Less federal funding available for housing projects

March 26, 2012
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Due to less federal funding, two nonprofit housing developers may not receive any financial support for their projects, while two others are likely to receive less money than they requested. One, though, may have its request honored in full.

Those are the recommendations the city’s Community Services Department recently made to city commissioners regarding the federal HOME funds that the U.S. Department of Housing and Urban Development awarded the city for the upcoming fiscal year.

HOME dollars are used to help create affordable housing in a city, and Connie Bohatch, managing director of the city’s department, said that funding was down by about 25 percent for FY2013 from last year, at $1.57 million. “It gets very complicated because there are levels to this funding,” she said.

If the recommendations stand, Brookstone Capital LLC, a Midland-based developer, won’t receive any HOME funds for two apartment buildings it plans to put up downtown. One would go up at 26 Cherry St. SW and offer 45 mixed-income units with commercial space over its six stories. The other would offer 38 similar rental units and also commercial space, at 205 S. Division Ave.

Brookstone Capital requested $625,000 for the Cherry Street project and $527,778 for the building on South Division. However, because HOME funds are limited, Community Services recommended that neither project be allocated federal dollars as the department has set its priority on the rehabilitation of existing housing units.

“Those were very good projects, but with limited funding we weren’t able to fund the projects,” said Bohatch.

LINC Community Revitalization Inc. asked for $202,500 to buy, rehab and sell three homes in the Southtown neighborhood, but may not  receive any dollars in this round because LINC is in line to receive some HOME and Neighborhood Stabilization Program funding for other townhome projects with which it is involved.

The Heartside Nonprofit Housing Corp. will likely receive less than it requested to expand the Herkimer Apartments, which has 122 rental units, at 323 S. Division Ave. HNHC had asked for $670,000 in HOME funds to construct 67 permanent units for the project’s first phase, but the department’s recommended funding level is $527,000.

The ICCF Nonprofit Corp. also likely will receive less than it requested. The firm asked for $351,185 to acquire, develop and sell five homes, but is projected to receive $270,000 for three of the houses.

Community Services did recommend that one developer receive its requested amount in full. The department felt New Development Corp. should receive the $300,000 in HOME funds it asked for to buy, renovate and sell three homes in the Belknap, Creston and Stocking neighborhoods.

“I think this is the best approach we can take, considering the funds we have,” said Commissioner Dave Schaffer.

“It is really frustrating to see these cuts again, again and again,” said Commissioner Rosalynn Bliss. “We’re very committed to our neighborhoods and neighborhood associations.”

Commissioners will hold a public hearing on the HOME funding requests this week and are expected to make the final awards April 17.

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