Evers Helps Finance 10 Affordable Housing Proposals

The ripple effects of the COVID-19 pandemic have effectively halted a number of proposed affordable housing developments. But a new program from Governor Tony Evers and the Wisconsin Housing and Economic Development Authority (WHEDA) aims to get things moving again.

Twenty-two projects statewide, including 10 in Milwaukee, will benefit. The awards could have a ripple effect throughout Milwaukee, adding affordable housing to the expensive Lower East Side, repurposing a vacant school on the North Side, advancing the replacement of the Martin Luther King Jr. Library, redeveloping a vacant theater and kickstarting the reinvigoration of the Garden Homes neighborhood.

WHEDA annually awards developers federal low-income housing tax credits as the primary funding source for new affordable housing, but the credits are issued at a fixed amount and do not keep pace with rising construction costs. As a result, a number of developers who secured credits in the 2020 and 2021 award cycles saw supply chain issues, inflation and rising interest rates chip away at the viability of their projects.

In April 2022, Evers announced a $20 million discretionary program that would use American Rescue Plan Act (ARPA) funds to close financing gaps. WHEDA announced Monday it received more than $38 million in requests. Using an additional $5 million in ARPA funding and $7.4 million in federal National Housing Trust funds, Evers and WHEDA expanded the available funding pool and are providing $32.4 million to help plug funding gaps.

“We thank Governor Evers for the additional commitment. Like him, we are listening to our stakeholders about their challenges and leveraging our resources to help fund more housing projects,” said WHEDA CEO Elmer Moore Jr.

The funding will advance 1,097 units of affordable housing in 11 counties.

When we initially reported on the new program, we calculated that 17 Milwaukee projects were eligible (having been allocated tax credits in 2020 or 2021). A press release Monday confirms that 10 of those proposals are receiving additional funding.

Monday’s announcement builds on a February announcement that five Milwaukee proposals would receive additional financial support from the state’s ARPA grant. Each of those projects received additional funding Monday.

The income tax credits, often sold at a discount to institutional investors, require specific units to be set aside at below-market rates to qualifying households based on countywide income levels. Federal regulations set the eligibility standards. Most of the credits are set with an income limit of 60% of the area’s median income with rent capped at 30% of household income.

Pre-pandemic, the city began creating small tax incremental financing (TIF) districts to plug financing gaps in specific projects, but the cost issue is now impacting virtually every affordable housing project. The Common Council just approved one TIF deal, $1.8 million for the Michigan Street Commons proposal next to the Iron District. The project was one of the 17 projects eligible for state funding, but didn’t receive an award.

Milwaukee Projects Receiving Funding

• EIGHTEEN87 on Water ($515,000)
• City Place Two ($2 million)
• Garden Homes Neighborhood Initiative ($973,000)
• Five Points Lofts ($1 million, received $1 million in February)
• Bronzeville Estates ($1.96 million, received $1 million in February)
• AbleLight Cornerstone Village – Highland ($1.89 million)
• Riverwest Workforce Apartments & Food Accelerator ($2 million, received $1 million in February)
• Edison School Apartments ($2 million, received $1 million in February)
• Westlawn Renaissance VII ($1 million)
• MLK Library Apartments ($2 million, received $2.9 million in February)