, 184-unit project, which has two two-story and two three-story buildings. The Texas Department of Housing and Community Affairs awarded 9% tax credits that yielded $6.8 million in equity. PNC Financial Services Group of Pittsburgh bought the tax credits. Laredo National Bank issued a $6.5 million, 18-year loan based on a 30-year amortization schedule. The state’s Housing Trust Fund provided a soft second mortgage of $100,000.
By agreeing to build 5% of the units for the physically disabled, Tekoa also qualified for a special program whereby the city waived building permit fees and capital recovery fees and provided fast-track regulatory approvals. The land was purchased from a Phoenix family Tekoa executives knew, who gave the developers a free, two-year option on the 10-acre parcel and eventually sold it to Safe Place for about a 20% discount to market, according to Lee.
Of the 184 units, about 35 have been rented to residents of Safe Place. Forty-four units are reserved for households earning 30% or less of the area median income (AMI), 30 units for those earning 40% or less of AMI, and 28 units for those earning 60% or less of AMI.
Grove Place accommodates special-needs families with 18 units for mobility-impaired residents and another four units for those with vision or hearing impairments.
When the apartments opened in October, the first to move in was a woman with three kids – including a newborn – who had been living at the shelter for 60 days, and a woman who had been living in her car for the past four months. “She walked in the door and just burst into tears,” Lee recalled.
Grove Place Apartments
Developer: Tekoa Partners
Number of units: 184 units
Number of affordable units: 146
Unique feature: The project provides a permanent home and services for victims of sexual or domestic violence.
Key sources of financing
Equity from 9% low-income housing tax credits provided by PNC Financial Services Group: $6.8 million.
Laredo National Bank, 18-year loan amortized over 30 years at 7.48%: $6.5 million
State of Texas Housing Trust Fund, 25-year soft second mortgage at 0% for five years; $5,000 per year principal payments for remainder of term; non-amortizing: $100,000
Total development cost:$14.8 million