Quality Housing and the Affordability Challenges
Delivering quality affordable housing is always challenging. Battling “Not in My Back Yard” also known as NIMBYISM and the financial realities are typically at the top of that list. When our Development Team comprised of NHE, Creative Builders and SCG Development reviewed a RFP in 2016 from Northside Development Group, Spartanburg Housing and the City of Spartanburg, the team was excited about the opportunity for many reasons but knowing that those large challenges would be much less significant. After several months of preparation and planning, the Development Team was selected to be the lead developer of a multi-phase, multi-use project spread across two sites in Spartanburg, South Carolina. The sites were located in the Northside and Highland neighborhoods of Spartanburg. The original development plan envisioned a mixed-use project in the Northside neighborhood consisting of a retail/office, medical clinic, and a mixed income multifamily project. The development plan envisioned for the Highland neighborhood was an affordable housing project utilizing 4% Low Income Housing Tax Credit or LIHTC. The projects were conceived to address affordable housing needs in the City of Spartanburg and provide commercial and healthcare options to the Northside community.
Both Northside and Highland neighborhoods have been identified as redevelopment priorities for the City of Spartanburg. During the selection process, many stakeholders were involved in the review of proposals and vetting of the potential developer partners. The Development Team worked with the various stakeholders to hold neighborhood meetings. The Team received input from the Northside and Highland communities to establish development priorities, refine conceptual plans and finalize design. Additionally, the Development Team navigated the project through the City of Spartanburg’s Design Review Board.
As a result of neighborhood meetings with the Highland community, feedback from the residents made it clear to the Development Team that the neighborhood was not ready for a project of the size and scale that was being considered. A consistent comment that was heard from the community was their desire to complete a Master Plan prior to developing such a large parcel of land. The land in question was vacant public housing community, Cammie Clagget Court, which has a prominent location in the community. The neighborhood decided a Master Plan was needed before embarking on such a large undertaking. The Development Team heard the neighborhood’s comments and decided to abandon plans for developing this portion of the initial development plan and allow the Highland Community to go through the Master Planning process.
An additional portion of the original development plan, the retail/office/residential and medical clinic component, was completed by Northside Development Group without participation of the Development Team although Creative Builders served the project as the general contractor and NHE as the property management company. Northside Station was completed in January 2020.
After years of working on the project and following several iterations of the development plan, the Development Team started construction on 90-unit mixed income project called 500 Northside Station consisting of affordable units targeting individuals and families earning less than 80% Area Median Income (AMI) and market rate units. Located in the Northside community, the project began construction in August 2019 was completed in summer of 2021.
The project consists of one building, featuring 90 residential units. 81of the units are income restricted to individuals and families earning less than 80% AMI, with 54 of the affordable units targeting households earning less than 50% AMI. The project also contains 9 market rate units. Community amenities include a clubhouse with a business center, fitness center, laundry center, outdoor plaza and access to the Butterfly Creek Greenway, a trail that runs along the Butterfly Creek with plans to connect to Downtown Spartanburg. You can learn more on income guidelines and the housing continuum from the 2021 Report on Homelessness in Greenville County on pages 14 – 15.
The project totaled $17.2 million in total development costs which was higher than a typical Low Income Housing Tax Credits (LIHTC) project due to the design expectations set forth by Northside Development Group, Spartanburg Housing, and the City of Spartanburg. The project location being at the intersection of College and Howard streets demanded a more urban and innovative design which translated to an expensive construction budget. The project received $8.6 million in Tax Exempt Bond Financing and 4% Low Income Housing Tax Credits (LIHTC) administered by the South Carolina State Housing Financing and Development Authority (SCSHFDA). Additional funding sources were provided by Stratford Capital Group ($7.49 million in tax credit equity), Cedar Rapids Bank and Trust ($4.95 million First Mortgage), Community Works ($750,000 Second Mortgage), Northside Development Group ($2.25 million in subordinate financing), Spartanburg Housing ($741,000 in subordinate financing), and Department of Mental Health ($200,000 Grant). Of the nearly $7.5 million in tax credit equity generated, $2.25 million was generated from the sale of SC Abandoned Textile Mill Credits since the site was the former parking lot of the Spartan Mill (now the VCOM campus).
Lastly, both the City and County of Spartanburg approved a 50% property tax abatement for 10 years. All of these funding sources were absolutely necessary to make the project come to fruition. It truly takes a village to deliver quality affordable housing. We truly believe not only will 500 Northside Station provide housing options on the entire income spectrum for decades to come but will also be a transformative project in the Northside community.
President of NHE Inc.
The Greenville Homeless Alliance thanks NHE for providing quality, safe, affordable housing options in Greenville County. Thank you to Taylor Davis for writing this blog post to help explain the development process for a best in practice model of mixed income housing. The Greenville Homeless Alliance is proud to have participated in advocating for the development of Renaissance Place which opened in late 2021 as quality, safe, affordable housing for seniors age 55 year and above.