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Should the city tap the brakes on Low Income Housing (LIHTC) projects?


GRDadof3

Should the city begin to limit low-income housing projects downtown?  

33 members have voted

  1. 1. Should the city begin to limit low-income housing projects downtown?

    • Yes, there are now too many
      14
    • No, downtown needs MORE workforce housing
      3
    • The city shouldn't make decisions as to the housing mix
      0
    • The city needs a downtown housing plan
      20
    • Other (please explain below)
      0


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are middle income apartments a feasible option for developers. Its crazy how much these rehabs cost and the only reason they aren't all high cost is because of the tax credits.. .Should we have incentives for developers who target the middle?

 

We did. The brownfield and historic preservation tax credits served this purpose. The LIHTC is the remaining game in town to do tough urban redevelopment projects.

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are middle income apartments a feasible option for developers. Its crazy how much these rehabs cost and the only reason they aren't all high cost is because of the tax credits.. .Should we have incentives for developers who target the middle?

 

Is it wiser to let an old unused building sit until the right opportunity arises, something that is supported by the market? Or should the remaining old buildings be locked into low-income housing for a quarter of a century? Heavily subsidized by government tax credits that are sold on the market to raise equity? Just to get something in them?

 

How did people view Morton House before it was taken over by Rockford? Or what about Stuyvesant?

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Agreed. Are there safeguards in place to make sure these developments don't eventually become Morton House / Stuyvesant quality? I hope that as part of granting LIHTC, they are required to maintain the properties at a certain level. What may start out as a development built by a local/regional group with the best intentions, could easily end up in a out of state real estate holding company that doesn't really care (again, Morton House as an example). 

 

I'm surprised that people don't want to have this discussion (here or other forums). Grand Rapids has the opportunity to plan for a great future. It seems like little thought is focused on the big picture.

 

Joe

 

Is it wiser to let an old unused building sit until the right opportunity arises, something that is supported by the market? Or should the remaining old buildings be locked into low-income housing for a quarter of a century? Heavily subsidized by government tax credits that are sold on the market to raise equity? Just to get something in them?

 

How did people view Morton House before it was taken over by Rockford? Or what about Stuyvesant?

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Agreed. Are there safeguards in place to make sure these developments don't eventually become Morton House / Stuyvesant quality? I hope that as part of granting LIHTC, they are required to maintain the properties at a certain level. What may start out as a development built by a local/regional group with the best intentions, could easily end up in a out of state real estate holding company that doesn't really care (again, Morton House as an example). 

 

I'm surprised that people don't want to have this discussion (here or other forums). Grand Rapids has the opportunity to plan for a great future. It seems like little thought is focused on the big picture.

 

Joe

 

It sounds like the Salon is going to have a meetup about this.

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Having managed a LIHTC building, the requirements for maintaining standards are pretty high. The physical grounds are frequently inspected and the paperwork as it relates to management and reporting tenant income is strictly monitored. It is my understanding that owners of LIHTC who loose their tax break are also required to pay the previous taxes they would have paid under normal circumstances. ("The nightmare scenario") 

 

The city needs market-rate housing, but in general, I'm in favor of LIHTC as a means towards an end. These units are typically too expensive for derelicts and too small for poor urban and rural families and their related problems. The city has ample space for market-rate development, and the tax breaks won't continue ad infinitum. We need bodies downtown and the system is encouraging development.  

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  • 2 months later...

richblockspoorblocks.com

 

Has anyone seen this? I still do not know where I stand on this issue, but this was interesting to see rent and income data by census tract.  I cant believe that there are not more market rate units coming into the supply downtown.  It seems like any new project instantly is booked and there is usually a waiting list after that.

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richblockspoorblocks.com

 

Has anyone seen this? I still do not know where I stand on this issue, but this was interesting to see rent and income data by census tract.  I cant believe that there are not more market rate units coming into the supply downtown.  It seems like any new project instantly is booked and there is usually a waiting list after that.

 

Market rate is more expensive to build, and takes a lot more upfront capital to get started than LIHTC housing (which actually pays back the developer quite handsomely).

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Higher risk, higher reward. Also market apts gives one more flexibility. LIHTC projects are income restricted for decades. So if you are bullish on downtown, then your market rate exit strategy may include converting apartments into condos. 

 

So then what is the incentive to even build market rate housing when LIHTC is so much easier?

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So then what is the incentive to even build market rate housing when LIHTC is so much easier?

 

IF you can do market rate, then market rate makes more sense. But you have to be a well oiled development team to do it, and those are few and far between these days, in this market. At some point, a few outsiders will discover this market and do some market rate apartments and condos.

 

I actually foresee some national developers coming in to the area soon to do market-rate apartments outside the city. Probably a few, and probably some big ones.

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  • 4 weeks later...

The project on the Ryder Truck facility site on the West side of the river died. Not sure if it was a financing issue or not.


The Stuyvesant apartments were recently purchased and are now undergoing a renovation.  not sure what this means in terms of tenants or the buildings future.

 

I thought there was a whole discussion thread on the Stuyvesant?

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  • 3 weeks later...

http://www.mlive.com/business/west-michigan/index.ssf/2013/12/plans_for_37_million_downtown.html#incart_river_default

 

Denied,  are the state and city saying enough is enough?   Far be it from Brookstone to build something in this town market rate.

 

It will be interesting to hear "why" it was denied.

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