JACKSON, Wyo. — The affordable housing project at 90 Virginian Lane could face a potential $31.5 million funding gap, representatives from Pennrose Development explained to Town and County elected officials during the April 17 Town hosted joint information meeting. Electeds will pick up the conversation at a joint meeting on Thursday, May 8.
Pennrose Regional Vice President, Shannon Cox Baker, presented the year-one update to the joint committee, sharing that the estimated shortfall was identified following the market study, combined with an estimated 15% increase to construction costs due to volatility in the market from U.S. imposed tariffs. About $17 million of the gap is attributed to construction costs and the other $14 million is due to lowering the rent/sale ceiling on units within the 120-160% area median income (AMI) to align with market demands.
The study looked at 960 units across 12 properties within 2 miles of the project site and found that there was limited data for three bedroom units, with 67% of households being one or two person households. Limited data was also found for the income band of households earning 120-160% AMI, highlighting the need to create affordable housing for this income group. The study found that in Jackson, this group is primarily medical professionals and small business owners, earning $158,480 to $181,120 for one person and two person households, respectively.
Vacancy rates were as expected in a community defined by a housing crisis: 0.8% vacancy, or functionally 0.
Baker said the market study “affirmed a lot of what formed the basis of the RFP [request for proposals] initially; there is a tremendous amount of need for housing.” But, she said, “the willingness to pay is below what was anticipated.”
“We should lower our achievable rents, and our sale prices, just for the units within the 120-160% AMI band that are workforce units,” Cox Baker said. “Given that the majority of our units are within the 120-160% AMI band, that has a pretty outsized impact on our financing, reducing the revenue, and reducing our ability to leverage debt.”
The study also illuminated that potential tenants might opt to commute rather than pay a premium to live in town, bringing Pennrose to the conclusion that rental rates should be set at 110% AMI, for people earning 120-160% AMI, leading to an estimated 40% decrease in revenue because the project is heavily weighted with those types of units.
Town Councilor Devon Viehman asked Joint Housing Director April Norton if lowering rental rates at 90 Virginian could create competition with other projects going on.
“No, we see demand, and high demand across all income bands,” Norton said. “We do not have a product right now for most of the families within the 110% AMI range, and Area 1 of Northern South Park is a 20 to 25-year build out. A lot of workforce units are coming online, like Parkside, but it’s ownership for 60-80% AMI.”
“Northern South Park is sort of the steady drumbeat of [housing] supply that will come online over the course of the next couple decades,” Norton added.
“These are big decisions, the purpose of today’s meeting is to provide you with information, as we are so frequently asked for, to hear your questions, ideas, and concerns and take those back with us,” Norton said. “We plan to come back to you the first week of May to ask for some decisions.”
Local nonprofit advocacy group ShelterJH has supported the project from the start, advocating for the passing of the 2022 Community Housing SPET initiative, which set aside $20 million for housing, a portion of which was used to purchase the property, and the once-proposed 226 unit density.
In a comment shared with Buckrail via email, following the April 17 meeting, ShelterJH Board Member Daniel Ragsdale said, “Higher development costs are a real challenge, but I am confident we can meet that challenge through some combination of lowering costs, increasing revenue, and increasing public investment.”
“ShelterJH’s goal is to push for the combination of those tools that is best for our community,” Ragsdale said.
Surface Parking vs Structured Parking
“The difference in a structured parking space compared to surface parking space is quite significant,” said Andy Rockmore, Principal at SAR+ Architects, the firm working with Pennrose on the site design. “It’s $45,000 per structured parking space; it’s $8,000 per surface parking space, that’s a roughly $10 million parking garage.”
Rockmore talked about the convenience and livability a dispersed model has for residents, allowing people to park closer to their homes, making unloading and loading their cars easier. The surface parking would also allow for an increase in units from 211 with a parking garage, to 226 without, creating more revenue for the project and more homes for community members while maintaining all 230 parking spaces.
“Removing the structured parking could save at least $10 million, it could be more,” Cox Baker said. “But doing structured parking is not without consequence, especially when you are developing on a site with a somewhat high water table.”
Pennrose Senior Vice President of Development Tom Anderson further highlighted that point, noting that the least amount of impact on groundwater is a surface parking scheme.
“We do of course have surface water to manage, but we wouldn’t be impacted to the extent that we would if we were to start underground,” Anderson said.
Cox Baker also noted that a parking garage could ruin views for tenants and if the garage was designed to top-off below the second story, she has “no idea what that additional cost will carry.” Doing away with the parking garage could open up the opportunity to build only what’s needed to get the first building open to tenants, Cox Baker said, utilizing where the parking garage would have been to stage building materials.
Taking out the parking garage, the shortfall might be reduced to about $20 million, which Pennrose said could be closed by design tradeoffs, opening up rights of first purchase/rental, and exploring ways to bring down operating expenses through property tax abatement/exemption and other “financial engineering” like phasing the construction, and avoided talking directly about further subsidy from the Town and County at this stage.
“The idea of rights of first rental and first purchase is a way to raise money for these projects,” Norton said. “These [rights of first purchase/rental] are good solutions for organizations or businesses that don’t want to be in the business of being the landlord for their employees.”
Mayor Arne Jorgensen, who has a background in architecture, said he was not concerned about the shortfall at this stage. He also said their decision to put off the land commitment has been a great way to manage risk, a nod to the joint boards’ decision in December 2024 to execute a ground lease option agreement, allowing the Housing Authority to retain control over the property until Pennrose meets the outlined criteria.
“This is the least amount of subsidy we have put into a project in years,” Jorgensen said. “Right now this is the best value we have gotten back for our dollars. In other words, there is room to push on that.”
Town Councilor Kevin Regan and Commissioner Wes Gardner agreed that they are not too concerned about the reduction of greenspace, considering the tradeoffs it would create, including mitigating potential impacts on groundwater, the improved views and flexibility for the future. Gardner noted the parking garage was never a part of the RFP.
“Seventy-five percent of Town Square is still significant and this is a community with a lot of open green space, and the goal of this project is housing, there are people that need housing,” Regan said.
Pennrose said they are on track to break ground in 2026, and open the doors to tenants in 2028. In the meantime, the Housing Authority has issued a lease to the Virginian RV Park to operate for another summer. The next joint information meeting to discuss the project is scheduled for May 8.
