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Stalled affordable teacher housing project finds new life in Northwest Arkansas

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Stalled affordable teacher housing project finds new life in Northwest Arkansas

May 21, 2024 | 7:09 pm ET
By Antoinette Grajeda
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Stalled affordable teacher housing project finds new life in Northwest Arkansas
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Bentonville School District Superintendent Debbie Jones and Excellerate Foundation President and CEO Jeff Webster share details of the McAuley Place affordable housing development during a groundbreaking ceremony on May 21, 2024 in Bentonville. (Antoinette Grajeda/Arkansas Advocate)

Northwest Arkansas community members broke ground Tuesday on a multifamily rental development that provides a new path forward for the Bentonville School District’s affordable housing project, which stalled following a rejected rezoning request in February. 

The Excellerate Foundation, a grant-making organization that’s worked on regional housing issues, proposed constructing employee housing adjacent to Bentonville High School last summer. After the project received pushback earlier this year, Excellerate incorporated the plan into another development that was already in the works called McAuley Place.

Organizations like the Excellerate Foundation have explored affordable workforce housing solutions in recent years as Northwest Arkansas’ rapid growth has led to skyrocketing home prices, causing recruitment and retention challenges for employers.

Northwest Arkansas project aims to provide affordable housing for area’s workers

Instead of having to delay the project, Excellerate President and CEO Jeff Webster said this modified plan speeds things up.

“We need action, we need it now,” he said. “This pulls us forward a year, so we’re excited by that part … it’s more central, it’s bigger and it’s faster.”

McAuley Place is a partnership among several entities, including the Excellerate Foundation, Strategic Realty (which is owned by state Sen. Jim Petty, R-Van Buren), Benton County government, Arvest Bank and Mercy Health Northwest Arkansas. 

Mercy, which operates a clinic adjacent to McAuley Place, sold the nearly 11-acre property to the Excellerate Foundation for about $1.3 million, which was below market value, Webster said. The foundation donated the land to the project, which is named for Catherine McAuley, founder of the Sisters of Mercy to whom Mercy traces its roots.

The $35 million multifamily rental development is supported with about $17 million from state and federal funds, $10 million from philanthropy and $8 million from permanent financing, Webster said. 

McAuley Place is part of the Low Income Housing Tax Credit program, a nearly 40-year-old federal program that provides funding that allows for rent rates that must remain low over time and sets income limits for who can live in the units, Webster said. 

Located at the corner of SW I Street and SW 41st Street, McAuley Place will provide 120 multifamily rental units of varying sizes and 40 single-family cottages to eligible community members. 

The estimated monthly rent will be about $750 for a two-bedroom multifamily unit and $1,000 for a cottage. High school students in the Bentonville Schools IGNITE Construction Management program will assist with the design and construction of the single-family cottages. 

Bentonville School District Superintendent Debbie Jones and Excellerate Foundation President and CEO Jeff Webster
Bentonville School District Superintendent Debbie Jones and Excellerate Foundation President and CEO Jeff Webster (second and third from left) pose for a photo with other local officials at McAuley Place groundbreaking celebration on May 21, 2024 in Bentonville. (Antoinette Grajeda/Arkansas Advocate)

Thirty-five cottages will be allocated to Bentonville School District employees and five will be available for Mercy employees. District employees can also choose to participate in the Home Ownership Mutual Equity Solutions (HOMES) program that will help residents build equity they can use as a down payment on a home.

Webster said the program provides home ownership benefits while removing some of the financial challenges such as mortgage insurance, taxes and closing costs. When tenants leave after a maximum of five years, they will have approximately $50,000 that can be used toward the purchase of a permanent home. 

McAuley Place will also have a 3,000-square-foot early learning center where the school district will lead programming for 60 infants and toddlers. The center will also offer adult educational classes, covering topics like tutoring, financial management and home-ownership preparation.

Additionally, the Excellerate Foundation has created the Teacher Homes Fund, through which the public can make donations of up to $100 to support McAuley Place. The Excellerate Foundation will provide a 1:1 match.

Bentonville Superintendent Debbie Jones said affordable housing for district employees has been a challenge since 2021. After Tuesday’s groundbreaking ceremony, Jones said she was pleased to see the community come together to address the issue. 

“We have been building towards today for several years and so that’s why it’s such a celebration,” she said. “It’s really a solution to a problem that our community saw.”

The development’s first phase is scheduled to be completed by the end of 2025, and the entire project will be finished by the end of 2026. 

Teacher housing projects

The district’s original plan for providing affordable employee housing involved the donation of approximately nine acres adjacent to Bentonville High School to the Excellerate Foundation with the intention of building 100 multifamily and single-family rental homes. Although the land donation was completed, the $25 million project stalled after facing opposition this year. 

First, lawmakers at a January legislative meeting criticized the decision to donate district property purchased with taxpayer dollars instead of selling it. Some legislators also argued that providing housing is outside the district’s purview.

Arkansas school districts offer affordable teacher housing as recruitment tool

Although Arkansas’ attorney general approved the legality of the land donation for construction of affordable housing in a September opinion, the Bentonville city council rejected a rezoning request in February, which halted progress on the project. 

The district pursued the project because officials said they were losing teachers who couldn’t afford to live in the region. In April, the median sale price of a home in the city was $464,672, according to Realtor.com.

During the 2023-2024 school year, Bentonville had the third highest starting salary for teachers in the state at $51,924. The LEARNS Act of 2023 raised Arkansas’ minimum teacher salary from $36,000 to $50,000. 

The Bentonville School Board in April approved increasing the district’s minimum teacher salary to $54,416, for the 2024-2025 school year. 

Although officials are moving forward with McAuley Place, Webster said they’re not giving up on constructing on the land adjacent to the high school and are considering next steps. 

Meanwhile, the Lee County School District is nearing completion on its affordable teacher housing project in Marianna. The east Arkansas district broke ground on a four-duplex project in February. The district superintendent told the Advocate earlier this month that construction will be complete in July.