An area of green grass and trees off Dr. Robert Smith Parkway, near Jackson State University, may soon become a mixed-income housing development.
Chartre Consulting, LTD, of Oxford is working on plans and negotiations with the JSU Development Foundation, which owns the land, to purchase the land and build more than 150 attached townhouses there.
JSU Development Foundation is a non-profit organization, separate from the university. JSU Vice President of Institutional Advancement David Hoard said he and JSU President Carolyn Meyers are on the board ex officio, or by virtue of their university office. He said the development has been in the JSU Development Foundation plans for a while, part of Phase 2 of One University Place, a mixed-used development of houses, apartments and retail stores that opened in April 2011.
"I see (the development) as a great opportunity for staff housing (and) faculty housing," Hoard said in a phone interview July 16. "It provides more people in the neighborhood, (who will) take advantage of more of the retail aspects of One University (Place), stabilization of the community, and even housing for graduate students and others who may be interested."
Under the plans, Tax Increment Financing, a TIF, will fund a large portion of the housing development. TIFs allow developers to use future increases in property-tax revenue due to increased property value to repay debts accrued in their building projects. Through the tax financing, Chartre will make the townhouses available in to low-income families. If Chartre is able to get the TIF, they will also look into other funding streams to make more townhouses available in workforce and market-rate financial brackets.
Low-income townhouses will be available to families that make no more than 60 percent of the median area income. For a family of three in Jackson, the 60-percent household income cutoff is $31,800, according to the U.S. Department of Housing. The maximum for a family of five is $38,160.
Half the workforce income townhouses will be available to households with up to 80 percent of median-area income, and the other half will be available for households that make up to 120 percent. The maximum income for a family of five at the 80-percent level would be $50,880, or $76,320 at 120 percent.
Market-rate townhouses would not get tax financing to assist buyers. Acceptance would depend only on buyer's credit and ability to afford the townhouse at the market rate. David Kelly, director of planning, design and entitlement for Chartre, said Chartre will attempt to sell the market-rate townhouses as soon as they are ready. They will, however, lease the townhouses until they find buyers, if needed.
Chartre will lease the townhouses, which they will build in complexes of two to four units, to tenants and manage the property for the first 15 years after completion. At the end of the 15 years, the townhouses will be available to purchase. Tenants will be able to buy the townhouses at reduced rates, which will depend on the financial bracket renters leased the house in and how long they leased it.
A low-income family who leases a townhouse for 15 years will get guaranteed approval on a loan from Chartre to purchase their townhouse for about $50,000, with no down payment required. The purchase price is determined based on length of the tenant's lease, in three-year increments. So a tenant who leased the house for 12 years would have to pay more than one who leased it for the entire 15 years.
Chartre will make the townhouses not purchased by tenants available to the public to purchase at market rate at the end of the 15 years. They will continue to lease the houses until they sell them.
Kelly said the company has been building developments on the 15-year lease-to-own format for almost 15 years. He said the average yearly tenant-turnover rate is about 5 percent, meaning that after 15 years, about 25 percent of the original tenants remain.
The development near JSU would be Chartre's first mixed-income development, though the company is no stranger to TIF-funded housing developments. Chartre has built low-income housing projects across the South, including the Timber Falls development in south Jackson. Timber Falls includes the Forest Hill Place and Cedar Grove subdivisions. Combined, the subdivisions have 325 single-family homes, all of which are low-income financed housing.
Tenants at Timber Falls are on a similar 15-year plan as the one proposed for the west Jackson development. Celeste Womack, property manager at Cedar Grove, said there is a waiting list for every home in the subdivision.
One of the biggest reasons for turnover in the development is eviction. Womack said she has to take submit paperwork to the Hinds County Justice Court when tenants are past due on rent, which is a common occurrence. In an average month, she said, she has to turn in about 42 tenants for not paying.
Most pay up once they learn Womack has filed court papers; the others head to court. When the JFP interviewed her July 13, Womack said she or her assistant were in court over unpaid rent four days that week.
Kelly said the west Jackson townhouses will likely be valued close to $150,000 in today's market.
Some citizens voiced concerns at a public meeting at Koinonia Coffee House July 10 that Chartre will cut corners on construction to make a better profit, ultimately leaving the community with low-quality housing.
Former Ward 5 Councilwoman Bettye Dagner Cook said at the meeting that she is against the proposal.
"It is mind-boggling that we've got people sitting in this room that don't live in our area that are stakeholders," Cook said. "It's so ironic that they can claim for my neighborhood—because I grew up in this neighborhood and was born in this neighborhood—that you can tell me that this is going to stabilize my neighborhood. I think it's unfair."
Since Chartre will manage the property for 15 years, Kelly said, they have no desire to build townhouses that will not last. He said Chartre builds the townhouses to have a 75-year life cycle.
"We're going to make money," Kelly said. "We're developers. If we're not making money, we're not going to be here tomorrow to make sure that thing is going to last."
Kelly said Chartre will use money to reinvest in the community helping build community centers and recreational areas.
Chartre will continue to rent out the unsold townhouses after the 15-year point and attempt to sell them all at market rate.
At the Koinonia meeting, Kelly said that there will be no difference in the low-income, work-force or market-rate townhouses. Chartre will build all townhouses the same, but they will use tax increment financing to help make some of them affordable for different income brackets.
Chartre plans to make 60 to 80 units available in the low-income bracket, about 55 available in work force, and 45 to 55 at market rate.
Comment and email Jacob Fuller at Jacob@jacksonfreepress.com.