A Group Effort That is when the idea for The Uplands – a 40 acre development in Sun Prairie – came about. The developer and its nonprofit partners, Movin’ Out Inc. and the Community Action Coalition for South Central Wisconsin Inc., liked Sun Prairie, which is the city’s fastest growing suburb. They found a privately owned site that was 10 miles from downtown Madison and one-half mile from the Sun Prairie Business Park, which included 60 businesses employing approximately 1,800 people. “This part of Dane County would likely have gone to high-end luxury housing,” says Cindy Holler, regional director for community development for the Housing and Development Division of Fannie Mae’s Chicago office.
As part of the planning, the WPHD surveyed business park employers about the difficulties their employees have when trying to find housing. The WPHD also consulted with its Realtor, First Weber in Madison, to determine the correct product mix for the Dane County market. The group eventually developed a plan that includes 94 single-family units (including duplexes) and 49 multifamily units. The goal was to include as many rental units as possible without effecting the property values of the for-sale housing.
Sixteen of the multifamily units are two-bedroom rentals, while 33 are one- or two-bedroom condominiums. Eight of the single-family houses are also rental units. The rental housing is for people who earn between 30 percent and 60 percent of the AMI. And, 33 out of the 103 for-sale single-family and multifamily units are reserved for workers who earn below 80 percent of the AMI.
Footing the Bill But finding the land and coming up with a site plan was only half of the battle. Perkins and his group had to tackle the most challenging part of building workforce housing – paying for it. The group relied on three major sources of money for the site acquisition and land development of the for-sale portion of the site. As the primary lender, First Business Bank of Madison provided more than 70 percent of the development and acquisition costs. Fannie Mae made a second mortgage loan for site development and acquisition.
On top of this, Dane County provided a $400,000 loan for site acquisition and guaranteed the Fannie Mae loan, which allowed the developers to tap into 6 percent interest rates.
To build the rental housing, The WPHD primarily relied on 9 percent tax credits sold by the Enterprise Foundation in Columbia, Md. The developers also received financing from Bank Mutual in Milwaukee and $656,000 in HOME funds from the state of Wisconsin for the rental units. Bank Mutual also provided a second mortgage loan of $1.6 million for the rentals.
Transit- Oriented Housing in the Bay Area Coggins Square Apartments, Walnut Creek, Calif. Though she had a full-time job as the assistant to a special education teacher in the Mount Diablo Unified School District in Concord, Calif., Victoria Gonzalez, could barley afford a place to live in the pricey San Francisco suburb. Her after-tax salary of about $1,100 per month forced Gonzalez and her two-year-old son into a one-bedroom apartment in a dangerous section of Concord, where, even there, she scraped by to make ends meet. “My car was broken into, and I did not feel safe going out at night,” she says.
Luckily for Gonzalez, one of her friends was driving near the Pleasant Hill Bay Area Rapid Transit (BART) Station when she noticed a new apartment complex being built. Gonzalez went to the site to find out more details and discovered she qualified for a $675 per month two-bedroom apartment. This saved her about $300, plus it put her in a nicer neighborhood that is near BART and closer to her job.
Seeking Affordability This is exactly what the Contra Costa County Redevelopment Agency had in mind when it assembled the site, about 30 minutes east of San Francisco, in the early 1990s. The agency wanted to find a developer who would build at least 140 units and set aside at least 15 percent of them for affordable housing. “Our board of supervisors had a strong policy commitment to provide housing for a wide range of income levels,” says Jim Kennedy, deputy director of the agency.
Twelve local organizations came to the agency with bids to develop the site, but the agency and local groups eventually chose BRIDGE Housing Corp., a nonprofit housing developer based in San Francisco, because of its plan to incorporate for-sale housing with rental apartments. The BRIDGE plan came in two parts. It would build 87 affordable housing apartments and Holliday Development, an Emeryville, Calif., developer, would build 54 market-rate condos. In addition, there would be a pool and courtyard in between the condo and apartment buildings. The apartments units would serve a variety of incomes with 17 units set aside for people making 30 percent of the area’s median income, 38 units set aside for people making 50 percent of the area’s median income, and 32 units set aside for people making 60 percent of the area’s median income.
As BRIDGE would soon find out, however, getting the neighborhood’s approval would be easier than getting financing. The market-rate lofts were the easy part, being entirely privately financed. They sold for about $410,000 each. To build the apartment units, the developers wanted to get the 9 percent Low-Income Housing Tax Credits with supplementary funding from the agency, Contra Costa’s Community Development Block Grant (CDBG), and HOME funds. However, the competition for the 9 percent tax credit was intense in California. The project went through California’s tax credit lottery system in 1996, 1997, and 1998 – each year it lost.
