A 32-unit supportive housing project in Grafton is among the first awarded tax credits from a unique state program that aims to spark community revitalization and promote resident well-being.
The Wisconsin Housing and Economic Development Authority announced this week that Woodside Prairie in Grafton and The Shield, a 44-unit project in Madison, would receive $800,000 in 9% federal housing tax credits.
The tax-credit awards come from WHEDA's new Innovation Housing Tax Credit program. WHEDA created the set-aside as part of its 2021-22 Qualified Allocation Plan for administering federal and state tax credits to help finance low-income housing projects.
Woodside Prairie is being developed by Rice Lake-based nonprofit
Impact Seven. It will contain 24 units set aside for autistic adults designed in six-unit cooperative style clusters.
The project is also receiving a Housing Trust Fund award of roughly $388,000.
The Shield, meanwhile, is a mix of 44 studio and one-bedroom units. It is being developed by the Salvation Army. Most units will be for residents with special needs, including 11 units for those experiencing homelessness and 22 for survivors with domestic violence.
The two tax-credit awards are expected to generate $14 million in equity for the two projects, according to WHEDA.
Seven projects applied for $5.4 million worth of tax credits in WHEDA's innovation round. Projects included the 34-unit Independence Village in Grafton and the 25-unit 52nd Street Commons in Kenosha, according to WHEDA data.
“Housing tax credits are a vital resource in financing affordable housing and our 2021 innovation round demonstrates WHEDA’s continued commitment to drive housing and economic opportunity,” WHEDA chief executive Joaquín Altoro said in a statement. “Wisconsin’s housing needs continue to evolve, and we are seeing a greater need for supportive housing solutions. Through this innovation round we can have a lasting impact on resident well-being and housing security.”
WHEDA has been the sole administrator for federal affordable housing tax credits in Wisconsin since the program began in 1986 and since the state program began in 2018. The programs provide incentives through the IRS and Wisconsin tax code that encourage developers to create affordable housing.
In exchange for receiving the tax credits, developers agree to reserve all or a portion of their housing units for low- and moderate-income households for at least 30 years. Any remaining units are rented at market rates.
The developers sell the tax credits to private investors to obtain funding. Once the housing project is available to tenants, investors can claim the tax credit as a dollar-for-dollar reduction of federal or Wisconsin income taxes owed over a 10-year period.
