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Saturday, February 24, 2024
Feb. 24, 2024

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Vancouver Housing Authority plans to renovate Esther Short Commons; building’s value helps pay for renovations

Work will be funded by low-income housing tax credits

By , Columbian staff reporter
Published:
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Rain falls over the Esther Short Commons apartment building in Vancouver. The building will receive a new roof, flooring and more.
Rain falls over the Esther Short Commons apartment building in Vancouver. The building will receive a new roof, flooring and more. (Taylor Balkom/The Columbian) Photo Gallery

After The Columbian reported that Vancouver Housing Authority planned to renovate its 72-unit Cougar Creek Apartments in Hazel Dell, a project that the quasi-governmental agency estimated in public documents would cost $38 million, many people had questions about why the renovations were so expensive.

When the Vancouver Housing Authority renovates apartments — like Cougar Creek or Esther Short Commons, which it recently announced it would rehabilitate — the agency includes the value of the building in its estimates. Staff said the agency chose to renovate the apartments because it’s important to maintain existing affordable housing in the community.

Victor Caesar, chief real estate officer at Vancouver Housing Authority, said the cost of the building is included in estimates for renovation projects because if someone has owned the building for longer than 10 years, they receive tax credit on the value of the building.

Essentially, the building’s value helps fund the renovations.

Tax credits are a common funding source for affordable housing renovations, which often rely on a mix of funding, including public funding.

Caesar said it’s important to note there are no local funding sources included in the renovations of Cougar Creek Apartments or the 160-unit Esther Short Commons.

The agency told the Vancouver City Council on Monday that Esther Short Commons, 555 W. Eighth St., would receive upgrades.

The renovations are entirely financed by low-income housing tax credits, the issuance of bonds paid for by the project’s operations and a Vancouver Housing Authority loan.

“The VHA loan is just the value of the building being put back into the project, which generates additional tax credits but makes the project’s overall budget appear larger than it really is,” Caesar said.

Taking out the $10.5 million value of the Cougar Creek Apartments still leaves the costs of the renovations at about $380,000 per unit. After subtracting the $24.5 million value of the building, Esther Short Commons will receive renovations equal to about $100,000 per unit.

“Renovations of anything are expensive,” said Mike Lamb, a broker with Windermere Stellar.

Esther Short Commons will receive a new roof, flooring and appliances, as well as exterior and interior painting, elevator upgrades, security upgrades and repurposed amenity spaces.

Cougar Creek apartments’ renovations include air conditioning and solar power installation, new bathrooms and kitchens, and an exterior coat of paint.

Adding new bathrooms, kitchens and air conditioning can be some of the most expensive renovations to make, Lamb said.

Vancouver Housing Authority is also lowering the income limit for who can live in Cougar Creek Apartments to people making 60 percent of the area’s median income ($47,400 for a single person or $67,680 for a family of four), which will make the mixed-income units even more affordable.

But why doesn’t the Vancouver Housing Authority just buy new buildings when the costs of the renovations are close to or higher than the buildings’ values?

Lamb suspects buying new buildings would be even more expensive.

“The average apartment unit, I think, is selling between $200,000 or $300,000 per unit today,” he said.

On top of that, apartment buildings for sale with that many units are not plentiful in the area, he said.

Caesar believes that if Vancouver Housing Authority sold Cougar Creek Apartments and Esther Short, the community would lose many units of affordable housing, despite the fact that the buildings are required to stay affordable for a certain amount of time.

“What happens a lot across the country is that market-rate, for-profit developers will buy it and then operate until the end of that period,” Caesar said. “And then, at that time, they then convert it to market-rate housing.”

It’s also important to maintain existing housing in the community, he said.

“Just because someone lives in affordable housing doesn’t mean it should be falling into disarray,” he said.

“I think (when) you look at public housing across the country, there’s a reason that they’re getting rid of it because the government didn’t fund maintenance and investments in those.”

Studies show families with low incomes may be more likely to live in older homes and homes with greater risks that can affect their health.

“So you have the stories of elevators going out and towers and lead in the water lines,” Caesar said. “It’s because there’s no investment in that.”

The renovations for Cougar Creek Apartments will begin in February or March and renovations for Esther Short Commons will begin around January.

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This story was made possible by Community Funded Journalism, a project from The Columbian and the Local Media Foundation. Top donors include the Ed and Dollie Lynch Fund, Patricia, David and Jacob Nierenberg, Connie and Lee Kearney, Steve and Jan Oliva, The Cowlitz Tribal Foundation and the Mason E. Nolan Charitable Fund. The Columbian controls all content. For more information, visit columbian.com/cfj.

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