The economic downturn is taking a toll on some of the
people who need resources and housing the most. Funds and
investors are taking to the sidelines, and special-needs
projects are being put on hold, in some cases for an
unknown amount of time.
definitely harder to move public supportive-housing deals
along in some parts of the country,” says
Michelle Hoereth, associate director at the Corporation for
Supportive Housing (CSH), a nonprofit organization helping
to end homelessness.
easier in places with coordinated financing systems and
where real estate values are
holding—such as New Jersey and
New York City. It's even easier
where the development of supportive housing
doesn't rely on the low-income
housing tax credit (LIHTC), for example in New
But in other parts of the nation, special-needs projects
have been hit hard.
very hard in tough real estate markets like Michigan, Ohio,
Indiana, and so many more markets, as
it's hard to attract
investors,” Hoereth says.
“Things are much slower in the
Midwest right now because of the tax credit
Projects on the West Coast, while they are showing signs
of picking up, are not at the development or financing
rates they used to have. “In
California, things have slowed down a bit because of the
fact that the state couldn't
sell bonds for months due to its inability to come up with
a budget,” Hoereth explains.
“This now seems like
it's resolved, but
they're still in the process of
selling bonds to work through a backlog of capital
projects. Advocates are pushing for housing to be
And in the Northeast, which usually is somewhat immune
to financial downturns, projects are feeling the smoldering
of the economic crisis.
“In New England, in both
Connecticut and Rhode Island, key funding programs were cut
at the state level, and problems have been exacerbated by
difficulties securing LIHTC investors there as
well,” says Hoereth.
“Though our sense is that the
situation's not quite so bad as
in the Midwest. Overall, there seems to
be a lot of optimism about the new stimulus funds
Detroit deal pushes forward
An unlikely market where CSH is making strides is
Detroit. Although with some hitches, the
company's Piquette Square
project is moving forward with construction of a
multi-purpose development that will have 150 single-room
occupancy (SRO) units for the
area's chronically homeless
veterans, who make up 4,000 of the
city's 18,000 homeless
population, and 5,000 square feet of retail space.
All units are at or less than 30 percent of the area
median income and can utilize Sec. 8 vouchers.
On top of environmental site issues, with the
development sitting on a former Studebaker factory, Lindsey
Bishop, program manager in
CSH's Michigan office, says
financing had to be an innovative process.
“It was not easy because we
had to get many sources of financing, and it was a 4
percent tax credit deal.”
CSH staff worked with the Michigan State Housing
Development Authority (MSHDA), Great Lakes Capital Fund,
and Southwest Housing Solutions, to name a few, to get this
project up and running.
“MSHDA gave a really great
interest rate and were the ones who really brought the
project forward,” says Bishop.
CSH partnered with developer Southwest Housing
Solutions, a managing and development firm. Together they
are working to accomplish Moving Forward Together, a
10-year plan to end homelessness in Detroit.
Southwest Counseling Solutions, Southwest
Housing's sister organization;
Veterans Affairs; Michigan Veterans Foundation; Focus;
HOPE; Jewish Vocational Services, Salvation Army; Michigan
Department of Labor and Economic Growth; and many more have
signed on to be service providers for Piquette Square,
which will sit a quarter mile from
Detroit's Veterans Center.
Upon completion, Piquette Square will be
supportive-housing project. That is, until
project—a 155-unit SRO
development for chronically
homeless—gets off the ground.
The sponsor is Neighborhood Service Organization, which
plans on utilizing the bottom two levels of the development
as headquarter space, giving residents on-site
“The syndicator of the
project has not yet been finalized,”
Bishop says, “but it will be a 9
percent deal, and we are hoping to have notification of
funding by late summer.”