A "Blessing" at Broadway & Walnut
It's tight times all around. Even for housing developers.
A couple of years ago, of course, it was a very different story. Anyone and everyone with money to invest looked first to the housing sector. Developers of low income housing almost didn't even have to get up out of their chair to sell the Federal tax credits to raise the capital to move a project forward.
Not anymore. With foreclosures up, home prices down and the mortgage markets in turmoil, investors are putting their money in oil, in gold, in anything but housing.
The result? With investors on the sidelines, across the country plans to develop new housing are on hold. And that includes, HUD estimates, some 1,000 projects scheduled to be finance by capital raised through the Low Income Housing Tax Credit and that are expected to provide nearly 150,000 units of new affordable housing for low-income families.
Like a project planned by Spokane Urban Ministries, an organization formed in 2005 by Salem Lutheran Church, All Saints Lutheran Church and Grace Lutheran Church. It owned a parcel at the corner of Broadway Avenue and Walnut Street in Spokane's West Central neighborhood and hoped to replace 14 existing units with the 47-unit, Walnut Corners complex. It would be a "real blessing," the Reverend Ted Soeldner of Salem told The Spokane Spokesman Review, "to the community and to the folks we're serving."
After Spokane Urban Ministries got the good news from the Washington Housing Finance Commission that it would receive tax credits, the group’s president Reverend James Kashork, said, it received "promising offers" from investors. But then, he added, "the market kind of sank" and the "offers weren't feasible." The project, in other words, was in trouble.
Fortunately, the Washington Housing Trust Fund stepped in with a bridge loan, allowing the project to continue. But, Reverend Kashork added, "we'll have to pay that off one way or the other."
That "one way or the other" has come just in time under the American Recovery and Reinvestment Act passed by the Congress and signed by President Obama earlier this year. One very important component of the Act is, for short, called TCAP - the Tax Credit Assistance Program. Under the Act, some $2.25 billion was provided nationwide to "jump start" the 1,000 Low Income Tax Credit housing developments that have been stalled by the economic downturn and the flight of investment capital away from housing.
Thanks to the Washington State Housing Finance Commission, Walnut Corners is one of the projects- along with similar projects in Seattle, Yakima, Renton, Centralia, Graham and Toppenish - to receive part of the $46.3 million in TCAP funds. Indeed, news of the Commission's decision was one more very good reason to celebrate when, on July 30th, Spokane Urban Ministries held its grand opening ceremony for Walnut Corners.
But maybe the very best reason to celebrate on July 30th was the additional 47 units of affordable housing Walnut Corners will provide. The demand for affordable housing in Spokane, Reverend Kashork told KXLY-TV on opening day, "is incredibly high." Walnut Corners "begins to put a dent in the need."
|Content Archived: August 16, 2011|