Coming Together to Grow, October 2018 Project Update
02 July 2018
Coming Together to Grow
Lisa Hurley, CEcD, Executive Director
I wanted to provide an update on the duplex project that YCDC announced back in April. Since then, Prairie Fire Development Group has been working with the City of York on the design of the neighborhood, and they are now going through the final platting process with the Planning Commission and the City Council. The desire is that the company is able to break ground in early August 2018. The neighborhood, Vistas at Meadow Grove, will consist of 24, 3-bedroom 2-bath duplexes with 1 car garage (48 rental units), a club-house and playground equipment north of East 19th Street in York, Nebraska. This is an $8.2 million investment in York County meeting an identified need.
YCDC staff and board members have heard feedback that this is a low-income project, and that some are concerned about the type of people who will live in this development, and I wanted to address those concerns. First of all, this project is a private development funded with private equity and debt, it is not owned or operated by HUD which is a completely different type of development and financing Secondly, tax credit developments have many more background checks and maintenance requirements than would be imposed on a typical “market rate” or for sale development. All prospective tenants are required to have a full background check including income and employment verification as well as a comprehensive criminal background check, felons cannot live in these developments. The owner and developer are contracting with a property management company that specializes in tax credit developments based out of Omaha. They will have an onsite property manager that will office in the clubhouse as well as maintenance staff. As with all developments in York, the development must comply with all the City’s codes and ordinances in addition to the added lease requirements set forth by the investment company, NIFA, the partners and the management company. Tenants that do not comply with their lease requirements are able to be evicted. This includes but is certainly not limited to parking in the lawns.
The development is focused on the need for more workforce housing and is income-restricted. What does that mean? Prospective tenants cannot earn more than a certain threshold of annual income, based on the number of people who will be named on the lease and live in the household. The rents do not fluctuate based on a tenant’s income, the rents are set by the developer as part of their development plan to investors and the state. However, all tenant households must prove that they have enough income on a monthly basis to be able to pay their rent. As a private development, the property management company has the right to evict non-paying tenants. Further, only the tenants that have passed the background checks and are named on the lease can live in the units, otherwise you would be evicted. What type of people could live here? Anyone could live here, chances are a family member or friend you are close to would qualify to live here! Young families just starting out and need an affordable place to live to allow them to save money to buy a home, to empty nesters looking to down-size and live a home doesn’t have constant maintenance needs, to elderly who need a single-story home with low threshold entrances accessibility clearances. The people that qualify to live in this community are the same people that make our community dynamic, that contribute to the workforce and economy that allow it to prosper and grow.
Just yesterday, I met with corporate leaders for one of our local companies, and they said they were having a hard time recruiting young talent, because of lack of quality and affordable rental housing. Someone starting out at $13 or $15 an hour would income qualify for this program. Our average hourly wage in York County is just under $18 per hour, so a good portion of our community would income qualify for this development. Rental housing is an identified need in the County. Most recently through the Marketing Hometown America process in 2017. Prior to that, in 2016, a County-wide housing study showed York County housing needing 588 housing units by 2025, with ½ or 294 units needing to be rental units. In addition, both residents and the business community have told YCDC housing is a need. Concern is apparent within the business community County-wide, particularly among larger employers, about the lack of affordable housing for employees, with companies reporting the shortage as being problematic in hiring and retaining entry-and mid-level workers This will take a dent out of a specific income bracket, while we continue to work with partners to encourage other development and renovation.
Federal Low-Income Housing Tax Credits (LIHTC) is a dollar-for-dollar credit against the federal and state income tax liability of the owner (investor) of an affordable housing development. The developer will syndicate the tax credits through investment banks who will sell the credits to private corporations or investment funds. LIHTCs that are allocated to a development are claimed in equal amounts for a 10-year period on the federal level and six years at the state level. The rental property generating the LIHTC must remain in compliance with the strict program guidelines and rent restriction requirements for a period of not less than 45 years from the first taxable year of the LIHTC credit period.
LIHTC programs require very strict maintenance and reporting requirements. The annual budget includes capital reserve accounts to make sure the property and buildings are consistently maintained. Prairie Fire Development has been in discussions with a number of local and regional contractors and vendors about providing the workforce and material for the construction of the project.
As these projects continue forward, YCDC does remain focused on business retention, expansion, development and recruitment. We are here for anyone that has a question or has an idea. Please call the office at 402.362.3333 with any questions.