People sometimes ask us, “Why not take this money and spend it to purchase already-existing apartments and other properties and turn them into PSH developments? This would certainly be cheaper, and we could house more people faster this way. Why don’t we abandon Minvilla and do PSH somewhere else?”
These are fair questions. Minvilla is expensive compared to new construction for a comparable use. Its expense is mostly due to several years of neglect by previous owners, neglect which led to its deteriorated condition; the unique challenges posed by the changes the structure will undergo as it’s adapted for its new use; and certain requirements related to the historic character of the building. Those additional costs are more than absorbed by the considerable equity made possible only by historic designation, but even so, some people ask, “Why not take the money going towards Minvilla and put it towards more, cheaper, readily-available units?”
Here’s why:
- The City wants to preserve Minvilla. VMC brought forward the only viable approach to doing that in approximately three years on the market. Other developers tried and failed to make their numbers work, but VMC’s project made preservation a real possibility.
- Minvilla Manor serves two purposes, not just one: historic preservation AND permanent supportive housing. The community had a strong enough desire to save this building that City Council voted to approve a significant CDBG grant for its preservation, and to the best of our knowledge, that was before VMC was in the picture. Rehabbing the building for use as PSH enabled access to more than $2,000,000 of funding that would not have been available for any use other than affordable housing.
- Most of the funds aren’t portable. Minvilla’s total project cost is right around $7,000,000. You can’t spend most of that money elsewhere. About 80% of it is tied specifically to the Minvilla Manor project, and the funding that’s most firmly attached is some of the most challenging to get in the first place. Click here for a PDF version of a table that compares dedicated versus portable funds in Minvilla’s financing.
- We DO look at lower-cost properties than Minvilla. Frankly, that’s pretty easy to do, because Minvilla is unique. Some people in the community have suggested specific properties. We’ve approached several different owners concerning several existing properties that we think might be appropriate for PSH, but we have not been able to come to terms with any of them yet. Keep in mind, too, that the simple fact that an apartment complex is super-cheap does not mean that it’s suitable for permanent supportive housing.
- We need to grow our capacity to deliver good case management. This is important. If we acquire a large number of PSH units and place residents in them before we have built a good case management infrastructure and assured its funding going forward, those residents will fail. They will not remain housed. This is why “housing more people sooner” won’t work. In PSH, housing and support are linked. You don’t have PSH without housing, and you don’t have it without case management. The case manager relationship is essential to a resident’s success in housing, and that is one reason PSH has to be developed at a pace that makes sense.
Does all this mean that Minvilla serves as a model for future PSH projects in Knoxville? No. When it’s completed, we believe Minvilla will be a great project, a symbol of our community’s commitment to ending chronic homelessness, a beautiful historic anchor property in the area in which it’s sited, and a home that will change the lives of hundreds of people who are now chronically homeless. But we intend to focus in the future on projects with less complexity and cost.