MADISON, Wis - About 100 families will be able to afford rent at a new apartment on the east side after the Wisconsin Housing and Economic Development Authority announced they will give the project the $13.4 million in low-income tax credit needed for development.
The Grove is a $20 million project that will bring 112 units to Cottage Grove Road. The location near the intersection of Monona Drive is currently occupied by a public library and a Habitat for Humanity store.
The current structures will be torn down by the end of 2018, with a new library set to open in a different location in September.
The Grove will also have retail space on the bottom floor.
The two-building complex will rent most units to people who make less than 60 percent of the median income in Dane County, which is about $38,000.
Twenty three of the apartments will be for households below 30 percent of the county's median income.
"People are struggling and they're usually struggling silently," said David Ahrens, alder for District 15.
He said he has talked to families in his district who will benefit from this new affordable housing.
"For example a family of three, where they're making $45,000 a year, can rent a two-bedroom apartment for about $1,000 a month. And that in Madison is a bargain now," said Ahrens.
The low-income housing at The Grove is expected to be priced so people are paying no more than one third of their income for housing.
In February, the developers at MSP Real Estate were told they would not be one of the projects getting low-income housing tax credits from the WHEDA.
"It was a good development, but the tax credits that we get every year only go so far and so it kind of just fell below the line," said Brian Schimming, WHEDA chief operating officer.
But additional tax credits were made available through the recently approved federal budgets, giving WHEDA 12.5 percent more to allocate.
Over a 10-year period, $13.4 million in tax credits will be awarded to The Grove over a ten-year-period.
"For seniors, veterans, for people with special needs, projects like The Grove are going to be ones that they can take advantage of and as a result the community, the state, the neighborhood, is going to be a lot better," said Schimming.
Two years ago, WHEDA also helped fund a low-income housing complex down the street from the future location of The Grove, called the Pinney Lane Apartments.
"It's probably around 2,000 households a year that are coming into Madison that are eligible and need that type of housing," said David Porterfield, the real estate developer at Pinney Lane. "We're talking about working people that have retail jobs and jobs providing services to people, et cetera. So it's really neighbors, people that you know in your everyday life that really can't afford to pay what it's costing in Madison."
He said historically low vacancy rates are causing landlords to raise rent, pushing many who can't afford the increase to leave the city.
"It's not just a housing problem, it's an economic development problem as well," Porterfield said.
City officials recognize the problem and set a goal to create 1,000 affordable units in the next five years. The city of Madison is contributing $3 million of Affordable Housing Fund resources to The Grove development.
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