SOUTH BEND – Prior to moving into Washington-Dunbar Homes in 2018, Victoria Bedford and her two children lived in a two-bedroom third-floor apartment in Mishawaka.
Bedford remembers climbing the partially closed concrete steps in the winter, often carrying groceries and fearing that his children, aged 2 and 4, would disturb neighbors with their sometimes ‘loud or rowdy’ games.
In contrast, their two-story townhouse now has three bedrooms, a basement, washer and dryer, and downstairs access. Her monthly rent of $ 600 is only $ 20 more than what she paid.
“I can honestly say that when I come here I feel like home,” Bedford said, “compared to the other apartment I was in, I didn’t feel like home.”
Barriers to Affordable Housing: Community leaders meet to discuss
Bedford, 32, who is single and works with patients admitted to a hospital, is eligible to live in Washington-Dunbar because his income is between 30% and 60% of the city’s median household income of $ 40,265. She feels lucky to live in what is called “affordable housing,” which means that the rent is subsidized in one way or another by public or philanthropic funds.
In South Bend, government and community leaders are increasingly talking about an affordable housing crisis because there is simply not enough to meet demand. Meanwhile, some developers are trying to answer the call despite some obstacles.
“When I hear people say we’re in a crisis, I don’t know, I don’t analyze data every day,” said Marco Mariani, executive director of the South Bend Heritage Foundation. “I just know that all of our units are full and we have people applying to try to get into our accommodation. I know people double in their aunt’s house and stay in the basement, people are scrambling to find accommodation.
South Bend Heritage, a nonprofit community development and housing organization, built Washington-Dunbar in 1995 with the help of federal housing tax credits provided through Indiana Housing and Community Development Authority. In 2008, the foundation again won loans to renovate townhouses.
A few blocks northeast in the Lincoln Park neighborhood, South Bend Heritage in 2014 won the credits to build South Bend Mutual Homes, which are co-op single family homes.
But since then, the state authority has not granted credits for a new construction project in the city. He gave credit to South Bend Heritage in 2016 to build the Oliver Apartments, but these units serve as permanent housing for the homeless.
In November, the state agency decided not to help with two South Bend proposals: converting the old Marquette School building into apartments for low-income people; and a plan by Fishers-based Real America to build Diamond View Apartments, a mix of market-rate and income-eligible units in the old Fat Daddy building near Four Winds Field.
The hopes of both projects for grants this year are still alive. The state agency has placed the applications, along with those of four others in the state, on a waiting list. It was a rare move, should Congress approve an increase in funding for the credit included in the Build Back Better spending program.
The legislation was passed by the House but is blocked in the Senate.
If the bill passes, it will send Indiana an additional $ 3.6 million per year. This would not be sufficient to meet all the demands of the six projects. But Real America’s candidacy got the highest score among those on the waiting list.
Critical incentive for developers
Most developers, especially for-profit companies, will not build affordable housing without the credits. The federal government distributes them to the states, which allocate them to developers. The developers then sell the credits to investors and use the money to build homes that they believe would not be profitable otherwise.
Jeff Ryan, vice president of development at Real America, said when it comes to housing at market rates, his company typically takes out a mortgage to finance 80% of a project and uses “equity” or cash for the remaining 20%. The market rate rents are high enough to pay off the loan while generating a profit.
For affordable housing, this ratio is reversed. Cash from investors buying the credits creates 80% of the funding while 20% is borrowed. In return for generating relatively little capital for construction, the developer agrees to keep rents below the market rate.
The public authority can only fund about a third of the requests it receives from developers each year. According to IHCDA records, many more proposals are awarded to Indianapolis than to South Bend. Ryan said it’s likely because larger cities are receiving more federal funding to help developers of affordable housing cover construction costs, which helps cities’ claims to better score tax credits.
Ryan noted that the state authority gave Diamond View enforcement points because the South Bend Common Council gave the project a property tax rebate in July and Mayor James Mueller’s administration had agreed to donate the land if the project included affordable housing.
City spokesman Caleb Bauer said the city does not expect any payment for the property at this time as the project could still be funded through the waiting list. If that doesn’t happen, he said, the deal would be reviewed.
Ryan said Real America, which in 2016 renovated the old LaSalle hotel to upscale LaSalle apartments, still plans to build market-priced apartments on the site, likely this spring or early summer. If he does not win the 2022 credits, he will apply again in July for 2023 credits to add low income units.
Ryan said there is an urgent need for more apartments in South Bend, both affordable and market-priced, and in almost every market his business operates in.
“I just received preliminary data from a tax credit application we’re working on in Montrose, Colorado, and our market analyst couldn’t find a vacant apartment on the market, period,” a- he declared. “The apartment market in general is just very tight right now compared to historically, and affordability is even more tight. “
Jon Anderson, the Brownsburg-based lawyer behind the Marquette School project, did not return the messages seeking comment. But his deal with the building’s owner, South Bend Community School Corp., gives him until the end of this year to secure funding for the project before the district regains control of the property. This means he could apply for 2023 credits again in this year’s cycle.
District finance director Kareemah Fowler said she hasn’t spoken to Anderson since his candidacy failed to win the credits, but he recently emailed her telling her he still hopes to continue. the project, in particular by seeking other sources of funding.
When the South Bend Common Council in August granted Anderson a necessary rezoning for the project, Council member Troy Warner said: “There is not just a need for housing, but a housing crisis in our community. .
In a recent interview, Warner said he made the comment shortly after his daughter failed to find a market-priced apartment in South Bend without a six- to 12-month waiting list.
“There isn’t a lot of uptime, market rates or lower income,” he said. “This is particularly bad for the low income segment. I would love to see either of these projects go. Whatever type of housing we can get at the moment, I think the city should do everything possible to encourage them. “
Warner has also advocated for South Bend Heritage’s Hope Avenue Apartments project, which uses public funds to build permanent, supportive housing in the Edison Park neighborhood, despite opposition from some neighbors.
As part of the housing discussion, Mariani of South Bend Heritage thinks people need to distinguish whether “affordable housing” is for single-family home ownership, rental apartments, or housing with permanent support services.
He said more affordable housing, when properly maintained, can revitalize and stabilize entire parts of the city.
“Affordable housing can be part of a larger community and neighborhood revitalization plan strategy that needs to be well planned and publicly supported,” Mariani said.
Potential for improvement
The Mueller administration has made affordable housing a priority in its 2022 budget, having allocated at least $ 6 million in U.S. federal stimulus money to the issue.
Planned spending, which has not yet been distilled into specific programs, includes money for home repair and funding to close the gap between appraised values and what mortgage lenders are willing to lend. in neighborhoods in difficulty.
The long troubled South Bend Housing Authority also appears to be heading for changes, as well as ambitious plans, under the new leadership of Executive Director Catherine Lamberg.
In recent months, the authority’s board of directors has approved Lamberg’s requests to form a new nonprofit, “South Bend Affordable Housing Corp.” And to ask for federal funds to demolish Rabbi Shulman’s vacant apartments, as well as apartments in Monroe Circle near Four Winds Field. .
It’s unclear what Lamberg hopes to do with the new nonprofit, or what might happen next for the two properties if the buildings are demolished. Lamberg declined to be interviewed unless she could be given questions in advance, a practice The Tribune disagrees with.