No longer a shelter concept, affordable housing developments are now a means of stabilization and empowerment that can have a long-term, positive impact.
Expanding the supply of affordable housing continues to be at the core of the U.S. Department of Housing and Urban Development’s (HUD) mission, although some state public housing policies are leaving municipalities in limbo. Instead of addressing the actual, present day need for low to moderate income housing that spans virtually every demographic—from young families to older adults—action has become limited to regulatory compliance or the latest legal rulings.
According to HUD, the generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families that pay more than this are considered cost burdened and may have difficulty affording necessities, such as food, clothing, transportation and medical care.
Currently, an estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.
These conditions indicate that there is no time like the present to evaluate who needs housing. No longer a shelter concept, affordable housing developments are now a means of stabilization and empowerment that can have a long-term, positive impact on the greater community. At the core of these revitalization efforts are collaborative public/private/civic partnerships working together to address need and demand while identifying potential redevelopment sites. Guided by new principles for neighborhood renewal, affordable housing has been propelled into a new era.
Well-appointed, maintenance-free apartment homes have risen, and continue to rise, where distressed public housing projects once stood. In fact, affordable housing developments are among the only construction starts and projects being completed. Consequently, much-needed employment opportunities are being created for the same demographic for whom these communities are being built.
Through resourceful funding strategies, such as the low-income tax credit program, tax credit assistance program and other federal, state and local incentives, safe, affordable, modern communities are replacing unproductive properties.
In particular, communities facing population surges in the wake of the residential housing crisis and the enduring lackluster economy are now experiencing significant shortfalls in low-to moderate income rental housing options. In one of the nation’s fastest growing municipalities, once-rural Woolwich Township, N.J., a population boom and a shortfall in affordable housing options were the catalyst for aggressive action by local officials. Accordingly, 86 affordable apartment-rental units, known as The Oaks, were proposed on 10.7 acres of open land as part of Weatherby. This masterfully planned, mixed-use development incorporated a wide range of housing types, including detached single-family homes, townhouses, rental apartments and age-restricted homes for active adults. Located within a designated Smart Growth Area, The Oaks was part of the township’s plan to establish a planned, compact, multi-use center.
Following local, state and federal approvals, CIS was awarded a tax-credit allocation for the $21.5 million development. Financing included syndication and sale of 9 percent low-income housing tax credits; $2.8 million in permanent mortgage financing from the New Jersey Housing and Mortgage Finance Agency; and $2.95 million in Tax Credit Assistance funds. Additional funding was secured from eight local banks that earned Community Reinvestment Act credits.
Construction of The Oaks, which features a unique exterior front-door entry for each unit, was completed late last year. Initial projections indicated a 95 percent or more occupancy rate within seven months. In less than five months, the club-like community achieved a 100 percent occupancy rate and has a waiting list. This demonstrated that demand for newly constructed, high-quality affordable rental housing was even greater than anticipated. The Oaks is the first of three affordable communities being incorporated into this emerging neighborhood.
Urban Revitalization
Recognizing that people are defined by where they live regardless of income level, affordable housing developments are also an effective mechanism for urban revitalization and a means of instilling pride in one’s own city. For one Northeast city, which recently completed a multi-phase HOPE VI Revitalization Project, the replacement of 650 radically distressed, crime-ridden public housing units with affordable rental, lease-to-own and homeownership units has transformed a former industrial district into a thriving working-class neighborhood and waterfront hub.
The addition of more than 600 newly built, amenity-filled affordable units for young adults, families and seniors is a testament to the efforts of a far-reaching grassroots effort that included community leaders, civic organizations, housing authority representatives, local officials and a private developer. The new communities also paved the way for the addition of several new focal points, including a local community center, bank and school, as well as several retail and dining establishments. Not only did the creation of unique affordable housing options help balance and stabilize this neighborhood, it also enhanced property values in surrounding districts.
Affordable housing has the power to enhance municipalities and cities, while advancing opportunities for people of all ages and socioeconomic backgrounds. From helping to stabilize a community impacted by a high number of single-family housing foreclosures or a downtown commercial district with high vacancy rates, to replacing a distressed property with a modern, aesthetically pleasing residential building, affordable housing development is one of the most effective, widely implemented economic redevelopment tools. It is not income specific—it benefits one and all, equally.
Christiana Foglio is Founder, Owner and Chief Executive Officer of Community Investment Strategies Inc. She can be reached at
cfoglio@cisnj.com or
609/298-2229.