Chartre Consulting looks to build wealth in low-income communities

May 25—As inflation drives rent higher and increased interest rates raises the cost of homes, finding affordable housing can be a challenge. Even in Mississippi, which has a low cost of living compared to other states, more and more residents find themselves priced out of homeownership and struggling to make rent.

Two projects by Chartre Consulting, however, aim to provide relief for some Meridian residents. Headquartered in Oxford, the affordable housing real estate developer owns and operates several thousand affordable housing units throughout the state and looks to build more in the Queen City.

Chartre Consulting's David Kelly said Meridian provides some unique opportunities for the affordable-housing real estate development company and has a personal connection as the hometown of the company's owner, Clarence Chapman.

Kelly said Chartre is currently working toward the construction of about 50 single-family townhomes in the west end area of town as well as the restoration and renovation of the old Witherspoon Elementary School into a low-income housing facility.

Townhomes

Chartre's lease-purchase townhomes are a unique approach to affordable housing, Kelly said, as the goal is to end up transferring ownership of the home to its tenants. The developer utilizes low-income housing tax credits to keep borrowing costs low, he said, and gives tenants a way to purchase the home after 15 years.

"It's structured so that a family can purchase the home," he said. "That's what Chartre does that's unique."

Kelly said townhome tenants who are unable to secure a conventional mortgage through a bank or other lender will still be able to purchase the home through Chartre after the 15-year period.

Low-income housing tax credits are made available to developers working on rehabilitating, constructing or buying affordable and low-income housing. The federal government passes the credits to state agencies when then pass the credits on to developers of qualified projects.

Once received, developers sell the tax credits to investors to help fund the work, and investors can claim the tax credits once the housing is complete.

Chartre, Kelly said, is looking to receive a 4% credit for the townhomes.

Once built, Chartre will handle all maintenance, repairs, landscaping and other necessities in and around the homes, Kelly said. That way, when tenants reach the point where they can purchase the homes, they are getting a well maintained, quality house.

In addition to the tax credits, Kelly said the developer is talking with the city about a possible Tax Increment Financing to help cover some of the public infrastructure such as water, sewer, roads and sidewalks that will be needed in the new development.

Under a TIF, the city issues a bond to pay for such public improvements with the idea in mind that tax revenues from the new development will go to pay back the borrowed funds.

Witherspoon

Witherspoon Elementary School, built in 1888, is the oldest known public school building in the state of Mississippi. Also called the East End School, the building is listed as a Mississippi landmark by the state Department of Archives and History.

Multiple generations of Meridianites were educated at Witherspoon, which actively held classes for more than 120 years. The building was closed in 2009 and has remained vacant since.

Chartre, Kelly said, hopes to renovate the building and keep it alive as a low-income apartment building. When completed, the building will have 42 apartments along with a playground, offices and a community center.

Renovating Witherspoon is a two-pronged approach, Kelly said, with Mississippi Department of Archives and History wanting to save the historic building and a need for additional low-income housing in the community.

The Meridian Public School District Board of Trustees has already voted to sell Witherspoon to Chartre, and the Meridian City Council on May 2 approved a request to rezone the property to a multifamily residential district.

Kelly said all that is left is to wait to see if Chartre's low income housing tax credit application is approved. While the tax credit for the townhomes is 4%, he said the developer is applying for a 9% credit for the Witherspoon project. The percentage of the credit available is dependent on the type of project being proposed.

MPSD Board of Trustees Attorney John Compton said the district's sale of the building to Chartre hinged on the tax credit being approved. If the project is denied for the credit, ownership of Witherspoon will revert back to the school district.

School board President Sally Gray said the board hoped the credit would be approved as the apartments project would both benefit the community and provide a good use for the old school.

"As are all of our properties, Witherspoon is a valuable property, but, at this point, it has fallen into a state of disrepair," Gray said. "We thought it was the best use of the property, and it is good stewardship by the district, to go ahead and let the property be used by somebody for a good purpose since it is not being used as a school."

Chartre should know whether or not its application is approved within the next few weeks, Kelly said. If it is, the project can move forward from there.

Building Wealth

As Chartre looks to begin the affordable housing process in Meridian, it is nearing the end of the process in other communities around the state, Kelly said. Some of the developer's townhomes have reached the 15-year mark and are being sold to tenants.

One thing that stood out, he said, was that the townhomes provided much more than a living space. They provided equity.

"This is a real transfer of wealth," he said. "This is giving these families the ability that if they want to refinance and they want to take money out to either enlarge the home or if they want to sell it, that's real equity that belongs to them."

Having that equity available, Kelly said, provides low- and moderate-income families with a wealth of resources that they otherwise would not have and opens the door to more possibilities.

"It's their money," he said. "It's real equity that they can access."

Glenda Sanders contributed to this report

Contact Thomas Howard on Twitter @tmhoward