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Strategic tax credit allocations make room for more affordable housing

US construction spending tumbled in April
Posted at 3:52 PM, Jul 03, 2019
and last updated 2019-07-03 15:52:59-04

LANSING, Mich. — The latest round of federal tax credit allocations took a smart approach to funding that will result in more affordable housing units. The Michigan State Housing Development Authority is awarding more than $13.8 million in Low-Income Housing Tax Credits (LIHTC) to build or rehabilitate 14 developments, Acting Executive Director Gary Heidel announced today.

“These tax credits are a limited resource, and there is always a greater demand than what we have available to allocate,” Heidel said. “MSHDA is developing new ways to strategically leverage our existing resources to update and develop a large number of affordable rental housing and improve efficiencies across the board.”

About half of the total units in the 14 LIHTC-backed projects will be brand new. The remaining 503 apartments will benefit from critical safety improvements, energy efficiencies and modernized amenities.

Eleven of the developments are in Opportunity Zones, areas established by Congress in the 2017 Tax Cuts and Jobs Act that are eligible for additional tax benefits aimed at spurring private investment, economic growth and jobs in distressed communities. Adding to the housing stock in these areas will expand the affordable options for a growing workforce.

“Housing tax credits are a critical resource for developers when planning to build or rehabilitate quality affordable rental housing,” Heidel said. “Overall, we estimate that this round of tax credit awards will leverage more than $126 million in private investment for Michigan.”

Two specific properties were selected. The two Lansing properties included:

Walnut Street/Ferris Manor

517 N. Walnut and 516 W. Saginaw (714 N. Pine added for community space)

Lansing, MI 48933

Walnut Street/Ferris Manor will consist of the rehabilitation of 32 units of affordable housing. Twelve of the 32 units will be designated as permanent supportive housing units. The development received an award of Low-Income Housing Tax Credit from the Michigan State Housing Development Authority in the annual amount of $272,000, which will leverage approximately $2.4 million of private money towards the creation of affordable housing in Lansing over the 10-year lifespan of the tax credits.

Willow Vista Apartments

540 and 608 W. Willow

Lansing, MI 48906

Willow Vista Apartments will consist of the rehabilitation of 19 units of affordable rental housing. The Low-Income Housing Tax Credits will assist in providing the funding to make the necessary updates to preserve the units as affordable. The development received an award of Low-Income Housing Tax Credit from the Michigan State Housing Development Authority in the annual amount of $136,721, will leverage approximately $1.3 million of private money towards the preservation of affordable housing in Lansing over the 10-year lifespan of the tax credits.

The 14 projects that earned LIHTC awards in this funding round are:

JPS Petoskey, Petoskey
Developer: Werth Investments, LLC
LIHTC award: $1,111,406

Walnut Street/Ferris Manor, Lansing
Developer: Capital Area Housing Partnership
LIHTC award: $272,000

Willow Vista Apartments, Lansing
Developer: Ginosko Development Company
LIHTC award: $136,721

Harrison Circle, Kalamazoo
Developers: Nickel Spitters, LLC and NOMI II, LLC
LIHTC award: $1,118,500

Antoine Court, Grand Rapids
Developers: Mount Mercy Housing Corp/Grand Rapids Housing Commission
LIHTC award: $1,387,558

Erin Park, Eastpointe
Developers: Community Housing Network and Cove Investments, LLC
LIHTC award: $1,368,360

Hillcrest Apartments, Manistee
Developers: Hollander Development Corporation and Little River Real Estate Management, LLC
LIHTC award: $1,091,745

Winston Commons, Pontiac
Developer: The Woda Group, Inc.
LIHTC award: $1,149,000

7850 East Jefferson Phase I, Detroit
Developer: Ginosko Development Company
LIHTC award: $889,365

7850 East Jefferson Phase II, Detroit
Developer: Ginosko Development Company
LIHTC award: $889,365

Beaubien, Detroit
Developer: American Community Developers, Inc.
LIHTC award: $1,500,000

Cathedral Tower Apartments, Detroit
Developer: MRK Partners, Inc.
LIHTC award: $1,500,000

Milwaukee Junction Apartments, Detroit
Developers: MHT Housing, Inc. and The Detroit Catholic Pastoral All
LIHTC award: $570,203

Orchestra Place Apartments, Detroit
Developer: LarC Properties, Inc.
LIHTC award: $887,876

LIHTC are federal tax credits administered by MSHDA through a competitive application process. The Authority holds two funding rounds per year, in October and April, each for roughly half of the available $27.5 million credit. Developers can draw from their tax credit amount annually for 10 years, keeping housing affordable over the long term and sustaining major investments in local communities.

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