Generation Housing plans mixed-income resi

The rental market is soaring in Denton, and developers are noticing.

Dallas-based Generation Housing Development plans to build the Westview Heights at Denton apartments on an undeveloped 6-acre lot at 6405 North Interstate 35, according to a filing with the Texas Department of Licensing and Regulation. The multifamily complex will include three buildings with 132 units and a $33 million price tag, which is about $250,000 per unit.

Listing records show the 6-acre plot the development will be built on was sold last year after it was listed for $500,000.

Construction is slated to start this summer and last until Fall 2024. The complex will span 166,000 square feet and include a clubhouse and a pool, according to the filing. Not many construction details have been released on the project, but City of Denton records show the developers submitted and received a Low Income Housing Tax Credit for the development, which will have around 90 affordable apartments, which is about 60 percent of the units. The affordable units will go for 30 percent, 50 percent or 60 percent of the market rate, depending on income qualifications.

Low Income Housing Tax Credits have been the largest driver of affordable housing for decades by offsetting a portion of private developers’ federal tax liability, which allows them to charge lower rents. The state makes the final determination on which projects receive the credit.

Generation Housing Development was founded in 2002 and focuses on Class-A multifamily assets across DFW and the southwest region. The firm has developed over 4,000 units with a $385 million value, according to its website. This looks to be its first foray into Denton.

Denton was the hottest submarket in Dallas over the past three months, according to a recent report by ApartmentData.com. The report showed Denton as the market with the best combination of rental rate growth and market absorption based on 37 DFW markets. The city has had a 2.3 percent annualized rental rate growth with 0.8 percent market absorption.

The city of Denton has adopted a number of strategic initiatives to prioritize affordable housing in light of the squeeze. The city forecasts a need for 4,300 moderately priced housing units by 2030. Because demand is so high currently in Denton, private developers are building higher-priced units for high returns, according to the city’s housing strategy guide.

“To create lower priced units, the market will require some degree of public and nonprofit support through the use of incentives, grants and technical assistance,” the city’s guide states.

Multifamily projects are still popular in-and-around the rest of DFW even as growth has slowed compared to pandemic numbers. Dallas-Fort Worth topped the most preferred markets for multifamily investment, according to CBRE’s 2023 U.S. Investor Intentions Survey. More than 65,000 multifamily units are in the construction pipeline across Dallas-Fort Worth, the highest such figure in the country.