In an effort to create more affordable housing in Madison, the Wisconsin Housing and Economic Development Authority has awarded $1.8 million in Low-Income Housing Tax Credits.
These tax credits will help fund affordable housing developments in Little Chute and Madison, creating 152 units of rental housing, according to the WHEDA press release.
The credits will help to complete a five-year goal set in 2014 to create 1,000 affordable housing units in Madison, Chief Operating officer of WHEDA Brian Schimming said.
“So far, they are at 800 units of their 1,000 unit goal, and WHEDA has been a good partner with the city in building these affordable units,” Schimming said. “WHEDA is really focused on being a public-private partnership all throughout the state, awarding more than 6.8 million in tax credits since 2016 and constructing over 750 units of affordable housing.”
The credits will be awarded over a 10-year period through the federal housing tax credit program. In exchange for the credits, developers agree to reserve affordable units for at least the next 30 years, the press release said.
According to the press release, these additional tax credits are now possible through a recently approved federal Consolidated Appropriations Act. This bill increases each state’s Low Income Housing Tax Credits allocation by 12.5 percent for 2018-21, creating $1.8 million in credits for Wisconsin.
This increase in Low-Income Housing Tax Credits marks the first expansion in the credits in over ten years, the press release said.
The money will be divided up between The Grove Apartments project in Madison and Regency Place Senior Living project in Little Chute, Schimming said. The majority of the money will go to the Grove Apartments where there will be 95 affordable units.
“This is a local, new construction project which will offer 89 units for families and 23 supportive housing units in a great location for city life,” Schimming said.
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The developers also must meet high design and operating standards, with criteria for strong management, excellent development quality, demonstrated market need, provision of services and amenities and proper local zoning and permits, the report said.
Schimming said the homeless population of Madison is benefiting from the increase in affordable housing as well.
“Of the 1,000 from the five-year goal, 250 units are for homeless individuals, making it apart of the whole ‘Housing First’ strategy,” Schimming said. “So the idea really is to serve two populations — the homeless but also working families that just need an affordable place to stay.”
Getting people off the streets as quickly as possible is one of the main goals, Schimming said. He believes housing is key to getting people to the next steps of their lives.
During a press conference, Mayor Paul Soglin commented on the announcements, saying they were great progress for the city.
“We’re very pleased with our progress in setting a goal of a five-year creation of 1,000 affordable housing units to be completed in terms of approvals and under construction by the end of 2019,” Soglin said.
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Soglin said Madison will clearly meet that goal with the numerous projects, and the Grove Apartments will contribute a lot to that goal.
Soglin also commented on the increase in home values throughout Madison, and while he believes this is a benefit for homeowners, it puts more pressure on the city to create affordable housing in the market.
“A starter home that could have been purchased at the tail end of the recession for say $125,000 is now $150,000 and for all those starter homes that have increased in value like that, that’s taking a significant part of the community out of the housing market,” Soglin said.
The increase in homes also puts emphasis on building housing outwards, which is something that will be less attractive to many residents, Soglin said, as people want to live close to the city.
To combat this, Soglin believes other locations within the city will need to be looked at in the future.
“The fact is that people want to live in the city,” Soglin said. “They want to be a bus ride away from a Badger game, from the public library or State Street, or walking distance to great restaurants and hardware stores. That’s what urban life is about, and we have to figure out how to create that housing.”
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Soglin said to create this housing in Madison, shopping malls will be a consideration, as malls take up a lot of space and there aren’t as many people shopping in there anymore.
Soglin said it is estimated that more than 50 percent of the malls in the country will not exist in the next 10 years. That we have overbuilt shopping malls and strip malls, and malls will disappear.
“We’ve got a lot of tired shopping areas in the Madison area, and we will be encouraging the owners of these shopping centers to not only consider a more walkable design but also, to integrate multi-story housing on top of retail,” Soglin said. “But, with a real emphasis on affordability, and creating housing opportunity for people who are making less than the $75,000 per year.”
As for the projects in place right now, Soglin said they are going to speed up the review process for building affordable single-family homes and apartments.
Despite the pressure on the market and future considerations, Schimming said these cuts will be a great thing for the city of Madison and its residents.
“This is a good thing for the state, it’s a good thing for the city, it’s a good thing for the neighborhood by putting good housing in,” Schimming said. “It’s almost something you need to see once it gets done to realize how much it is going to help those families and those workers.”