Preliminary plans (above and at right) show what an apartment complex is expected to look like after construction begins in Port Aransas next year. Rents in many of the units are expected to be priced at affordable rates for the town’s workforce, according to city leaders helping make the public-private effort happen. Some 183 units will be built in phases on a piece of property on State Highway 183, just south of Port A RV Resort.
Port Aransas recently experienced new milestones in the city’s efforts to bring affordable workforce housing to town.
The city’s Public Facilities Corporation Board of Directors met on Oct. 17 and approved a resolution for the issuance of up to $19 million in housing revenue bonds to help pay for the planned construction of an apartment complex on State Highway 361.
The bonds will be issued by a partnership of the public facilities corporation and Palladium, a firm that builds apartment complexes. The bonds will be paid off by rental income from the apartments, said City Manager Dave Parsons.
Port Aransas taxpayers won’t be on the hook for it, he said.
Also on Oct. 17, the city council approved a resolution that stated “no objection” to Palladium’s plans to apply to the Texas Department of Housing and Community Affairs (TDHCA) for 4 percent non-competitive housing tax credits.
Palladium will apply for the tax credits in December, according to Tom Huth, president and CEO of Palladium USA International Inc.
Renderings courtesy of Palladium
“We’ll take these tax credits and sell them to an investor – a Bank of America, a PNC Bank, Regions Bank, RBC Bank by example, J.P. Morgan Chase – and then that money gets infused into the development as equity,” said Huth, who attended the council meeting.
“That’s what gives us the ability to complete a transaction like this, which is (for) very high quality, high-end (apartments) with the affordable rents,” he said.
Huth said he expects ground to be broken on the apartments in May or June, with construction to last about two years.
He said a total of 183 units eventually will be built on land that’s being leased from the Texas General Land Office.
The property is on State Highway 361, where piles of Hurricane Harvey debris were stored until it could be trucked away to a landfill near Robstown.
Huth said the first phase of about 50 units will open after 16 or 17 months of construction.
City officials are anticipating that rent at the apartments could be kept low enough to make it easier for members of the workforce to afford to live in Port Aransas.
Over a period of years, a number of factors – skyrocketing property values, an explosion of short-term rentals and decreasing numbers of long-term rentals – have combined to make it hard for folks of modest means to live here. That has made it difficult for employers to fill rosters, especially in the town’s tourism industry.
And, because it’s problematic for young families to move here, the Port Aransas Independent School District has faced enrollment problems, which means less funding from the state.
Over the past year or more, city staff has worked with state officials to pull together $36 million for construction of the complex, with most of the units earmarked for workforce housing.
None of the money is being taken from city revenues coming from Port Aransas taxpayers.
Sources of funding include the TDHCA and $4 million that came about through a rider attached to the state budget approved by the Legislature this year.
City Manager Dave Parsons has said that 25 percent of the units will be rented at regular market rates, without a discount for income.
Part of the reason for that has to do with the involvement of the TDHCA.
“The people that give these tax credits, like the TDHCA – they realize that if you had 100 percent low-market rate stuff, it’s harder to make the project work,” Parsons said during an interview in June.
“They realize to make the financials balance, and to make the project successful, there has to be a component of income that is going to bring in more revenue for the project,” Parsons said. “Almost every apartment project that is an LMI (low-to-moderate income) project has a component like that.”
Households with only a certain range of incomes will be eligible to live in most of the apartments, Parsons said. A household that earns too little won’t be eligible, just like a household that earns too much.
The apartments won’t be available for the unemployed, Parsons said. Potential renters will have to produce W2 forms to show they have jobs.
Details about rents haven’t been announced, but Parsons has estimated that a family that earns about $24,000 to $44,000 a year likely would be eligible to live in apartments at the complex.
Housing discrimination laws won’t allow the apartments to be made available solely to the Port Aransas workforce, but many units will fall into the hands of the workforce simply because so many will be built, Parsons said.
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