County slated to award APAH nearly $1M for renovations to affordable housing complexes

Two affordable housing complexes in Arlington are teed up for renovations, including units on a site also set for redevelopment.

Arlington Partnership for Affordable Housing will upgrade 62 units at the Marbella Apartments (1301 N. Queen Street) and 101 units at the Arna Valley View Apartments (2300 25th Street S.), says Elise Panko, APAH’s Resource Development and Communications Manager. The properties consist of a group of garden-style apartment buildings north near Rosslyn and mid-rise buildings between Pentagon City and Shirlington.

The affordable housing developer is asking the county for a new $995,000 Affordable Housing Investment Fund (AHIF) loan for this project, which the Arlington County Board is slated to review this Saturday. Existing financing for these developments, to the tune of $10.45 million, will roll over for these projects.

This work is in addition to a redevelopment project at the Marbella site, where some buildings will be torn down to build two 12-story apartment towers with all units set aside for people earning less than the area median income. In February, the Board awarded APAH $21.4 million for the project and approved the redevelopment.

The remaining buildings, built in the 1940s and not renovated in at least 15 years, are in need of an upgrade, Panko said. Renovations here will target buildings to the north of the redevelopment area and across N. Queen Street from it.

Likewise, Arna Valley View has not been renovated since its construction 21 years ago and had developed some maintenance issues.

The brick façades of the Marbella buildings will get new mortar while the Arna Valley buildings will get new siding and garage and walkway repairs. Units in both complexes will get updated finishes, fixtures and appliances, new kitchen cabinets, heating and cooling systems, roofs and windows. Renovations will improve energy efficiency by about 30%, Panko says.

“It is important for APAH to reinvest in its existing assets to ensure that the quality of housing we provide remains at a high standard,” she added.

Panko says APAH has been working with residents on a relocation plan that was approved by the Arlington Tenant-Landlord Commission.

“Residents will be moved off site for approximately six to eight weeks while their units are renovated, and will then return to their same unit,” Panko said. “We do not anticipate any displacement of existing residents because of the renovation.”

Per the February report on the redevelopment project, these renovations were set to occur starting mid-2022. APAH spokesman Garrett Jackson says the delays were due to the additional time needed to secure financing sources as well as getting building permits in hand.

APAH had tried to avoid asking the Board for financing for the renovations, according to the report. But then the economy took a turn.

“Construction costs and interest rates have been very volatile in 2022 (interest rates just in the last few months, but construction costs have been rising since early 2022) — it was the result of both of those things that caused us to need additional funding from the County,” APAH spokesman Garrett Jackson said. “During the Marbella site plan approval, those cost increases had not yet hit the market and we believed that we could accomplish the renovation with no additional AHIF (that had long been our goal).”

So it secured a $700,000 Virginia Housing Trust Fund loan and $2 million in state loans that specifically target energy efficiency upgrades to lower the ask to the board. APAH is also chipping in $11.7 million, and has secured $22.8 million in 4% low-income housing tax credits, and $2.5 million from deferring a developer fee associated with affordable housing development.

“We squeezed contingency and other sources as much as possible throughout 2022… but ultimately between costs and interest rates, we had to go back to the County and request an increase in AHIF funding,” he said.

APAH will also combine the two apartment complexes into a single ownership entity, which will generate more tax credits and reduce the amount of county financing needed, Panko noted.