Developers Plan 299 Affordable Apartments

Four Milwaukee projects are among the 49 applications submitted to the Wisconsin Housing and Economic Development Authority (WHEDA) for low-income housing tax credits. It’s the lowest number of city projects submitted in recent years.

The credits are the most common tool used to create affordable housing in Wisconsin and require developers to set aside a pre-determined number of units at a discounted rate for those making no more than 60% (with few exceptions) of the area’s median income for a period of at least 30 years.

In 37 communities across Wisconsin, developers are seeking to build or rehabilitate 2,952 apartments through the program, 2,685 of which would be affordable.

The Milwaukee proposals represent 299 of the 2,685 proposed affordable units. Last year 13 of the 54 applications were Milwaukee projects and 10 city projects ultimately received credits, yielding 713 planned affordable units. Projects in the city were allocated credits for 520 units in 2019 and 317 units in 2020.

Making the discrepancy between this year and past years larger is the fact that one of the four Milwaukee requests, the 68-unit Bethesda Cornerstone Village – Highland, isn’t a new request but a supplemental request to a 2021 award.

WHEDA uses an annual competitive process to award the credits, with an announcement often coming in April. Applications, like in past years, exceeded the amount of available federal credits.

“WHEDA tax credits and financing are not sufficient to address the state’s affordable housing needs,” said WHEDA interim Executive Director Kim Plache in a statement. “WHEDA remains committed to working with its partners to help communities, large and small, expand housing options.”

The agency, according to a press release, anticipates allocating approximately $31 million this year. That’s down from $35.1 million in 2021, which the agency attributes to the expiration of a federal program. The credits are provided by the federal government and administered by the state.

Two different competitive grant programs exist. One provides a 9% federal tax credit and the other provides a 4% federal and 4% state income tax credit.

Developers leverage the credits, often selling them to institutional investors at a slight discount, to create equity. The credits offer a dollar-for-dollar reduction on income tax bills. The awards are made for 10 years, meaning a $1.2 million award turns into $12 million.

A handful of the Milwaukee projects have been publicly disclosed already, while other developers have disclosed little public information.

And despite the shortage of new credit requests, there is no immediate shortage of projects in the development pipeline. Projects that first sought credits as far back as 2019 are still under construction or have yet to break ground, including The Community Within The Corridor, Five Points Lofts, Phillis Wheatley School, William McKinley School, City Place Two and EIGHTEEN87 on Water.

Project List

Bethesda Cornerstone Village Highland – Additional Credit

• Developer: Bethesda Lutheran Communities
• Units: 68 (Affordable: 62)
• Type: New Construction – Supportive/Elderly
• Credit Request: $191,000
• Program: 9% Federal
• Location: 3200 W. Highland Blvd.
• Description: This request would build on a $1.09 million 2021 award to fill a project financing gap

Highland Gardens

• Developer: Housing Authority of the City of Milwaukee
• Units: 114 (Affordable: 114)
• Type: Acquisition/Rehabilitation – Preservation
• Credit Request: $1.2 million
• Program: 9% Federal
• Location: 1818 W. Juneau Ave.
• Description: HACM applies annually, leveraging the credits to rehabilitate housing often built with earlier federal housing programs

Historic Perlick Lofts

• Developer: McClendon Capital Group and Heartland Housing
• Units: 80 (Affordable: 66)
• Type: Adaptive Reuse – Majority Elderly
• Credit Request: $1.2 million
• Program: 9% Federal
• Location: 3100 W. Meinecke Ave.
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Walker’s Point

• Developer: Heartland Housing
• Units: 68 (Affordable: 57)
• Type: New Construction/Adaptive Reuse – Family
• Credit Request: $1.2 million
• Program: 9% Federal
• Location: Unknown
• Description: Heartland declined to publicly discuss the proposal. The project type field declaration indicates it could involve the purchase and rehabilitation of a building with existing tenants.