The Channel Terrace apartment building in Douglas will be sold to ensure it continues to serve low-income families in Juneau.
The purchase of the 22-unit apartment building by GMD Development is helped by a $290,000 grant and $400,000 in tax credits from the Alaska Housing Finance Corporation. The award is leveraged by a $300,000 grant from the Anchorage-based Rasmuson Foundation.
The 22-unit apartment building had been financed through the U.S. Department of Agriculture. Daniel Delfino, the Greater Opportunities for Affordable Living (GOAL) program manager at AHFC, said the owner of the property had fulfilled their obligation over the years to offer affordable housing and soon would have the option to increase rents to market prices. Delfino said AHFC worked with to keep the apartments affordable by granting tax credits and funding to a Seattle developer and Juneau’s St. Vincent de Paul Society who will purchase the property together.
“We awarded a type of funding that’s not only going to enable a person to acquire the property and preserve it as affordable housing, but in the process they’re going to be able to upgrade the facility and bring it up to code compliance with accessibility features and things like that,” Delfino said. “They’re going to make sure it stays in the affordable housing inventory in Juneau and they’re also going to be able to preserve the rental assistance for those tenants.”
St. Vincent de Paul has partnered with Greg Dunfield, the owner of GMD Development, who previously served at the president of Vitus Group, LLC, a national affordable housing developer and consulting firm.
Delfino said the new owner would be required to keep rents affordable to residents of a certain income level for at least 30 years. The new owner will also have to make upgrades to improve accessibility and energy efficiency.
“In order to do that, they’re going to be monitored. We don’t just take their word for it up front,” Delfino said. “Once the property is done and all the renovations are completed, our compliance team will go out there and monitor the property for the next 30 years to make sure the units are being kept up to code, that all the tenant files are documented and that we are in fact serving the affordable households we were promised when this deal was done.”
Housing in Juneau is hard to come by and losing 22 units with affordable rents would certainly be a major blow to low-income residents in Juneau. In October, the City and Borough of Juneau Planning Commission approved a 75-unit housing development, which will offer some units to low-income residents and some at market rate. Construction on the Douglas project is expected to start next spring; tenants may be able to move in as soon as 2015.
Delfino said that while keeping the Channel Terrace property as affordable housing doesn’t improve the housing situation in Juneau, it at least doesn’t make it worse.
“It’s not adding more housing units to the inventory in Juneau, but you already have a tight market where affordability is an issue and it’s making sure that scarcity isn’t made worse by affordable units leaving the affordable inventory,” Delfino said. “That’s why this type of deal has such a priority in our allocation process.
He added: “It’s much cheaper to preserve and rehabilitate what’s already there than it is to build something new.”
Editor's note: A previous version of this story said that GMD Development was the recipient of $33.2 million in grants and tax credits. That amount was actually the total awarded to projects in five communities across the state. We've updated the story with the correct award amounts. We regret the error.