One could easily think that Rowlett was awash in apartment development projects. We have apartment projects developing all around Rowlett. However, that broad brush appraisal of Rowlett's apartment business would be at least myopic. This apartment business is a lot more complicated than you think.
To the best of my knowledge, with the possible exception of one project, all are being built for "market rate" tenants. This means you are probably going to pay at least $1,200-$1,400 a month for a one bedroom apartment.
None of the above markets were represented on Tuesday. All the proposals were based on a "9% tax credit" financing vehicle. I have written about these financing plans, including Housing Financing Corporations, before. See "I've been learning something new," posted on 11/27/6 and "a post script," posted on 11/28/16.
The "9% tax credit" deals are highly competitive. Developers are competing for federal and state tax credits. To give you some idea of the competitive nature, there will only be 8 of these projects funded in a three county area. Rowlett would be lucky to get one, let alone two. These tax credit deals are absolutely necessary to achieve attractive rental rates for seniors and workforce populations. The two most underserved populations in Rowlett are these two populations. These two groups deserve more than Rowlett can currently provide. We have to do something about this. Ergo, the Housing Financing Corporation that is needed. HFCs can help finance single homes, also.
In discussing the tax credit programs, it is easy for the word "subsidy" to enter the conversation. This word will come from someone that has no idea how the program works. This expertise will come from "over the backyard fence" experts. To explain the benefits of the tenants, first one must start by saying that no money is paid to any tenant from anyone. One has to really reach to attach maybe the words, "maybe subsidy" way up to the corporate headquarters of GE, GM, Ford, Exxon, Chase Bank, etc. It is there that the government intices these corporate giants by issuing tax credits in return for their like amount of funding that, in turn, finance the various apartment projects. The revenue from the tax credits then retire much of the debt to the banks, thus lowering the bank payment, thus lowering the rent rate and aiding seniors and workforce families. The lower rents are the result of the government issuing tax credits to corporate giants, not subsidies to tenants. The government did not write a check to anyone, including corporate giants. However, it is true the government created a situation in which some taxes were avoided, but look what they got in return........hundreds of millions of dollars for housing development.
The above is a much simplified version of how it all works, but it is a fairly accurate overview. Remember, when talking about apartments in Rowlett, there is more than one market being considered. Market rate, Seniors, and Workforce are all separate markets. We seem to have plenty of market rate apartments, and little to no senior rental units, and virtually no workforce opportunities. This is not good for a community. The workforce population is what makes this town work.
I want to write more about Rowlett and apartments, but I need to ring off now. Maybe more tomorrow.