In 2014, Madison kick-started a strategy to battle homelessness by trying to build 1,000 units of affordable housing in five years. To that end, the city established the $25 million Affordable Housing Fund to encourage developers to build affordable units in amenity-rich areas with easy access to public transportation.
So far, officials say the plan is working.
“I think by almost any measure, it’s been successful,” said Jim O’Keefe, the city's community development director.
The city gives hundreds of thousands or millions of dollars to developers and encourages them to apply for federal Low Income Housing Tax Credits, distributed through the Wisconsin Housing Economic and Development Authority (WHEDA). Of the 13 city-backed affordable housing projects, 10 have received WHEDA credits.
These 10 represent a total of $120 million in development, with the city contributing just under $11 million, and federal tax credits chipping in more than $70 million, O'Keefe said. In total, those 10 projects will add 650 rental units of housing, 570 of those are affordable. Of the 570, 105 are for formerly homeless individuals. Affordable units set rents at 30, 50 and 60 percent of area median income.
Before 2014, the city didn't make a concerted effort to take advantage of WHEDA tax credits, O’Keefe said, and there were “very few, if any” WHEDA applications for Madison projects. Over the last few years, Madison has turned into one of the “more aggressive or active city governments” in the program.
“I think everybody understood going in that 1,000 units wouldn't solve the affordable housing shortage,” he said. “Should we meet that five-year target, there will continue to be a need for affordable housing.”
But the five-year mark “presents a good opportunity for us to take a step back and think about where we want to go from here,” he said.
Among the challenges to address: developers have been telling the city that it’s increasingly difficult to find well-situated and affordable properties in Madison, places close to public transportation and amenities like grocery stores. O’Keefe noted the city will also have to evaluate how recent changes to tax law may affect funding for affordable housing.
Here’s an update on the affordable housing projects in Madison:
Rethke Terrace Apartments by Heartland Housing at 715 Rethke Ave.: The project created 60 units of affordable housing for formerly homeless individuals, with 25 units slated for veterans. There are medical, mental health and substance abuse supportive services on the premises. The city provided almost $1.5 million to the $8 million project.
Maple Grove Commons by Oakbrook Corporation at 3204 Golden Copper Ln.: The city provided $1 million to the project, which built 80 units, 68 of which are affordable.
Carbon at Union Corners by Gorman & Company at 2504 Winnebago St.: The apartment building holds 90 units, with 76 of those as affordable apartments. The city contributed $1 million to the $17 million project.
Tennyson Ridge by WHDC & Lutheran Social Services at 3834 Whitman Ln.: The development provides 72 units, 62 of which are affordable. The city committed $1 million to the $10 million project.
Pinney Lane Apartments by Stone House Development & Moving Out at 902-914 Royster Oaks Dr.: The project created 70 units of housing, 59 of those are affordable. The city committed $660,000 to the $12.5 project, although this project was funded before the creation of the Affordable Housing Fund.
Mifflin Street Apartments by Stone House Development on the 1000 block of East Washington Avenue: The site was previously occupied by Madison Dairy Produce and Strauss Printing and is adjacent to Breese Stevens Field. It features 65,000 square feet of office and retail space. The complex includes a four-story building with 65 units, 55 of which are affordable units. The city has committed $1 million to the $12 million project.
Timeline: Construction is expected to be completed in mid-Janurary of 2018.
8Twenty Park by JTKlein & DCHA at 820 S. Park St.: A proposed building with 67 apartments, 58 of which are affordable. The city committed $1,250,000 to the $15 million project. A second phase of the project will add 28 more units, 24 of which will be affordable. That phase did not receive city funding.
Timeline: Construction is expected to be completed around May of 2018.
Madison on Broadway by Mirus Partners & Movin’ Out at 2230 W. Broadway: This project would build a 48-unit building with 40 units for low-income individuals, plus 3,000 feet of commercial space. Twenty percent of the units for the project will be marketed for individuals or families with a member who is a veteran or who has a permanent disability. The city committed $580,000 to the $11 million project.
Backstory: The development plan originally called for a 14,000-square-foot neighborhood community center at 1917 Lake Point Drive, but city funding fell through.
Timeline: Under construction, expected to be completed in July 2018.
Tree Lane Family Apartments by Heartland Housing at 7933 Tree Ln.: The city committed $1.6 million to the $11.6 million project that will provide 45 units of permanent supportive housing.
Timeline: The project is under construction and expected to be completed in June of 2018.
WAITING FOR FEDERAL FUNDING:
The Grove Apartments by MSP Real Estate, Inc. at 204 Cottage Grove Rd.: The proposal would create 112 units of housing and 95 of those would be affordable. The City has committed up to $3 million to the approximately $20 million project.
Backstory: The complex slated for the current location of the Pinney Library met with a mixed reaction from neighbors in November. While some see the merits of the project, there are concerns about its size, as well as questions about the intended population of low-income tenants.
Timeline: Construction is slated to begin in early 2019, with a likely opening in spring 2020.
Normandy Square by MSP Real Estate, Inc. at 6509 Normandy Ln.: It would create 58 units of housing for seniors, and 48 of those would be affordable. The city committed $850,000 to the project last year and it received $5.6 million in tax credits. The project is asking for additional tax credits for the $11 million project.
Timeline: Construction is slated to begin in early spring or late summer of 2018, and end in early spring or late summer of the following year.
Park Street Apartments by Heartland Housing at 1202 S. Park Street: A permanent supportive housing project, the proposal would build 58 units for homeless single adults. The project is estimated to cost $11.6 million dollars and the city has committed $1.9 million from the Affordable Housing Fund.
Backstory: The project for the homeless was put on hold after the developer failed to receive needed federal tax credits last year. In August, the city stepped forward to help the developer by purchasing the property on South Park Street.
Timeline: Construction dates are dependent on whether the project receives WHEDA funding.
Tree Lane Senior Housing by CommonBond Communities at 7941 Tree Ln.: The proposal would create about 54 units of senior housing and 51 of those units would be affordable. The City has committed up to $1.48 million to the project from the Affordable Housing Fund to the $11 million project.
Timeline: Constructed in slated to begin in spring of 2018, with a tentative opening date in early 2019.
Fair Oaks Apartments by Stone House Development at 134 S. Fair Oaks Ave.: The development would build create 80 total units and 68 of those would be affordable. The estimated cost of the project is approximately $17 million and the city has committed up to $1.35 million to the project.
Backstory: The Fair Oaks project has faced criticism for its location next to Madison-Kipp, with concerns about air quality and ground contamination, although a city report found the site presented no human health hazards. The report did note the following: “We do expect that prospective residents of this new development will be informed about the general odor, noise and traffic issues they will experience on a regular basis.”
Timeline: If the project receives credits, construction could begin as early as August 2018 and be completed by August 2019.
GrandFamily Housing by Gorman & Company, at 2507 Winnebago St.: The city has committed $950,000 to the approximately $13 million project that will build 59 units, 56 of which will be affordable. This project is also returning to WHEDA for more funding.
Timeline: Construction is slated to begin in the summer of 2018 and end by fall of 2019.