Yaquina-Southfair
DEVELOPMENT SCOPE
Redevelop a historic dormitory into 51 units of deeply affordable housing; preserve and rehabilitate an aging 40-unit affordable housing community.
PROJECT OVERVIEW
When Salem Housing Authority (SHA) acquired the Southfair Apartments, in 1999, the 40-unit affordable housing community was in poor condition, physically and operationally. SHA turned the property around during two decades of ownership. But as Southfair neared 30 years of age, the challenge of financing a much-needed comprehensive renovation remained unsolved. Then, the City of Salem tapped SHA to redevelop Yaquina Hall, a former nurse’s dormitory on a vacated state hospital campus. The goal: to transform the structure into deeply affordable apartments. With HDC’s assistance, SHA married the two projects, using Yaquina’s financial strengths and the advantages of a larger project size to meet both properties’ needs.
The Yaquina-Southfair team secured financing, including additional project-based Section 8 vouchers, and completed construction at both sites. Today, Yaquina Hall provides 51 deeply affordable homes for people at risk of homelessness, including 20 residents experiencing serious mental illness. Southfair is repositioned to serve residents for decades to come, with new building envelopes, exterior improvements, and two new, fully accessible units on top of the original 40.
Creative Solutions
Finance. As a stand-alone project, Southfair couldn’t generate enough capital to address its preservation needs. But by combining Southfair with the redevelopment of historic Yaquina Hall, SHA met its goals for both properties. The State of Oregon awarded the project historic tax credits, and Oregon Health Authority provided a $6.1 million grant to support the development of homes for individuals experiencing serious mental health issues at Yaquina Hall. Additional funds, listed at right, rounded out the finance package. New and extended project-based Section 8 vouchers cover 91 of 93 units across both properties.
Design and Construction. Working against supply shortages, the design-construction team met aggressive timelines and minimized disruption to relocated residents during the pandemic. At Southfair, windows, doors, siding, and roofs were replaced, grounds and play structures improved, and an unused community building repurposed to provide two new fully accessible housing units. At Yaquina Hall, the team navigated a thicket of environmental and historic preservation requirements. Crews reconfigured the building’s whole interior, except for corridor walls kept intact to meet historic preservation requirements. New community rooms, laundry facilities, and a second elevator were installed, and grounds and sidewalks improved.
Photos of Yaquina Hall by Brian Stone.
SPONSOR
Salem Housing Authority
LOCATION
Salem, Oregon
HDC ROLE
Financial structuring and construction management
DEVELOPMENT PARTNERS
→ AC & Co Architecture | Community
→ Walsh Construction
→ U.S. Bank Community Development Corp.
→ U.S. Bank N.A.
→ Network for Oregon Affordable Housing (NOAH)
→ City of Salem
→ Oregon Housing and Community Services
→ Oregon Health Authority (OHA)
FUNDING SOURCES
→ Low-income housing tax-credit equity (4%)
→ Historic tax-credit equity
→ Permanent loan
→ OHA Mental Health Housing Fund
→ City of Salem CDBG and HOME funds
→ Project-based Section 8 vouchers
→ Affordable housing bond financing for construction
→ General partner equity and deferred developer fee
SQUARE FEET
Residential: 65,269
Common Space: 17,169
Total: 82,465
COST
Construction: $20.5 million
Total Development: $29.4 million
TIMELINE
Winter 2017-18 to Spring 2023