Study claims affordable housing needed downtown 

The Mobile City Council’s debate over using $8 million in federal coronavirus aid money to fund part of a $32 million affordable housing project across from Bienville Square comes as downtown hospitality workers have fewer housing options in the city’s central business district. 

If the council gives its approval to the project, the city’s $8 million share of a portion of its American Rescue Plan Act (ARPA) allotment would be invested in a Gulf Coast Housing Partnership (GCHP) plan to convert the former Gayfer’s building into 95 affordable units, open to those making $32,000 or less per year. 

Rents at the proposed property would range from around $600 to almost $900 per month for one-bedroom to three-bedroom layouts, GCHP Executive Vice President for Real Estate Development Tom Champion told councilors at an Entitlement Committee meeting Tuesday, May 31. This is roughly half what the market rate dictates rent should be in the downtown area. 

According to ApartmentLiving.com, studio apartments in the area rent for around $1,000 per month, one-bedroom layouts rent for $1,380 per month, two-bedroom apartments rent for $1,388 per month and three-bedroom places rent for $1,517 per month. 

There are currently “affordable” apartments available for rent downtown, according to a recent search, but anyone under the age of 62 who is not disabled is not eligible to move in. 

Cathedral Arms, on Conti Street, is open to those residents 62 and older. The rent is 30 percent of the resident’s gross income. This rate includes utilities. Income for residents cannot exceed $21,000 per year. 

Cathedral Arms has 192 units, is not currently at full capacity and is owned by Alco Management. 

Farther west on Conti sits Baptist Oaks. The property is open for renters 62 and older and for those who have a mobile disability. Baptist Oaks is a dual subsidy program that, like the proposed GCHP project, includes low-income housing tax credits from the U.S. Department of Housing and Urban Development (HUD). Like Cathedral Arms, rent is 30 percent of the renter’s gross income. The price also includes utilities. On average, this means a tenant would pay just $235 rent on a $1,395 property, according to the market rate. HUD would be responsible for the rest. Government Street First Baptist Church owns the facility. 

Affordable housing need

A market study commissioned by the Downtown Mobile Alliance and used by GCHP as part of the project shows a clear need for housing for residents who work downtown and live within a 20-minute walk of where they are employed. 

The study, done from May 1, 2021, to April 30, 2022, by Placer.ai, shows 11,740 total employees in the downtown district, who make a median income of $41,783. Those 11,740 employees work in 535 businesses in the area, according to the study. Of those employees, more than 30 percent work in either hospitality or food service. 

Almost 4,000 of those 11,740 employees make between $20,000 and $30,000 per year. That means slightly more than 30 percent of them would be eligible to live in the Gayfer’s building project once completed. Another 5 percent, or close to 600 of those employees, make less than $35,000 per year, according to the study. 

Possible vote

It’s unclear if there are currently five members of the council who would vote to approve the project, as many members had questions during the Entitlement Committee meeting. One concern for councilors was related to parking. GCHP has planned just 41 parking spaces, both covered and uncovered, for 95 units. 

District 2 Councilman William Carroll also noted the price breakdown for each of the 95 units, which range from 600 to 900 square feet each, arguing that it came to about $300,000 per unit. 

“How many of us own a $300,000 house that is 600 to 900 square feet? Carroll asked. “If I could build a $300,000 house in the Bottom and give it away I would.” 

Others questioned if affordable housing could even be put in the area because, according to new census data, the downtown tract was not considered economically disadvantaged. 

Senior Director of Community Development James Roberts said census tracts aren’t considered when picking spots for affordable housing. He also told Carroll that the decision to use the money for the Gayfer’s project outside of the intended scope of ARPA would not matter, as the city has already received that portion of the funding. 

Champion said placing the housing units in the building downtown that they bought in 2015 would not impact the nonprofit’s application for 4 percent, low-income housing credits — which makes up $11 million of the project — because the applications were submitted last year before the area was removed from the economically depressed definition. 

“The downtown census tract has completely changed from 2015 to 2021,” Carroll said. “I believe in mixed-use [mixed-income] development, but does it make sense for this property at this point in time?” 

Another issue with using 4 percent tax credits for the project, Carroll said, is other projects using those same low-income housing credits could not start until the GCHP project was completed. 

The council voted 5-2 Tuesday to hold the matter over for further consideration next week.