Committee Approves Funding for Suburban Affordable Housing Projects

The Milwaukee County Board’s Finance Committee recommended funding four suburban affordable housing projects Thursday, but not before one supervisor tried to block the financing of a development that would provide affordable, independent living options for residents with disabilities.

The board is considering releasing approximately $9.5 million in federal American Rescue Plan Act (ARPA) funds for four affordable housing projects in the suburban communities of Wauwatosa, Brown Deer and South Milwaukee. They are the first to receive funding from a $15 million pool of funds the county set aside in 2022 for suburban affordable housing.

The county’s housing division worked with the Community Development Alliance (CDA) to find affordable housing projects it could help get off the ground with funds from the county’s $185 million ARPA allocation.

The proposed awards include $2 million for a project with 56 affordable units being developed by Jewish Family Services at 4114 W. Woodale Ave. in Brown Deer, $2.48 million for 56 units being developed by MSP Real Estate Inc. at 11500 W. Burleigh St. in the Mayfair Collection in Wauwatosa, $2.5 million for 82 affordable units to be incorporated into Scott Crawford Inc. and J. Jeffers & Co’s redevelopment of the former Bucyrus Plant, 1100 Milwaukee Ave., in South Milwaukee and $2.5 million for 17 units at 7501 W. North Ave. in Wauwatosa being developed by Luther Group.

It’s the Luther Group project, known as Cornerstone Village, that has drawn opposition from Sup. Peter Burgelis.

The supervisor, starting at the Jan. 23 Committee on Community, Environment and Economic Development meeting, objected on the grounds that the per-unit cost for the affordable units incorporated are three to four times higher than the per-unit cost of the other three projects.

“This fancy building on the corner of North and Wauwatosa avenues, with EV chargers and a rooftop patio, is getting $147,000 per unit,” Burgelis said.

The project calls for a 94-unit building consisting of two and three-bedroom units and townhomes. The county’s funding would help subsidize 24 units that would be set aside for persons with intellectual and developmental disabilities, and 17 of those units would be offered at below-market rates. Luther said because two of the units are two-bedroom units it would effectively bring the total affordable unit to 19.

The project includes underground parking, a community kitchen, a media center and EV charging stations. The developer is also partnering with AbleLight, a non-profit human services organization that works with people with intellectual and developmental disabilities on the project.

“The mission of the project is really to provide a larger community with modern and efficient housing options,” said Matthew Riesterer, Luther Group asset manager. “But there is a special focus on providing affordable and safe housing for individuals with intellectual and developmental disabilities.”

James Mathy, county housing division administrator, said the project includes “very, very affordable rents. That would have been frankly impossible to do without this ARPA money.” Riesterer said the cost for the units would fall between $650 and $1000 a month.

The county’s housing division would require a deed restriction to maintain all the affordable units for at least 20 years. The county’s ARPA task force has already reviewed the awards.

Burgelis sought to block funding for the project at the economic development committee, but had to withdraw the motion as that committee did not have the authority to deny funding for the project.

Teig Whaley-Smith, CDA chief executive, explained, following Burgelis’ criticism of the project, that Luther Group was not seeking Low-Income Housing Tax Credits (LIHTC), unlike the other three projects before the board. “If you look at the overall public contribution to these projects, they all are at about $280,000 per unit, which effectively subsidized nearly the full cost of building these, because the rents are only sufficient to cover the operating costs.”

The subsidy on the Cornerstone development is being split between the county and the City of Wauwatosa, which has authorized a tax incremental financing district for the project. Whaley-Smith called LIHTC a “risky proposition” as only about 20% of projects are awarded the credits after applying. “The policy decision before the board on this particular project is: do you want to require that projects get [LIHTC], or not.”

The county must legally allocate all its ARPA funds by 2024, and they must be spent by 2026. It began work on the affordable suburban housing project in the first half of 2022.

Additionally, Whaley-Smith said that the Cornerstone development was approaching affordable housing in a fundamentally different way from the other projects. The units are being incorporated at the building level instead of the community level, which necessitates a different type of developer, one that isn’t pursuing LIHTC.

Burgelis was not satisfied with the response from county officials and project partners. He went to the board’s Finance Committee Thursday with an amendment that sought to strip funding from the project.

“I still don’t have an understanding of how four times the cost is justified,” he said. He was met with opposition by disability rights advocates and his colleagues on the board.

“Is the county ready to spend four times as much on this project as we are on other projects?” Burgelis asked his colleagues, adding that he thought it represented an “opportunity cost” because the funding could be used on future affordable housing projects.

The developer said not providing the grant would come at a cost of killing the project.

“A proposal to eliminate or even reduce the support on a per-unit basis would essentially tank the project, and the project would not be able to go forward,” said Jason Luther, president of Luther Group.

Community member Bill Pickert said his son is someone who would benefit from the project. He said he was directing his comments to the committee, but also, specifically to Burgelis who was the lone supervisor seeking to scuttle the project

“Based on our personal experience, there are very few venues that allow for the safety, the proximity to transportation, the involvement in a network, or in a location that is close to the network of help for these adults who have these disabilities,” he said. “They are very high functioning, they contribute to the tax rolls, and they’re very, very motivated to live on their own independently.”

Pickert said the costs to care for family members with disabilities are already paid by families, the county and the state and should be a factor when considering the cost of the project. He said the financial impact for the families, and other social and mental well-being of the people that would live there “far outweighs” Burgelis’ concerns about the initial, one-time cost to the county.

Sup. Shawn Rolland, who represents the area, is supporting the project.

“I remember, I had a budget town hall last year, and actually the majority of the speakers were parents of young adults with special needs intellectual and development, developmental disabilities. And they came to the microphone with passion for their kids wanting them to be able to have an affordable home in Wauwatosa,” said Rolland.

Sup. Steve Taylor said he thought the project was a departure from the typical affordable housing project because it was integrating the units into a market-rate development as opposed to relegating affordable housing to a “little postage stamp of land.”

“It’s basically more welcoming – is the way I look at it,” he said. “And I think it’s worth it.”

Other members of the committee, supervisors Willie Johnson, Jr. and Juan Miguel Martinez, said they understood what Burgelis was trying to do, but that they supported the project and its goals.

After the feedback from the community and his colleagues, Burgelis withdrew his amendment and the funding package for the four suburban affordable housing projects was passed unanimously. The full county board must still pass the allocation.