200 Beaufort Co. housing units will get a face-lift. New kitchens, bathrooms in $49M deal
A national developer is investing almost $50 million in acquiring and redeveloping more than 200 affordable apartment units in Beaufort and Hilton Head, with assistance from the Beaufort Housing Authority. Housing officials say the acquisitions and upcoming large-scale improvements will protect the region’s limited supply of affordable housing.
Vitus Group LLC, which buys and renovates affordable housing nationwide, is preparing to begin interior and exterior face-lifts at the 112-unit Hilton Head Gardens, 11 Southwood Park Drive, and the 88-unit Spanish Trace, 2400 Southside Boulevard, Beaufort, in early 2022.
“The good thing is they are keeping it affordable,” said Angela Childers, executive director of the Beaufort Housing Authority of the two projects, as opposed to changing rents to market rate.
Among the improvements will be new kitchens, bathrooms and appliances for all units. Outside, new playground equipment and updated signs are part of the work. Windows will be replaced at Spanish Trace.
The purchase and overhaul of the aging units comes during a marked rise in population and a housing crunch in Beaufort County.
Over the past 10 years, the county’s population has increased 15.34%, from 162,233 to 187,177, according to the 2020 U.S Census data. And a 2018 housing needs assessment commissioned by Beaufort County found 142 vacant multifamily units among almost 6,000 units inventoried as part of the report, a 2.4% vacancy rate compared to a healthy rate of 4% to 6%.
The lack of available units was more pronounced for housing serving the lowest incomes, with long wait lists, the report said.
“There appears to be a development opportunity for a variety of rental products, particularly for affordable rentals,” the report says.
Since 1993, Vitus Group has developed and/or acquired more than 10,000 units of affordable housing at more than 100 properties located across 29 states. It purchased Hilton Head Gardens in July and Spanish Trace in November 2020.
Development costs of Spanish Trace apartments is $21.6 million, and $27.8 million for Hilton Head Gardens, Vitus Group says. That includes the cost of acquiring the properties and remodeling them.
The Beaufort Housing Authority is assisting Vitus with financing by issuing multifamily housing revenue bonds, which will serve as mortgage loans to Vitus and qualify the projects for federal and state low-income housing tax credits.
In October, the Beaufort City Council, at BHA’s request, unanimously approved resolutions approving the Housing Authority’s issuance of $25 million in bonds for the two projects. That funding will cover the costs of acquiring the properties and some of the construction costs, said Paige Miyazaki of Vitus Group.
Approvals still needed
It’s not a done deal.
Hilton Head Town Council still needs to vote on the bonds. Approval also is needed from the State Fiscal Accountability Authority.
The Beaufort Housing Authority is authorized to make mortgage loans for residential housing without any other local approval. But federal law requires OKs from elected public bodies with jurisdiction over the locations of the projects and the issuer of the bonds.
The communities and BHA will not have any liability in the arrangement, Childers said.
Vitus Group’s Miyazaki says the projects will preserve both properties as quality affordable housing, and benefit surrounding neighborhoods a well.
To live at both apartment complexes, residents must fall under 60% of the area’s median income. All of the units are also covered by Section 8 Housing Assistance Payment contracts, which will be renewed for 20 years. Under the Section 8 program, residents pay 30 % of their monthly income.
A January construction start date is anticipated, with a construction completion target of December.
Construction will occur for only a few hours a day to ensure that no families need to be transplanted, Miyazaki said. The only residents who will be displaced are those living in units that are out of compliance with Americans With Disabilities Act rules, Miyazaki said. Those units will need additional work. Residents of those units will live in extended-stay housing for three weeks during the work on those apartments, Miyazaki said.
The impact on the neighborhoods, she said, will be minimal as there is no new construction involved.
