A new method of construction is bringing more affordable housing to Fishersville, Va.
It’s no secret that we are living longer. Today, there are more than 46 million adults age 65 and older living in the United States. That number is projected to double by the year 2050.
While living longer is a good thing, it also has some challenges. In the housing world, an older population living on fixed incomes means a need for more housing – and not just any housing – but the kind that is affordable, accessible and safe.
How do we tackle that? We get creative and encourage others in our industry to do the same.
In the small town of Fishersville, nearly 27% of the adult population is over the age of 65. Compared to other towns throughout the state, that’s relatively high. In fact, in Virginia, seniors only make up about 16% of the population, according to the United States Census Bureau.
Long-time real estate developers William and Richard Park of Charlottesville-based Pinnacle Construction and Development Corp. recognized the need for senior housing in Fishersville but were struggling with how best to build an attractive, affordable apartment complex while keeping costs down and shortening construction time.
“I thought, ‘what is something we could do that is different than how we typically do garden style apartments in this area,’” said William Park.
The answer? Modular construction.
Modular construction is a process in which a building is constructed off-site in a manufacturing facility and then delivered to the job site where the prefabricated pieces are assembled. The process is considered eco-friendly, cost-effective and usually takes a lot less time.
Intrigued by the process, the Parks put together a proposal for a development called Gateway Senior Apartments – an affordable 80-unit, one- and two-bedroom apartment complex for adults age 55 and older. All of the units would be income-restricted with rent at or below 60% of the area’s median income.
Another bonus is the development’s location. The senior apartments will be less than a mile from the Augusta Health Regional Hospital and just across the street from an assisted living community and medical offices.
Putting the Pieces Together
The creative idea behind Gateway Apartments led the Parks to apply for funding through Virginia Housing’s new Innovative Demonstrations Program. The program seeks to spur more affordable housing by supporting technological innovation in the housing industry. To qualify, projects should use generally available technologies and techniques that vary significantly from approaches usually taken in housing construction and they must be below the median cost of new single-family housing in the region of the proposed site.
A panel of housing experts reviewed the Parks’ proposal and awarded them 9% federal Housing Credits, equal to $ 14 million. From there, the Parks applied for financing through Virginia Housing and received $6.4 million.
“This is the first time we’ve financed a modular apartment complex,” said Kristina Armistead, Development Officer with Virginia Housing. “That’s what makes this project so unique.”
Armistead worked closely with the Parks on the financing side. She said the development not only meets a great need in Fishersville, but as the first modular constructed building in the area, it could open the door for future similar developments.
The Parks are also working with The Richman Group, which is funding the Housing Credit equity, and Merchant’s Bank, which is providing the developers a bridge loan during construction.
In their 35 years of experience, this will be the Parks’ first time using modular construction, and they are looking forward to starting work.
When the prefabricated buildings arrive, they will be 75% complete. Pinnacle will tie in all the mechanical systems like HVAC, plumbing, sprinkler and electrical, while performing the exterior work such as brick, vinyl and the roof.
“There is a lot of coordination between our architect and the modular builder’s design team,” said William Park.
A project like this typically takes between 18 and 22 months, but modular construction should shorten that time frame by six to seven months.
The Parks plan to break ground by December 2020, and the project is scheduled to be completed by the end of 2021.