Seeking new momentum on affordable housing, Madison may deliver $3 million to a big new project and recommit millions to others that failed to secure critical federal tax credits earlier this year.
The roughly $7.8 million in investments, which would help create 109 affordable units in the new project and recommit to an additional 177 low-cost units in the others, continue a city initiative aimed at creating 1,000 affordable units, including 250 for the homeless, over five years.
City investments are expected to strengthen developers’ proposals to the Wisconsin Housing and Economic Development Authority, which allocates federal low-income tax credits in a process that begins in December with decisions early next year.
The city investments also reflect rising project costs and declining value of federal tax credits amid momentum to lower federal corporate tax rates under the Trump administration, officials said.
“We feel good about the projects we’re putting forward,” said Jim O’Keefe, city community development director. “If there’s any concern, as the tax credits begin to lose value, and they are, there may be fewer projects awarded credits.”
In a resolution introduced Tuesday, the City Council is considering:
- Up to $3 million to MSP Real Estate for The Grove Apartments, 204 Cottage Grove Road, a $23 million, 129-unit project with 109 apartments available to those making less than 60 percent of Dane County’s median income, or $46,020 for a family of three.
- Up to $1.35 million to Stone House Development for the Fair Oaks Apartments, 135 S. Fair Oaks Ave. for a $17 million, 80-unit project with 68 apartments for those making less than 60 percent of county median income.
Stone House secured city Affordable Housing Fund support for 2017, but didn’t get WHEDA tax credits and has been again selected in a competitive process for city financial support in 2018.
Meanwhile, the council is considering resolutions to recommit to two other projects that got city support for 2017 but also failed to secure WHEDA federal tax credits in the last round of allocations.
In those cases, the council is also being asked to boost city funding to address rising project costs and the declining value of federal tax credits, as well as to improve the projects’ competitiveness in the next WHEDA funding cycle.
In those resolutions, the council is considering:
- An additional $230,000 for a total $1.48 million to CommonBond Communities for the Tree Lane Senior Apartments, 7941 Tree Lane, an $11.2 million, 54-unit senior apartment building with 51 units affordable to those making under 60 percent of county median income.
CommonBond has also committed to restricting 11 units to senior homeless veterans who have permanent disabilities that make them eligible for support services. The Dane County Housing Authority is providing eight project-based vouchers for residents who can pay no more than 30 percent of income toward rent.
The housing would be built next to a separate project for homeless families that should be done next spring.
- An additional $500,000, for a total $2 million, to Heartland Housing for The Park Street Apartments, 1202 S. Park St., an $11 million project that would provide 58 units of permanent housing with support services for homeless individual adults and some couples.
After Heartland failed to secure WHEDA tax credits this spring, the city moved to save the project by buying the site, which would have been placed on the market.
The city used part of Heartland’s 2017 funding to buy the property.
The affordable housing projects all have some units set aside for those making less than 30 or 50 percent of county median income.
Resolutions to provide financial support will be considered by committees with the council expected to make decisions on Oct. 17.
The city’s Affordable Housing Initiative, begun in the 2015 budget, relies heavily on WHEDA tax credits to help developers finance 60 to 70 percent or more of projects.
Through the initiative, excluding projects currently up for city funding, the city has invested $10.9 million in developments costing a total $120 million that are built, under construction or in final design. Those projects have secured $72 million in WHEDA tax credits and together deliver 643 apartments, including 567 affordable units with 105 for the homeless. The county has also invested roughly $3 million in the homeless units.
“We feel good about the projects we’re putting forward” Jim O’Keefe, city community development director