Once the site of 77 units of substandard barracks-style public housing with swamp coolers, Madison Heights in Avondale, Ariz., has been transformed into a 143-unit development with modern amenities and services.
Developer Gorman & Co. teamed with the Housing Authority of Maricopa County to redevelop the site with help from the federal Rental Assistance Demonstration (RAD) program, which allows public housing authorities to convert their public housing units to project-based Sec. 8 contracts to provide properties with more stable and long-term funding.
Madison Heights is the first RAD development to be completed in Arizona as well as one of the first deals where there was a transfer of assistance. Subsidies from three dilapidated public housing sites were bundled and used on Madison Heights, the largest of the sites and closest to retail, schools, and transportation.
“Without RAD, it simply wouldn’t have been possible. The public housing units would be sitting in their former conditions,” says Brian Swanton, Arizona market president for Gorman & Co. “RAD took the handcuffs off the public housing authority and allowed it to enter into a public-private partnership.”
Completed at the end of 2016, the one- to four-bedroom units serve residents earning 60% of the area median income, with 30 units set aside for the chronically homeless.
The site has gained an array of amenities and services, including a 5,500-square-foot community center, a playground, a splash pad, a community garden, and exercise stations around a walking path. On-site services, such as job and computer training and financial literacy, also are offered.
Because the $30.4 million Madison Heights redevelopment was substantial, the development team created two phases and received separate reservations of 9% low-income housing tax credits. The two phases of the redevelopment were almost identical. Affordable Housing Partners, a Berkshire Hathaway company, purchased the housing tax credits. In addition to county and state financing, BMO Harris Bank provided the construction loan and Community Development Trust provided the permanent loan.
