WFHB Bloomington Community Radio
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The Bloomington City Council approved a 10-year tax break for an affordable housing development, during their session last week.
Under the agreement, the developers would get a 98 percent tax break for ten years.
Southern Knoll, a 31-unit affordable apartment complex, will be located on West Third Street, across from Rose Hill Cemetery. Southern Knoll is to provide one-, two- and three-bedroom units to tenants whose income is 80 percent or less of the area’s median income; under $35,000 per household, according to the Bureau of Labor Statistics.
Assistant Director for Economic Sustainability Brian Payne, first presented the proposed agreement in the City Council’s June 7 meeting. Payne says over two thirds of renters in Bloomington spend nearly a third of their income on housing.
Payne also said developer Milestone Ventures‘ affordable housing project proposal would need a 10-year tax break to successfully vie for federal, low-income housing tax credits. Payne said Low Income Housing Tax Credits are highly competitive.
Payne pressed this point again, in last week’s city council meeting, saying Milestone Ventures had to secure community backing for the project, prior to the fast approaching federal deadline.
Per its agreement with the city, Milestone Ventures will provide affordable apartments in Bloomington for the next 99 years.
Within the first 15 years, all of the units will be designated as affordable. But the number of affordable units decreases over the remaining years of the agreement, as they return to market rate.
Bloomington City Council member Jim Sims noted that, at the 30 year mark, the developer has a free hand in designating which units would be affordable. Sims expressed concern that, if the developer increasingly limited affordable units to studios or one-bedroom units, low-income families would be left out.
Payne acknowledged that under the agreement, the developer could legally restrict affordable units in that way.
Bloomington City Council member Dave Rollo agreed with Jim Sims’ concern. Rollo proposed an amendment to the affordable housing agreement which would have the developer offer at least two, 2-bedroom or 3-bedroom units as affordable housing for the last 68 years of the agreement. He and Council member Steve Volan estimated the amendment would have only a modest financial impact on the developer
Some council members did not see Sims and Rollo’s concern as a priority. Given the opportunity to comment, Council member Susan Sandberg stressed repeatedly, “the time is now.” Council member Chris Sturbaum also supported moving forward, without amending the agreement.
The council temporarily postponed any further action to give Assistant Director for Economic Sustainability Brian Payne a chance to reach out to Milestone Ventures on the proposed changes. The developer ultimately agreed to the changes over the phone with Payne, and the Council approved the amended agreement with the 10-year tax abatement.
Council Member Sims acknowledged the project’s positives far outweigh any negatives: 14 of the apartments are to be set aside for homeless and disabled persons during the development’s first 15 years. Shalom Community Center and LIFEDesigns will provide support services for those individuals, under the contract.
