Riverfront housing

[SupercityGR]

New housing along river http://www.mlive.com/business/west-michigan/index.ssf/2013/01/riverfront_housing_planned_at.html#incart_river

[sfloria]

Didn't see that coming!  Its nice to see a project in that area pay respect to the river.

[GR8scott]

looks nice........but Its "subsidized" housing? 

[SupercityGR]

looks nice........but Its "subsidized" housing? 

 

Just means normal people can live there

[GRDadof3]

looks nice........but Its "subsidized" housing? 

 

I think what they mean is that it's using MSHDA's Low Income Housing Tax Credit system, which requires a certain percentage of the units be income restricted.

 

It's nice seeing that old Ryder site get re-used. I never thought it would get redeveloped with how much they wanted for it.

[jthrasher]

MORE low income housing?  Yeah, that's what DT needs more of. 

 

It's great to see that area redeveloped but it's not exactly a residentially friendly area on that side of the river right now

[RegalTDP]

It's great to see that area redeveloped but it's not exactly a residentially friendly area on that side of the river right now

 

North Monroe was pretty unfriendly back when they started work on the Boardwalk, too.

 

But in this case, at least the 6th Street Bridge nearby puts a good-sized park, along with the rest of downtown, in easy walking distance.

[joeDowntown]

It seems like an odd spot for redevelopment (right now), but I'm happy to see more residential near downtown. I'm a bit confused by the low income housing as well. Is this just the easiest way to make a buck (or get tax credits)? It seems like most developers go this route, yet everything points to downtown needing more market-rate housing. 

 

Is income restricted the same thing as section 8? Do these developments still attract recent college grads who may be new to the workforce?

 

Joe 

[GRDadof3]

It seems like an odd spot for redevelopment (right now), but I'm happy to see more residential near downtown. I'm a bit confused by the low income housing as well. Is this just the easiest way to make a buck (or get tax credits)? It seems like most developers go this route, yet everything points to downtown needing more market-rate housing. 

 

Is income restricted the same thing as section 8? Do these developments still attract recent college grads who may be new to the workforce?

 

Joe 

 

 

The LIHTC program is not the same as the Federal Section 8 program. You can probably find some Section 8 housing around GR. I think the redevelopment at South Division and Franklin is Section 8. But I "believe" it's more tenant focused, and tenants actually get vouchers from the federal government under Section 8, and can use them at any rental that accepts section 8 vouchers. LIHTC is specifically project/developer focused.

 

I think a lot of developers are using LIHTC because they can sell the credits on the market, which helps with getting the project financed (gives them more equity down).

 

The MiBiz article someone posted earlier explains much of how the program works.

 

I think it's interesting that a bunch of the MLive commenters are asking the writer Matt Vandebunte why there isn't more market rate housing downtown. As if the decision is his.

 

BTW, here are the income qualifications for another LIHTC project, 101 S division:

1 person $26,520

2 persons $30,300

3 persons $34,080

4 persons $37,869

[John E]

I'm pretty sure that "The Commons" at Division and Franklin are all section 8 housing. Dwelling Place has a few properties that are section 8, Weston Apartments, Vern Berry Place and Calumet Flats (Above God's Kitchen.). The Herkimer was not section 8 in total. They did get some "rooms" to be section 8 when the VA got involved. House renal properties are even able to accept section 8 tickets. Properties that are section 8 are able to get a bunch of money for remodeling every 20 years from the Federal Government.
I hope I didn't make that confusing. There is a difference between section 8 properties and places that accept section 8 tickets. Section 8 tickets takes some doing to get and there is a waiting list. Some can wait years to get theirs. I don't know if the Globe Apartments are section 8 or not.
Section 8 properties are market rate with the government subsidizing the amount over 30% of the persons' income along with a heating credit. People can pay full market rate or get paid with the heating credit that they can use for the electric bill.

[Jippy]

My simplified version of how LIHTC works: 

 

Developer applies and receives allocation by the State. Each state receives an annual LIHTC allotment based primarily on population. The developer can then sell those tax credits to companies/individuals that want to reduce their tax liability. For example, $100,000 of credits could be purchased for $0.85 for a dollar of credit, netting the developer $85,000 in equity for the project. The purchasers saves $15,000 on taxes.

 

In return, the developer agrees to rent restrict the appropriate percentage of units based on the Area Median Income. As GRdad indicated a person of 1 would be eligible at $26,520, and would have rent capped at 30% of their salary. The property would be required to meet these requirements for 30 years, at which point it could revert back to market-rate. 

 

Again, the primary reason that we are seeing a huge influx of these projects is that GR is a desirable downtown with relatively affordable land prices. However, the cancellation of the Historic and Brownfield tax credits has forced developers to use this remaining avenue allowed. What remains to be seen is if all of these projects will receive LIHTC allotments, or if this is a necessary step to apply for the project. 

[joeDowntown]

Thanks for the info. 1 person at $26,500 seems awfully low. I was hoping it would be a bit more inclusive to include "creative class" folks recently graduating from college. But I think it would have to be more in the $32k-$36k realm to include this group. 

 

It's interesting to see that we're building like crazy for the low-end, the market doesn't have enough inventory on the high-end, and if you are in the middle, it is probably hard to find anything downtown.

 

Joe 

[GRDadof3]

Thanks for the info. 1 person at $26,500 seems awfully low. I was hoping it would be a bit more inclusive to include "creative class" folks recently graduating from college. But I think it would have to be more in the $32k-$36k realm to include this group. 

 

It's interesting to see that we're building like crazy for the low-end, the market doesn't have enough inventory on the high-end, and if you are in the middle, it is probably hard to find anything downtown.

 

Joe 

 

I continually hear that there's nothing in the middle. I think though that it's a function of cost and getting the pricing down to reasonable levels. $250+ per square foot seems to turn a lot of people off, particularly since it means giving up quite a bit of space that people grow accustomed to in the suburbs (1000 sf condo is a good sized condo). But that's about what it costs for new mid-rise and high rise construction.

 

I think the general industry standard to lower that cost is to go up higher than 10 stories, and then your cost per square foot (all other variables being equal) begins to drop. Imagine taking the roof of your building and dividing the cost into 10 stories worth of units, vs 20 stories worth of units. That roof cost per unit goes down in a 20 story building. Same with an elevator shaft. Same with the foundation. Obviously at some point above 30 floors or so, you incur additional expenses related to height (perhaps added fire suppression, etc..). It's like "economies of scale" applied to a building. I believe ??? that it's why River House went so high. There were economies of scale that made it worthwhile to just keep going up a few more floors, a few more, a few more...

 

But then when you go above 10 stories, you have to deal with more condos to sell/apartments to rent to make investors and banks happy (and to get the darned thing kicked off).

 

The LIHTC program was not created for creative classers, it was created to offset the explosion in housing that was too expensive for low-income households. That was more of a problem in bigger cities than it was here.

[GRDadof3]

My simplified version of how LIHTC works: 

 

Developer applies and receives allocation by the State. Each state receives an annual LIHTC allotment based primarily on population. The developer can then sell those tax credits to companies/individuals that want to reduce their tax liability. For example, $100,000 of credits could be purchased for $0.85 for a dollar of credit, netting the developer $85,000 in equity for the project. The purchasers saves $15,000 on taxes.

 

In return, the developer agrees to rent restrict the appropriate percentage of units based on the Area Median Income. As GRdad indicated a person of 1 would be eligible at $26,520, and would have rent capped at 30% of their salary. The property would be required to meet these requirements for 30 years, at which point it could revert back to market-rate. 

 

Again, the primary reason that we are seeing a huge influx of these projects is that GR is a desirable downtown with relatively affordable land prices. However, the cancellation of the Historic and Brownfield tax credits has forced developers to use this remaining avenue allowed. What remains to be seen is if all of these projects will receive LIHTC allotments, or if this is a necessary step to apply for the project. 

 

Actually, the land prices downtown are particularly very expensive.