Opportunity Zone Apartments Aim for Affordability Downtown. Will They Be?

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Thomas Hawk, Flickr

Birmingham’s downtown housing market has boomed in recent years. Pricey lofts and luxury condos have mushroomed throughout the city center. But skyrocketing rents and leases mean many low-to-moderate income workers, such as in the restaurant and hotel industry can’t afford to live there.

Kennard Craig, a 25-year-old grad student at UAB, says he’d like to live downtown, but the prices are too high.

“I try to go on web sites like Zillow or apartments.com, but it’s always like thousands of dollars just to live close downtown,” he says.

In today’s bustling downtown real estate landscape monthly rent hovers around $1,600 for a one-bedroom. Two-and-three bedroom apartments could rent for twice that amount.

It’s a sign of Birmingham’s downtown transformation in recent years. The once-decaying buildings and deserted sidewalks now are filled with popular restaurants, pubs and rooftop bars. Those who want to be there are willing to pay a premium.

But Craig says he, like many others his age, doesn’t have a lot of money to spend on housing.

“I know I have a nice amount of student loans I’ve got to pay off, so it’s just kind of hard to add on with the mortgage and all that kind of stuff.”

A new development on Fourth Avenue North may provide options for people like Craig.

The old American Life Building is Birmingham’s first Opportunity Zone project – a government-backed program designed to revitalize urban neighborhoods. It gives generous tax cuts to developers who invest in low income areas.

Developer Patrick Harwell says the apartments in the 12-story building will help fill a void in the city’s housing market.

He says there’s a demand from people who have modest incomes and want to live close to downtown or UAB – like medical technicians and restaurant employees.

“Or, it’s somebody who’s just starting off in their career – who is  just graduating and making 30,00 to $50,000 a year. This appeals to them,” Harwell says.

A handful of units will be reserved for clients of the Dannon Project. Those are people who have completed job training after being unemployed or incarcerated.

But some question whether the Opportunity Zone Project will help Birmingham residents with the greatest housing needs.

William Barnes of the Birmingham Urban League says about 30 percent of current city residents live in poverty. The lower rents in the new building will be affordable to some but not all, he says.

“You can’t occupy decent, affordable, clean housing, if you don’t have decent income – and you’re talking about more than a $7.25 an hour job,” he says.

People who complete programs through the Urban League often can get higher paying jobs and get better housing.

Harwell, the developer says about 95 percent of the high-end apartments around downtown and Southside are occupied. Fueled by demand, he says his company plans to announce a similar downtown Opportunity Zone development soon.

Photo by Thomas Hawk

 

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