A debate over the need for more affordable senior housing broke out at the Covington City Council meeting Monday, as the Council considered whether to provide monetary support to a proposed $9 million private complex.
The Council ended up voting 3-2 in favor of loaning $450,000 — through the Covington Housing Authority — to a proposed $9 million, 60-unit affordable senior living apartment complex that would be located at the entrance of the Walker’s Bend subdivision. Councilmen Keith Dalton and Chris Smith opposed the motion, while Councilwoman Janet Goodman was absent.
The government loan was requested because the company proposing the project, Affordable Equity Partners, depends on receiving state tax credits in order to make a profit on its affordable-living complexes. The public loan gives the company an advantage in the competitive application process to receive tax credits; the city loan won’t be used unless the company receives the tax credits.
Councilman Chris Smith said he didn’t support giving public money to the project because the affordable apartments would bring down the city’s per capita income, which is necessary to recruit more and higher-end retail stores.
He said Covington-Newton County Chamber of Commerce officials have talked about the need to raise the per capita income for years, and Smith said city officials needed to also look at more high-income housing to create more balance.
Councilwoman Ocie Franklin said the difference is that the complex would help low-income seniors, not just low- income residents.
Councilwoman Hawnethia Williams said she thought it wasn’t right to place a stigma on senior citizens and kick them to the curb to focus on upper echelon people. She said those citizens pay taxes too and noted that the senior population is one of the fastest growing populations in the company. The affordable senior housing complex built by Affordable Equity Partners in Covington on Reynolds Street, Harristown Park, has a waiting list of 2,500 people.
Both women said the city has already made a large investment in Walker’s Bend and shouldn’t stop now; the neighborhood was on the verge of becoming a slum when the city began investing local funds and federal housing grant funds into the neighborhood to turn it around.
Smith asked the representative with Affordable Equity whether preference could be given to local residents as not all of the residents of Harristown Park were living in Newton County before moving into the complex. The representative said she would check, but that the answer would likely depend on any state regulations that accompany the tax credits.
If Affordable Equity gets the tax credit, the city would loan $450,000 to the Covington Housing Authority, which would in turn loan that money to Affordable Equity. The company would then purchase two lots – one building would go on each lot – totaling 1.78 acres from the Covington Redevelopment Authority for $300,000.
The Redevelopment Authority, which was created by the Council to redevelop housing in the city, purchased the lots originally for a small fraction of that cost but is able to sell them for more because of the proposed density, which would be much greater than the original single-family zoning. The $300,000 would go to pay off part of the loan the city originally gave to the Redevelopment Authority previously, meaning the city would immediately recoup part of its $450,000 loan.
In addition, the city would get $135,000 in utility tap fees and meter costs from the development; that money would go to the applicable city departments as revenue.
The city’s loan to the Housing Authority would be repaid over 10 years with an interest of the lower of 2.5 percent of the applicable federal rate.
Affordable Equity applied to the state tax credits in prior years but has not yet been awarded any.