How a DC developer is making affordable housing work in St. Pete
By Breanne Williams
Tampa Bay Business Journal
Published: Dec 6, 2023

A multifamily community consisting entirely of workforce and affordable housing units is coming to South St. Petersburg.

Gravel Road Partners, based in Washington, D.C., is building Bayou Court Apartments at 4201 Sixth St. S., near the southern tip of Lake Maggiore. The project will consist of 60 two-bedroom units — each approximately 1,050 square feet — in three-story buildings. St. Pete City Council approved allocating roughly $2.74 million in funds to the project on Nov. 30.

“We started to really understand the dynamics of the housing problem as it’s locally iterated in St. Pete,” Michael Burke, founding partner of Gravel Road Partners, told the Tampa Bay Business Journal. “We recognized how big this problem is and how bad it’s been. When you look at rental rate growth against income growth, that gap just keeps widening. Especially with as hot as St. Pete and Tampa got, with traditional investors coming in and doing value-add deals. It keeps displacing more people.”

In total, 12 units will be for households making at or below 50% of the area median income. Nine units will be for those making at or below 80% AMI; 15 units will be for those making 100% AMI or below, and 24 units will be for those making at or below 120% AMI. Currently, that breaks down to those making $39,150 annually to $93,960 annually for a household of three.

All of the units have two bedrooms. Burke said that is a step to help meet the need for affordable and workforce housing for small families. The second bedroom reaches “a broad stretch of renters,” including those who work from home, small families or younger tenants with roommates.

Unlike many affordable housing projects, Bayou Court is not utilizing federal funds but instead is sticking to local support. This will allow the group to quickly break ground in the first quarter of 2024 and complete the project in the first quarter of 2025.

The project uses the city’s workforce housing density bonus and Florida’s Graywater Density Bonus Program, meaning a “significant portion” of the units’ graywater will be “captured, filtered and reused on site.”

The project is estimated to cost just over $17.27 million. The cost per unit breaks down to $287,959. The group has already secured a commercial bank construction loan for $8.6 million and support from St. Pete in the amount of $2.74 million, along with just over $2.936 million in developer and investor equity. The group hopes to secure just under $3 million from Pinellas County in January.

Burke previously worked in local government and said the best advice he can offer for developers is not to view local governments as an obstacle. He said they’re often viewed as red tape and a hindrance, but when you take the mindset of government being a partner, there’s room to “deliver a solution” that works for both parties.

The development team also includes Place Architecture, Park & Eleazer Construction, Osborn Civil Engineering, WGI Structural Engineering and Carteret Property Management, according to city documents.

Gravel Road Partners is “looking to grow” in the region and is currently in “negotiation for several deals,” according to Burke. The company has both a development and a preservation business, and while he said it is a “very hard time to do deals,” the housing crisis is deep enough that he said there are ample opportunities to continue to make investments in the community.