Realtex Development was the first company to break ground on a new construction project in the Gulf Opportunity (GO) Zone, according to President Rick Deyoe. Sunset Way Apartments in Port Arthur, Texas, broke ground in July 2006.
“We’re actually almost finished with construction,” said Deyoe. “May 1 is when we anticipate total completion. We’ve been working very closely with the city of Port Arthur. It took a direct hit from Hurricane Rita. Right now, the preleasing is going fabulous, unbelievable.”
The 96-unit project received pre-development loans from the city of Port Arthur and PNC MultiFamily Capital. The latter also provided construction financing and permanent financing. The total development cost is more than $10.6 million. Eighty percent of the units are reserved for households earning no more than 60 percent of the area median income (AMI). The remaining units are reserved for households earning 30 percent or less of the AMI.
Realtex, based in Austin, has completed 2,046 affordable units in 12 properties—11 in Texas and one in Mississippi—at a total cost of $157 million. The developer currently has six projects in Texas under construction at a total cost of $42.7 million.
The company focuses on all areas of affordable housing from family developments to seniors housing, said Deyoe. Realtex is adept at working with local housing authorities and handling different sources of financing: low-income housing tax credits, Community Development Block Grants, tax-exempt bonds, and financing from the Department of Housing and Urban Development.
“I had received calls from some consultants who do work in Mississippi who said the local housing authorities were looking for good-quality developers to create affordable housing with additional tax credits they had received from GO Zone legislation,” said Deyoe. “If we were going to make a presence in Mississippi, we wanted to be along the Gulf Coast in the hardest-hit areas.”
Deyoe’s ultimate goal in 2007 is to build up to 10 affordable housing projects in the GO Zone. So far, Realtex has received approvals for four GO Zone developments in Mississippi: two in Pascagoula, and one each in the cities of D’Iberville and Gulfport. The developer has submitted six additional applications to build apartment communities in Mississippi.
Realtex has contracted with Gulf States Inter-Faith Supportive Services to provide a variety of services to tenants. For 40 years, the nonprofit organization has provided educational programs, job search assistance, health and nutrition classes, social activities, and more under its Good Neighbor Program in apartment communities throughout Alabama, Louisiana, Mississippi, and Texas.
Deyoe said the top three challenges he faces as an affordable housing developer are finding land, overcoming NIMBYism, and coping with increasing development costs. He would like to see an increase in the per capita tax credit in order to offset rising development costs and operating expenses. At press time, Deyoe was meeting with various city officials in Mississippi to promote his firm’s developments.
“NIMBYism is a huge issue for us,” said Deyoe. “From one city to the next, they either want you or it’s ‘not in our back yard.’ We’re educating, trying to tell people these aren’t ‘projects.’ The affordable housing we’re going to build in Gulfport is going to be the nicest apartments in town.”