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Funding sources for affordable housing projects especially have been dropping like flies.
That created huge problems for projects like Cedar Gateway, a 65-unit affordable housing complex at 6th Avenue and Cedar Street downtown.
It was supposed to break ground on March 9. But by the end of 2008, the project had completely stalled because of financing trouble.
But now the federal government is injecting stimulus money into the mix, reviving the project. The Department of Housing and Urban Development announced yesterday the infusion of $14 million, which replaces money that the developers had lost from tax credit financing, a common funding source for affordable developments.
The federal infusion becomes by far the largest of eight funding sources for the $33-million project, followed by $10.2 million from the Centre City Development Corp.
The project’s developers are Squier Properties and ROEM Corp.
Twenty-three of the project’s 65 units are dedicated for supportive housing — one-bedroom, one-bathroom apartments for mentally ill, homeless or at risk of becoming homeless individuals, where they’ll be matched with case-workers, medical support and other supportive services. These are the kind of units identified in the regional Plan to End Chronic Homelessness.
Tom Scott, executive director of the San Diego Housing Federation, a local affordable housing group, said those units make projects “very difficult to finance, so this is a coup on many levels.”
The other 42 units will be affordable family units with two or three bedrooms, targeted at low-income families.
Here’s a bit from HUD’s announcement about the kind of financing that the federal money replaces:
One of the by-products of this crisis has been the freezing of investments in the low income housing tax credit (LIHTC) market. The tax credits create an incentive for investors to provide capital to developers to build multi-family rental housing for moderate- and low-income families across the nation. Since the contraction of the credit market, and as traditional investors remain on the sidelines, the value of tax credits has plummeted. Consequently, as many as 1,000 projects (containing nearly 150,000 units of housing) are stalled across the country.
Now the project should break ground in October or November, said Gary Squier, the developer’s founder. Other pieces of the project include a rooftop garden, ground floor retail space, the preservation of the adjacent historical chapel and three levels of parking, according to a project fact sheet.