On Madison’s fast-growing Near East Side, Dane County officials are looking to entice developers to create more affordable housing with rent-free land for 99 years.
The county is seeking proposals for a mixed-income rental housing project at the vacant Messner Inc. warehouse at 1326 E. Washington Ave. A request for proposals released last week prioritizes a project that provides a mix of affordable and market-rate units, commits to long-term affordability and creates lower-cost units for families.
In return, a successful developer could enter into a no-cost, 99-year ground lease for the 1-acre property in the booming Capitol East District.
“Funding and supporting affordable housing is a good sort of upstream solution to ensure a family’s stability,” said Sup. Heidi Wegleitner, whose 2nd District includes the site. “I’m certainly open to seeing what we need to do to support a successful project.”
Once slated to become Dane County’s day resource center for the homeless, the Messner property has remained unused since the county purchased the property in 2015 for $1.42 million.
The resource center has since found a home closer to the state Capitol in the former Greater Madison Chamber of Commerce building at 615 E. Washington Ave.
It is projected to open Oct. 1.
As part of the proposals request, projects must include units for people earning 30 percent and 50 percent of the county median income, while also providing market-rate spaces and units with three or more bedrooms to accommodate families.
Some elements — such as the ratio of market-rate to affordable units and lower-cost units staying affordable for more than 30 years — aren’t required but greatly contribute to the evaluation of projects.
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Wegleitner said ensuring long-term affordability is particularly important when there is a public investment in a project.
“The longer we can ensure these units are affordable, the better we’re really meeting our objectives,” she said. “Preservation is super important, but we really need to be creating new affordable housing; otherwise, the gap is going to get wider.”
Proposals are due to the county by Sept. 8, with the County Board to select a project in the following months.
While the original goal was to have a developer apply for federal tax credits this year, the November application deadline for the credits was “too tight,” Wegleitner said.
Instead, the RFP anticipates the project will align with local, state and federal financing schedules in 2018.
The property, which includes another vacant commercial building at 1318 E. Washington Ave. and an occupied three-unit house at 1314 E. Washington Ave., would need several city of Madison land use approvals after a developer is selected.
While the area has seen large market-rate apartments rise in recent years, a Stone House Development project currently under construction on the 1000 block of East Washington Avenue will provide 55 units of affordable housing.
Wegleitner said members of the Tenney-Lapham neighborhood, “like their counterparts on the south side of East Washington Ave. … really want to have an inclusive neighborhood and are pressing developers for more affordability in the projects they see coming through.”