Rather than closing its doors forever after 113 years of service in the city of Santa Barbara, Grace Lutheran Church in embarking on a new chapter.

Grace Village Apartments, 57 one-bedroom affordable units for seniors at 3869 State St., is set to begin construction.

Representatives celebrated a groundbreaking ceremony on Thursday.

After decades of declining membership, the congregation held its last service in 2015, and members donated the A-frame church and land to Santa Barbara’s Housing Authority.

“It has been a socially active church and a church that always had a significance in social ministry,” said Santa Barbara native Pat Wheatley, the former president of Grace Lutheran Church council. “The church was making decisions about how it was going to maintain its legacy to the community.”

During discussions, the No. 1 priority was to establish low-income senior housing, Wheatley said.

“That resonated with everyone in the church community,” Wheatley said. “It was a purposeful process. This is a church that I have admiration for — it was about how do we best serve the community with the gift God gave us, and how do we use that land to maintain the legacy of service.”

Project development is a joint partnership between Santa Barbara’s Housing Authority — an entity dedicated to providing affordable housing to eligible persons with limited incomes — and Front Porch Development Company.

Grace Village Apartments, L.P. is the property owner, and CARING Housing Ministries, an affiliate of California Lutheran Homes, will serve as property manager.

Funding for the project includes federal tax credits through the California Tax Credit Allocation Committee program, with MUFG Union Bank, N.A., as the construction lender and equity investor, California Community Reinvestment Corp. as the permanent lender, and residual receipt loans from the city of Santa Barbara and the Housing Authority.

Residences will be available to seniors who meet 40 percent of the area’s median income for a one-person household — about $23,600 per year, said Rob Fredericks, Housing Authority executive director.

Residents 62 and older will be eligible to rent.

Grace Village will feature an on-site resident manager, a community room, an administrative office, a maintenance area, and a laundry room on each floor, as well as two elevators serving all of the floors with interior corridors and handicapped-accessible entries.

Individuals who are not dependent on a vehicle are also welcomed, said Skip Szymanski, Housing Authority deputy executive director.

“We are expecting they will be dependent on alternate transportation,” Szymanski said.

The $24 million project near La Cumbre Plaza, is scheduled to be completed by the end of 2017.

“If all goes well, there will be a new homes for seniors by Christmas time in December,” Fredericks said.

The project is also adjacent to The Marc, a development that features 89 modern, luxury apartments. One-bedroom apartments at market rate in Santa Barbara could cost $1,900, Fredericks said. The average cost of an apartment at Grace Village is set at about $711 per month.

“There’s a huge difference, and that’s going to keep people living appropriately and housed in our community,” Fredericks said. Nearly 290,000 senior households in California pay more than half their income on rent, which is up 40 percent from 2005, according to the U.S. Census Bureau.

Places such as Grace Village are needed as millions of people 65 and older live on the brink of homelessness, Fredericks said. He noted a study on senior housing needs done by the Joint Center for Housing Studies of Harvard University. Low incomes, high housing costs and limited availability of subsidized units are significant causes of homelessness among older adult, according to the study.

The issue at hand — a lack of decent, affordable housing for seniors — is reaching catastrophic proportions, Fredericks said.

Fredericks said the Santa Barbara’s Housing Authority’s Section 8 waiting list includes 1,070 local seniors in need of affordable housing.  Seventy-three percent of those seniors are “extremely low income,” meaning their household income is at or below $17,700 a year or $1,475 per month, according to Fredericks.

Both Fredericks and Szymanski stressed the church’s decision to gift the land.

“This project would not happen without Grace Lutheran’s congregation and their decision to leave a legacy to do something lasting for the community,” he said. “It’s going to be exciting.”

— Noozhawk staff writer Brooke Holland can be reached at bholland@noozhawk.com . Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.