In a big boost for Madison’s bid to create more low-cost housing, the state is delivering $25.8 million in new federal tax credits for five projects, including one for 58 units of permanent housing with support services for the homeless on the South Side.
The Wisconsin Housing and Economic Development Authority on Tuesday announced that it will provide $24.4 million in new low-income housing tax credits over 10 years to help three developers build projects with a total 119 units for those making less than 60 percent of the Dane County median income, or about $46,000 for a family of three, and 58 units for the homeless.
WHEDA is delivering an additional $1.4 million to boost two projects with 103 low-cost units that received funding last year but saw the value of their tax credits drop after Congress adopted lower corporate tax rates.
But WHEDA is not awarding credits to the biggest of Madison’s projects seeking support, MSP Real Estate’s The Grove Apartments, 204 Cottage Grove Road, a $23 million, 112-unit project with 95 units available to those who make less than 60 percent of county median income. The project narrowly missed receiving credits this year and is eligible to reapply for 2019.
The credits were among $134 million in tax credits statewide that WHEDA deputy executive director Brian Schimming announced Tuesday morning at one of the Madison project sites on the Far West Side.
The city is investing in all of the projects to strengthen the developers’ proposals to WHEDA, and it is the federal tax credits that make the projects financially viable.
“We’re pleased with these results,” city community development director Jim O’Keefe said. “It’s the latest installment of what we’ve found to be a positive relationship with WHEDA and private developers in Madison.”
Mayor Paul Soglin said the income requirement for these apartments allows low income earners to find stable housing in an otherwise tough rental market.
“This is more than just talking about serving the homeless population,” Soglin said. “There are hardworking people who need to make a living to sustain a family, and they cannot do it unless there is affordable housing for working people.”
Specifically, over 10 years WHEDA is delivering:
- $9.7 million in credits to Stone House Development for the Fair Oaks Apartments, 135 S. Fair Oaks Ave., an estimated $17 million, 80-unit project with 68 apartments for those making less than 60 percent of county median income. The city is providing up to $1.35 million for the project from its Affordable Housing Fund and a $230,000 loan from city tax incremental financing (TIF). Stone House sought but didn’t get WHEDA tax credits last year.
- $6.6 million in credits to Common-Bond Communities for the Tree Lane Senior Apartments, 7941 Tree Lane, an estimated $11.2 million, 54-unit senior apartment building with 51 units aimed at those making under 60 percent of county median income. The city is delivering up to $1.48 million for the project. Common-Bond has committed to restricting 11 units to senior homeless veterans who have permanent disabilities that make them eligible for support services. The housing would be built next to a separate project with 45 units for homeless families that should be done this summer.
- $8.1 million in credits to Heartland Housing for The Park Street Apartments, 1202 S. Park St., an estimated $11 million project that would provide 58 units of permanent housing with support services for homeless individual adults and some couples. The city is providing up to $2 million for the project. Heartland failed to secure WHEDA tax credits last year, and the city moved to save the project by buying the site, which would have been placed on the market. The county is also contributing to the project. The low-cost housing projects all have some units set aside for those making less than 30 percent or 50 percent of the county median income.
WHEDA also announced additional support Tuesday for two projects that received tax credits in 2017:
- An extra $599,700 for a total $6.6 million to MSP Real Estate for the Normandy Square Senior Apartments, an estimated $11 million, 57-unit project that would provide 48 units to those making up to 60 percent of the county median income.
- An extra $810,00 for a total $8.9 million to Gorman & Co. for Union Corners Grandfamily Housing, an estimated $12 million, 59-unit project aimed at grandparents and other extended family members raising children that would provide 56 units to those making up to 60 percent of the county median income.
- Ald. Paul Skidmore, 9th District, where the Tree Lane projects are being built, said the tax credits are one part of the public and private partnerships needed to create housing for families. “It’s hard to think about a job, school or healthcare if you don’t have a home,” he said.
The city’s Affordable Housing Initiative, begun in the 2015 budget, relies heavily on WHEDA tax credits to help developers finance 60 percent to 70 percent or more of projects. The initiative is aimed at creating 1,000 low-cost units, including 250 for the homeless, over five years.
So far, the city has committed $15.8 million from its Affordable Housing Fund and the state awarded a total $94.9 million in tax credits to 13 projects with a total cost of $257 million, O’Keefe said. The projects offer a total 835 units with 744 for households making less than 60 percent of county median income. Also, 163 of the affordable units are permanent supportive units for homeless individuals or families.
Now that the city has gotten close to its goal, a new goal will be created, Soglin said.
“The way we thank people for doing a great job is we ask them for more,” he said.
State Journal reporter Shelley K. Mesch contributed to this report.