The City of Houston’s June announcement that it is investing more than $52 million in federal Hurricane Harvey Recovery Program funds toward developing 624 affordable rental homes has implications for the area as two pending developments will benefit.
Avenue CDC, a nonprofit that had previously announced plans for its Avenue on 34th development where Doyle’s Restaurant now stands, was awarded $7.4 million for its 70-unit project. The city’s Housing and Community Development Department said the Avenue project is part of an area “experiencing high rental costs that cause displacement of low- or moderate-income households.”
A 114-unit project by Magellen Housing TX and Royal American Development will be located at 900 Winston St. off of West Cavalcade Street. The award amount for 900 Winston is $9.25 million. The HCDD said the development would be in an “area of low poverty concentration.”
Ray Miller, public facilities assistant director for the HCDD, said 11 developers were selected for awards among 59 applicants.
“Avenue on 34th stood out due to Avenue’s successful history developing affordable housing in the Near Northwest neighborhood,” Miller said. “Avenue’s application to develop in the area was an opportunity to preserve low to moderate households in a gentrifying area.”
Avenue Executive Director Mary Lawler said the city established a process in which developers submitted applications requesting financial support for future projects through the disaster recovery funds.
“This support is often in addition to tax credit support,” Lawler said. “In Avenue on 34th’s case, we will be utilizing 4 percent tax credits from the state.”
As Lawler explained at a spring Oak Forest Homeowners Association meeting, some of the units in Avenue’s development will be offered at market rate, while the majority would be restricted.
“Twenty percent of the units at Avenue on 34th will be market rate units, Lawler said. “The award from HCDD and other financing allows Avenue to do this.”
Miller said all the selected projects which will provide affordable homes for low- to moderate-income families throughout the city will be funded from a combination of funding sources, such as housing tax credits, private debt and private equity, with the leveraged cost totaling more than $61 million.
Notifications for 9 percent housing tax credits – the Winston development received one – were announced first because of a deadline issued by the state to close in November. The notification for the other credits, such as Avenue’s 4 percent credit and conventional funding, were announced the following week.
Any new award recipients will be posted to the HCDD’s website. Allocation amounts may vary at the time of Houston City Council approval and are subject to revision.
Lawler said the $7.4 million Avenue is slated to receive from the HCDD is approximately half of the total budget for the development, which is $14.8 million.
“Our Avenue on 34th project remains in development at this time,” Lawler said. “Avenue is pleased with this funding award by HCDD and will be working to secure other necessary funding sources in order to move forward with this development. We are excited to help add to the affordable inventory of homes in the community.”
Lawler said disaster recovery is a years-long process.
“As we continue to recover from Hurricane Harvey, it is important that we continue to allocate and invest disaster recovery funds in housing solutions that are healthier, more affordable and more sustainable for our city’s future,” she said.