Newport Workforce Housing Project Quickly on the Rise

By Richard Girard
EAGLE TIMES PUBLISHER
NEWPORT, NH — If all goes as planned, Newport will be home to 42 new units of workforce housing, thanks to a project underway on Spring St., by mid-October. Dubbed the Spring Street Development, the $13.1 million project will contain 18 two bedroom, two bathroom apartments and 24 one bedroom, one bathroom apartments. The two bedroom units will be approximately 900 square feet. and the one bedrooms will be about 600, according to developer Jack Franks, President and CEO of Avanru Development Group Ltd., which is headquartered in Walpole, NH.

While Franks said the rents had yet to be determined, the project will only be allowed to house people with household incomes of 60% or less of the Area Median Income in Sullivan County, because about $8 million in federal affordable housing tax credits are being used to finance the project. Rents, which he said could be as much as $500 per month below market rate, will include utilities, an allowance for which won’t be known until sometime in August.

Additional funds for the project come from the Invest NH program, a mortgage that his company will hold and what he called “development funds” from Avanru. Franks explained that he had to apply for the federal tax credits which, once approved, were issued by the New Hampshire Housing Finance Authority (NHHFA). Those tax credits are then sold to investors, in this case R4 Capital of New York, and don’t have to be repaid by the developer. This dramatically lowers the project’s operating costs, enabling lower rents.

The NHHFA also administers the state’s Invest NH grant program for developers, which is intended to offset construction costs for affordable housing projects. Franks said he will also get a mortgage from the Authority to pay off the construction loan obtained to build the project.

To determine the rents, Franks said an outfit called Novogradac publishes allowed rents using data from the U.S. Department of Housing and Urban Development. A utility allowance is also part of the equation. That allowance can be determined either by using data from NHHFA or by conducting a utility allowance study. Franks has opted to do the study, believing it will enable lower rents.

The process of building this project began with applications to the Newport planning and zoning boards in 2020. They were required before an application for the tax credits financing could be made. While the town approvals came relatively quickly, the process of qualifying for the tax credits and assembling the other financing took over a year and a half. Ground for the project was broken this past March.

Franks said the project will make a payment in lieu of taxes (PILOT) to the town. The amount to be paid will be determined by formulas that take a variety of factors, such as the project’s income, into account. He expects the PILOT to the town will be about $100,000 annually.