Towns in rural Illinois are welcoming efforts to relieve housing pressures that have led to overcrowded, substandard housing and long commutes for workers in area factories and agribusinesses.

The 42 units at the new Pine View Apartments in rural Carmi along the state’s eastern border impressed the locals so much that households earning more than $100,000 a year were trying to get into the affordable duplexes.

The town of Carmi wanted the Pine View development. Community leaders asked developers to come into their town because there was a shortage of workforce housing, said Josie Kotsioris, manager of the tax credit program at the Illinois Housing Development Authority (IHDA). “Some of their workers were living in hotels far away, and some were living in trailers.”

Carmi is not unique. In central Illinois, developer Don Harris paid $150,000 for five acres in Beardstown, where he built some much-needed affordable housing.

That project, Welch Woods, was so successful that other small towns in the area begged him to build in their communities.

They “are practically giving us land so we can build affordable housing there,” said Harris, director of housing development at Illinois Community Action Development Corp. He noted that he now has more than 30 acres under his site control for which he paid a total of less than $130,000.

“It’s very important to recognize that live-near-work issues are just as important in rural areas as they are in suburban areas,” said Kotsioris.

The $5.1 million development cost for Welch Woods was financed by IHDA’s $1.3 million Federal Home Investment Partnership loan (which carries a 1% interest rate for 20 years), $750,000 from the Illinois Affordable Housing Trust Fund and about $3 million in low-income housing tax credit (LIHTC) equity from Enterprise. Additional funding included $25,000 from a local meat packing firm that was having trouble finding local affordable housing for its employees.

Welch Woods features 42 units, all of them with two or three bedrooms. Designed for families, the two-bedroom units have 1,000 square feet; the three-bedrooms are 1,200 square feet. The units include central air, dishwashers and hookups for washers and dryers. The three-bedroom units have one-and-a-half bathrooms.

Harris said housing for all tenant groups is so scarce that practically any new affordable housing will lease up. At Welch Woods, “30% of my units are leased to seniors,” he said. “It was amazing to me to see seniors, singles and couples wanting to rent there.”

At press time, all of the units were occupied, and there was a 25-person waiting list. Half of the units are reserved for households at or below 60% of the area median income (AMI), and the other half are reserved for households at or below 50% of AMI. Rents for the two- and three-bedroom units range from $295 to $465.


Carmi’s Pine View Apartments was developed by the Laborers’ Home Development Corp. (LHDC). The project’s 221 duplexes leased up five months ahead of time because of pent-up demand. One-bedroom units rent for $251, two-bedrooms for $327 and three-bedrooms for $395.

Nine of the units are reserved for households at or below 40% of AMI, 13 units are reserved for households at or below 50% of AMI, and 20 units are reserved for households at or below 60% of AMI.

Financing for the $5.3 million development included a $2.3 million HOME loan (at 1% interest for 20 years), and about $2.8 million in equity from the sale of LIHTCs to The Richman Group Affordable Housing Corp. and the Illinois Equity Fund.

Neither Pine View nor Welch Woods needed a separate construction loan. Both projects, completed in mid-2005, used IHDA’s combined construction and permanent loan program with HOME funds and early pay-in of tax credit equity. “On tax credit deals, the syndicator bridges in the equity so it is available for construction,” said Kotsioris.

Local mayoral support helped bring LHDC into its communities, according to Michael Goetz, the group’s executive director. One mayor contacted his group after driving past an LHDC development in another town; he wanted to find out how he could “get one of these” in his community, Goetz said. Another mayor told his local landlords they needed to improve their properties to make them look as good as the LHDC housing.

Despite the help from IHDA and the willingness of mayors and even local companies to support affordable development in their small towns, rural development remains a challenge. “Most small towns don’t have the absorption [patterns] of urban areas,” noted Harris.

“Whenever you build in a rural area, where new housing is scarce, you should be prepared to build a mixed-income deal, because there should be sufficient demand for everything you build there.”

Rural developments also need to be relatively small. Goetz said development size should be no more than 40 or 50 units; he did one with only 24 units. That makes cash flow a continuing problem. “You still have to have a site manager and a maintenance guy,” Goetz said. He suggests using part-time workers and sharing site managers and maintenance staff among a developer’s sites.