New Development and the History of Pauline Apartments

A History of Pauline Apartments

Pauline Apartments, Avalon’s newest affordable apartment complex, is currently under construction on the west side of Ann Arbor.  Pauline Apartments will be the second newly-constructed permanent supportive housing project in Ann Arbor designed for families who have experienced homelessness. Avalon Housing’s first project of this nature was Carrot Way Apartments, which opened in 2005.

The development process began with two years of complex planning during the feasibility stage. Obtaining the necessary approvals and financing to make the project possible is a long and complicated process, involving agencies at the local and state levels.

The development is expected to be complete in December 2013 and anticipates being fully leased up in January of 2014.

The Redevelopment Process

The location of Pauline Apartments was previously home to Parkhurst Apartments. Parkhurst was funded through the Low-Income Housing Tax Credit (LIHTC) program. The community was already in need of redevelopment when Avalon was first engaged, because the previous owners were not able to continue managing the property.

Avalon was initially asked to assist with the preservation of the property and applied to government agencies for funding to rehabilitate the 47 apartment units in 2009.

Following a site visit, Michigan State Housing Development Authority (MSHDA) staff suggested that rehabilitation of the existing structures was not as financially feasible as new construction on the site would be. Avalon separately commissioned an architectural and engineering study of the site which came to similar conclusions. With the intention of preserving low-income use on the site, the plan for Pauline Apartments emerged.

Site plans were developed in 2010 and approval was granted in early 2011. Avalon hosted a number of meetings, both with tenants of the complex and with neighbors. These discussions helped guide design decisions. Pauline Apartments will include 32 units in five two-story buildings with a centrally located community center. The new units will include a combination of three-bedroom townhouses and one-, two- and three-bedroom apartments. This is a reduction of units from Parkhurst, but design and zoning considerations determined that 32 units were more appropriate to the site. The critical value of affordable three-bedroom units guided the final unit size and mix.

The chart below shows Avalon monthly rents compared to Fair Market Rents in 2013.

Apartment Size Fair Market Rents Avalon Rents Units in Pauline Apartments
1-bedroom $760 $270-439 6
2-bedroom $901 $347-531 14
3-bedroom $1,232 $435-870 12

Financing Supportive Housing

Funding applications for the project were submitted throughout 2011. Financing for the project includes Low Income Housing Tax Credits, MSHDA HOME funds, Washtenaw Urban County CDBG funds, Federal Home Loan Bank Affordable Housing Program funds and a deferred developer fee.

This array of financing required separate applications to the state and county, as well as the Federal Home Loan Bank of Indianapolis. Private financing for construction was also a critical piece, with a construction loan coming from Chelsea State Bank and United Bank and Trust.

Of course, public subsidy is tied to affordability. The proposed LIHTC income caps include 12 units at 60% of area median income (AMI), 4 units at 50% AMI and 16 units at 40% AMI. Pauline Apartments will include 16 project-based rent subsidy vouchers which will all be reserved for tenants with special needs or who have been homeless and who also have incomes at or below 30% AMI.

The chart below shows the HUD calculated annual income and affordable monthly rent levels for one- and four-person households in Washtenaw County in 2013.

1-person household     4-person household  
Annual Income Affordable Rent   Annual Income Affordable Rent
Area Median Income (AMI)   $59,000 $1,475   $84,200 $2,105
80% AMI (Low Income)   $47,200 $1,180   $67,360 $1,684
60% AMI   $35,400 $885   $50,520 $1,263
50% AMI (Very Low Income)   $29,500 $738   $42,100 $1,053
40% AMI   $23,600 $590   $33,680 $842
30% (Extremely Low Income)   $17,700 $443   $25,260 $632
15% AMI   $8,850 $221   $12,630 $316

The development secured the necessary financing in 2011 and closed in early summer 2012. Existing tenants were relocated and demolition and construction work began in October 2012. The Parkhurst tenants who were relocated are being given the first opportunity to fill out an application for the new development and the remaining units will be filled from an existing waiting list for Avalon apartments.

Supportive Housing in the Community

When, in 2009 and 2010, it became evident that simply rehabilitating the existing apartments was not a feasible option, there was shared concern about losing valuable affordable housing units. The location of this development raised this worry even more.

Pauline Apartments is located in a stable, residential neighborhood of primarily single-family ranch homes with other apartment complexes further west along Pauline. The location provides proximity to bus service that allows tenants to have access to downtown, shopping and employment opportunities in Washtenaw County. It is the kind of location that could easily support market-rate developments and provides low-income families with the advantages of integrating into the larger Ann Arbor community. The successful redevelopment of the site that preserves its affordability, while significantly improving the quality of the housing, points to the importance of this housing.

As supportive housing, Pauline Apartments does more than just provide affordable rents.  The Pauline Apartments community center will have staff who will provide both child- and adult-focused programming. As with all of Avalon’s supportive housing communities, tenants are eligible for an array of supportive housing services that focus on helping tenants achieve and maintain housing stability. 

Although the path to Pauline Apartments took some unpredicted turns, Avalon is proud that we were able to stick with the process and preserve affordable housing at this site.  We will provide updates as the construction is completed and we look forward to a ribbon-cutting when the units are done.  More affordable housing options remain a critical need in our community and additional supportive housing units are a key element in ending homelessness.  Pauline Apartments significantly advances both of these efforts. 

Please contact Wendy Carty-Saxon for additional information regarding Pauline Apartments at wcarty-saxon@avalonhousing.org.

Pauline Apartments July 2013

Pauline Apartments July 2013

5.1 Framing Bldg A 4.05.2013 5.0 Framing Bldg A 4.05.2013 4.0 Foundation 3.07.2013 3.6 Site work 2.07.2013 3.5 Site work utilities 1.03.2013 3.4 Site work 1.03.2013 3.3 Site work 12.20.2012 3.2 Site work 12.5.2012 3.1 Site work 12.5.2012 3.0 Site work 11.2012 2.4 Demolition 11.2012 2.3 Demolition 11.2012 2.2 Demolition 10.10.2012 2.1 Demolition 10.10.2012 2.0 Demolition 10.10.2012

Parkhurst Apartments

Parkhurst Apartments

 

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