Eula Newcomb-Devasia knows what it’s like to face the uphill climb of finding a place to live.
She has stage 4 terminal colon cancer, and chemotherapy has diminished her ability to work as a house cleaner. As a result, she relies solely on Supplemental Security Income (SSI) for income, which doesn’t cover her rent. She has outlived her original diagnosis of a year-and-a-half to live.
Early in the summer, she received a five-day notice to pay past-due rent from her landlord. An email snafu prevented her application for rent assistance from being processed by the Tenant Resource Center, but she was able to find another means of assistance and was able to catch up on her rent.
“I don’t want to become homeless again,” Newcomb-Devasia, 40, said. “We were homeless about four or five years ago for eight months and that was the lowest time in my life.”
Few issues have galvanized discussions in Madison more than affordable housing and homelessness. Just last month, plans to convert a facility near East Towne Mall to a homeless shelter fell through. Homeless people are living out of tents in McPike Park, within sight of some of the city’s most expensive apartments.
Over the course of the last year, contentious neighborhood meetings in the Tenney-Lapham neighborhood addressed the presence of homeless people in the neighborhood as the Salvation Army fought for approval to build a campus that would allow it to provide more services to that population.
Others seek housing that can provide a bridge between supportive housing — projects developed for the recently homeless, which provide housing and services in buildings on Tree Lane and Rethke Avenue — and apartments billed as “affordable” by developers.
Meanwhile, many other residents who struggle to afford the rent where they’re living now are holding on by a thread, counting down to Dec. 31, when a federal moratorium on evictions is lifted. That includes Newcomb-Devasia, who shared a litany of problems she has faced trying to find a reliable home in Madison.
Bad experiences with what she called a “slumlord” in the Allied Neighborhood forced her and her husband onto the street. They stayed with a friend for a while, but that person wound up being evicted as well.
After an experience with yet another landlord she called “a piece of crap,” the couple wound up seeking services from homeless shelters downtown. Her fortunes began to turn when a friend connected them with a place on East Washington Avenue, where they live today.
“It’s been rough, but we are going with the flow now,” Newcomb-Devasia said, adding that she continues to be anxious about the possibility of losing her apartment and having to start the cycle all over again.
Homeless shelters in flux
The cycle Newcomb-Devasia has gone through is familiar to many Madison residents who lack housing security. They are living in places they can’t afford and don’t have reliable sources of income. Groceries, bills, utilities, child care eat up income. Margins are thin.
Car trouble, an injury, a positive COVID-19 test, any unexpected expense is all it takes to push people out of their current living situations and into a desperate cycle of not knowing where they will go. Options for those treading the line between homelessness and renting an apartment are few.
Earlier this month, as temperatures dropped, Madison officials announced that the city would be using the old Fleet Services Building on North First Street to shelter homeless men who have been staying at the Warner Park Recreation Center since March 30, the beginning of the COVID-19 pandemic. Warner Park had room for 150 men, who moved there after Porchlight, Inc., was forced to clear out from its previous location at Grace Episcopal Church on the Capitol Square.
The selection of the Fleet Services Building, future home of the Madison Public Market, came on the heels of the city learning in October that the owner of a property near East Towne Mall where officials hoped to create a homeless shelter backed out of the deal.
The Salvation Army is in the process of working on a project that would demolish its current shelter on the 600 block of East Washington Avenue and build a new homeless campus for families and women on the site. The proposal would have included the use of WHEDA tax credits, but the Salvation Army did not receive an award when WHEDA announced its list of recipients earlier this year. Finding a place to shelter clients during an interim period while the new facility is under construction has been a challenge.
On Nov. 17, the City Council approved designating the old Karmenta Nursing Home, 4502 Milwaukee St., as a “mission house.” The Salvation Army will use the site as a temporary family shelter while it redevelops the East Washington property.
Residents near Karmenta objected to the move, pointing to increased crime and drug activity in the area.
“I do not feel comfortable with this facility bringing more problems to the area immediately surrounding my home. It most certainly (will) affect my concern for my children and for my property value if this is to pass,” wrote one resident. “If this is to pass we will be seriously considering moving quickly. I have been a resident at this address for 19 years.”
Such is the struggle for entities like Salvation Army and the city of Madison when trying to find locations to house homeless residents. Karmenta is located on a Madison Metro bus route, near a Kwik Trip and McDonald’s, and within a quarter of a mile from Woodman’s supermarket and Metro’s east transfer point.
What is considered ‘affordable?’
Addressing the needs of the homeless while thinking about affordable housing is essential, according to Justice Castañeda. He’s the executive director of Common Wealth Development, a nonprofit organization that works to improve housing and boost economic development with a focus on racial and financial equity.
“There could be a lot of things beyond the income of why someone is homeless,” Castañeda said. “But the chasm between homelessness and someone who can afford low-income housing is huge.”
And new housing developed with the label “affordable” isn’t always very affordable. Castañeda said the question needs to be asked: Affordable for whom?
“It’s political to use affordable housing as a catch-all phrase instead of just saying someone could make $70,000 a year and still qualify,” he said. “It’s barely accessible to the bottom three percentile in the county. So the chasm between people who don’t have housing and the folks who could qualify for the low-income things is huge.”
Castañeda pointed to a recently floated idea that would reorganize the City Council and pay full-time alders an annual salary of $67,940.
“A lot of people felt like that was really high because the majority of our workforce in Madison is not making that,” Castañeda said. “But that’s the amount someone can make and still qualify for low-income housing.”
Much of affordability in development projects is measured using median household income. Often that includes adding up the incomes of adults or working persons in a household and measuring that against what the average family/household’s income is in a given area.
Affordable housing often targets those who make 30-80% of the Dane County median income, which is about $71,500. But there’s a big difference in the rent someone at 80% of county median income can afford and what someone at 30% can afford.
“If you’re working at Kwik Trip or something, you aren’t even at 50% of CMI or whatever it is,” Castañeda said. “And if you’re a single male, good luck! You’re priority Z.”
Castañeda wants to see apartment development projects reveal what income tenants will need to afford rent. Percentage of CMI isn’t informative enough, he argued.
“Otherwise they’ll make these units that are ‘affordable’ and fill them up with people who are making 60 grand a year because they qualify,” he said.
Another significant factor affecting rent: supply and demand. According to Madison Gas and Electric, the city’s apartment vacancy rate is at 4.3%, up from 3% a year ago. Matt Wachter, director of the Madison Planning, Community and Economic Development Department, has pegged 5% as a healthy rate, but others insist it’s more like 7%.
"Our vacancy rate has been so low and people who are renting apartments they can't afford is really high,” Wachter said. “So that is a very strong need in the market."
If affording rent is difficult, buying a house — a surefire path to building generational wealth — is even more of an uphill climb. Wachter said renters struggling to keep up with expenses are at a severe disadvantage when it comes to saving for a house.
“When you think about what limits someone from being able to purchase a home, it’s a handful of things,” Wachter said. “It’s down payment. They’re paying so much of their income to rent, child care, food etc., they’re not able to afford to pay their down payments. There’s closing costs and mortgages and taxes. A lot of our lower income buyers don’t have tens of thousands of dollars to do that.”
With the amount of demand for housing being what it is, the focus around Madison has often been to build huge apartment buildings with affordable housing designations rather than focus on single family home ownership.
“There’s always a sizable chunk of people in our housing market who just can’t afford the rent, the house payments,” Wachter said. “We have income inequality and for the group of people sort of left behind, if we want them to be able to afford to live in our city, that’s why we have programs.”
City seeks new solutions
Mayor Satya Rhodes-Conway’s office designated $2 million to be set aside in the 2021 budget to subsidize housing developments that do not receive tax credits through the Wisconsin Housing and Economic Development Administration.
That $2 million comes in addition to the annual $1.5 million for the Affordable Housing Fund that has existed since 2014 with the intent of improving the chances of local developments competing for WHEDA credits. But those developments are typically over 70 units, with some designated as being affordable for people making about 30% of the county median income.
Developers like the WHEDA credits because they offset some of the costs associated with building in a tight real estate market like Madison. But even after receiving those tax credits, development in the city can be costly and designating affordable units can affect a project’s profitability.
Jim O’Keefe, director of Madison’s Community Development Division, said beefing up the fund will allow smaller scale projects that don’t qualify for WHEDA credits to blossom.
“The cost to develop housing in this city is such that it’s very difficult to establish and maintain affordable rents for lower income households and still pay for the development and financing needed to build the building,” O’Keefe said.
According to O’Keefe, city officials want to encourage smaller affordable developments. As part of that goal, he said, the city could see innovative approaches like rehabilitation of small buildings, housing co-ops, nonprofit organizations putting together 10-unit developments and other nontraditional ideas.
“There was an intentional effort on our part to make Madison’s development process more competitive,” O’Keefe said. “We learned that the provision of local financial support provided a distinct advantage to developers.”
One such advantage is not having to compete against other projects from around the state for limited WHEDA credits.
Common Wealth Development’s Castañeda is rarely at a loss for words. A self-described Mexican Marine with a big heart, Castañeda returned to Madison in 2017 ago after being away for 20 years — for a military career and graduate school — and threw himself into bringing innovative housing ideas to a city in desperate need of them.
“We need to reclaim the concept of low-income housing,” Castañeda said when lamenting the overuse of the term “affordable” to describe apartment developments. “Low income includes the people who take care of your children and take care of your parents, certified nursing assistants and everyone in between.”
Common Wealth owns and operates 111 affordable units in the Williamson Street area and 35 additional affordable units in southwest Madison’s Meadowood Neighborhood. The organization specializes in taking vacant and underutilized properties and rehabilitating them for tenants with lower incomes.
Castañeda points to an 11-unit apartment building under construction at 5802 Raymond Road as an example of the work Common Wealth does. The organization received over $1 million from Dane County for the project. Ten of the units are set aside for people making 50-60% of county median income, while one unit is reserved for someone making 80% of CMI.
“A lot of our projects are like Raymond Road,” Castañeda said. “We’re not using tax credits and we’re able to get HOME funds through CDBG.”
Those acronyms refer to federal housing funds from the Department of Housing and Urban Development that are administered by local government entities. In Madison, they are distributed by the Community Development Division to nonprofit organizations like Common Wealth.
Castañeda said his vision for both Common Wealth and the city as a whole is to begin focusing on projects that serve the middle ground between home ownership and WHEDA-backed projects.
“We don’t need to think it’s either/or with single family homes versus the 90-unit things,” he said. “It’s hard for people to put together funding for the middle ground. For those light projects.”
An example: Common Wealth used $432,000 in HOME funds to acquire and rehabilitate two 4-unit buildings for the purpose of providing affordable rental housing at 433 Cantwell Court and 1526 Jenifer St. All eight units are for low-income individuals.
“For us, as a nonprofit developer, we don’t try to maximize profit, and I just say that because I think what you’ll hear from developers is they can’t do this, they can’t do that,” Castañeda said. “But really what you’re hearing is they could but then they can’t make the money they want to make. Yet you absolutely can! What we did at Cantwell and Jenifer Street is we took some dilapidated units and turned them into something with decent density.”
Castañeda said he has also embraced change in the way his organization screens tenants, an issue he points to as key to why so many people are not able to find affordable housing.
Traditionally, screening includes conducting financial background checks on people applying to live in an apartment. What turns up can include bankruptcies, judgements, liens, credit reports, sex offender status, criminal history and employment verifications. Landlords claim that information helps them determine whether prospective tenants will be able to pay their rent.
“A lot of people say the screening process mitigates risk. You know, to prevent them from not paying rent or getting evicted, etc.” Castañeda said. “But actually that’s not accurate. The prediction of behavior is not that. There’s people who are already in your housing who do that behavior. All you’re doing with your screening is just preventing people from getting into housing.”
Common Wealth has made changes to its screening criteria and Castañeda has been active in trying to get other organizations to follow suit. Overall, he said, the key to affordable housing is developers having the will to take on projects that truly serve those with low incomes.
“Jim O’Keefe’s crew, they’ve been very creative in finding ways to do this,” Castañeda said. “They have a really strong unit up there that’s thinking about all these things.”
It’s clear from talking to O’Keefe how committed his “crew” is. In addition to funding affordable housing, they have been involved in moving homeless people out of the camps that popped up in city parks over the summer and into shelters.
“We can’t add affordable housing fast enough,” O’Keefe said. “The ones we’ve added are great, but don’t begin to address the need we have.”
The wealth gap in Madison is apparent in who gets to choose which neighborhoods they want to live in and what amenities they’d like in their homes. O’Keefe wants low-income residents to have more options as well.
“I think the interest that we all share is to be able to provide the same choices to people as people with higher incomes have,” O’Keefe said. “We want lower and more moderate incomes to be able to choose and have options for lower density or own homes. We want to do everything we can to provide those options.
“It’s an ambitious goal and one that’s going to take a long time to get to, but we will do it.”