The Trailwinds apartment project nearing completion off Veterans Parkway in Garden City puts the new face of affordable housing on display, a far cry from the “projects” and “tenements” of generations past.
Trailwinds, a co-development of local developer VCD and Boise-based Northwest Real Estate Capital Corp., pretty much resembles any Boise apartment complex in the region’s average rent range, except rents start at $414 for one bedroom, $498 for two bedroom and $573 three bedrooms instead of $700 and upward.
The $11.1 million cost of the 64-unit, three-story, 68,000-square foot complex is largely subsidized by nearly $8.5 million in Internal Revenue Service Section 42 low income housing tax credits. The developers qualified for annual tax credits of $848,175 over 10 years by agreeing to maintain Trailwinds as affordable housing for 44 years, said Chance Hobbs, a VCD partner.
VCD and NRECC are covering the balance with a $2.482 million loan from Greystone Servicing Corp. with equity for the tax credits provided by Boston Capital. Section 42 tax credits are funded by private investors who receive dollar-for-dollar tax credits for investing in low income housing projects.
Paying only $2.5 million for an $11 million project enables developers to build affordable housing that mirrors market-rate housing – and even offer some market-rate housing within. The quality and appearance of both will be the same.
“There has been a heavy push in the last 10 years to lose the ability to differentiate between affordable and market-rate,” Hobbs said.
Indeed seven of the Trailwinds Apartments, 417 E. 42nd St., units are market-rate. This meets the 10 percent minimum required to score one point in the 100-point in the Idaho Housing and Finance Association scoring process. IHFA, which issues Section 42 tax credits in Idaho, evaluates which affordable housing projects will receive the $3.7 million in Section 42 tax credits available to Idaho this year.
One point can make a significant difference in the competitive process, said Katrina Thompson, IHFA’s marketing and communications manager. Developers must determine how to balance affordable and market rate, as only the affordable portion qualifies for tax credits while market rate generates higher rents, Thompson said.
“The basic reason for the incentive is to encourage, as much as possible, apartment communities that reflect the general population in which the apartments are built,” Thompson said.
Market rate also meshes with affordable inside the apartments themselves.
“The finishes in the market rate and affordable apartments are the same,” said Jess Giuffré, senior property developer at NRECC. “We are building to market standards.”
VCD partners Hobbs, Vince Spagnolo and Doug Crowther teamed up in January 2014 to build a series of affordable housing complexes in Idaho. Trailwinds is the first but they are looking to build more elsewhere in the state, Hobbs said.
VCD brought on Northwest Real Estate to manage Trailwinds and also co-own and co-develop the property. Northwest is the 51 percent owner.
Northwest manages and mostly owns 64 affordable housing apartments in Alaska, Idaho, Montana, Nevada and Oregon, including 11 Treasure valley apartments properties in Boise, Nampa, Kuna, Caldwell and Payette. Trailwinds, however, is only the fourth new construction NRECC has undertaken, Giuffré said.
“These 64 units will house upward of 200 people,” he said.
Hobbs said rents are set by the U.S. Department of Housing and Urban Development. They are on a sliding scale, depending on income. The most current numbers on May 29 were $414 to $640 for 605-square-foot, one-bedroom units, $498 to $769 for 750- and 932-square-foot, two-bedroom units, and $573 to $887 for 1,076 to 1,109-square-foot, three-bedroom units.
Affordable housing residents must have an income of 60 percent or less of the area median gross income, which for a family of four in Ada County is $36,180 or for one person is $25,380, Hobbs said.
The apartments have vinyl floors, laminate counter tops and carpeting. Each unit has a washer and dryer, a dishwasher, Energy Star appliances and high-efficiency central heating and cooling, he said.
“These are high-quality finishes, though not luxury,” Hobbs said. “I’d live there in a heartbeat.”
Trailwinds should be ready for tenants by the end of August, said Wendell Martin, regional property manager at Northwest Real Estate Capital Corp.
Hutchison Smith Architects of Boise designed Trailwinds and Village Builders of Hyde Park, Utah, is the general contractor.m