When a years-in-the-making public/private partnership was greenlit by the City of Boise in mid-2017, affordable housing advocates breathed a collective sigh. The plan was for local developers to begin construction on Adare Manor, a 134-unit apartment complex on a parcel of city-owned land on Fairview Avenue between 24th and 25th streets. The plan has always been for the rent on lion’s share of the units to be “affordable.”
Affordable, according to Boise City Hall, breaks down into several tiers. For example, a person making $13,550 per year would be in the the “extremely low” category, so affordable rent would be about $339 per month. In the “very low” category would be people with an annual income of $22,550, who might consider $564 per month an affordable rent. In the “low” category, rent might be $901 per month based on a $33,050 annual salary, and someone in the “workforce” category might make $54,012 per year and pay $1,350 per month. With an increasing number of apartment units under construction or planned for the downtown area, some developers aren’t paying much attention to what’s developing. Instead, they’re looking at “market rates.” With the low inventory of available units pushing monthly rentals to $1,100, $1,200 and $1,300 per month, why would a developer want to build affordable housing?
“We believe a project like this can be done and should be done,” said Tom Mannschreck, CEO of Thomas Development, the developers of Adare Manor. “That said, we’ve been working on this for more than two years and, you bet, it’s challenging.”
Things got a lot more challenging in December 2017, when a GOP-led Congress passed a massive federal tax overhaul which was signed into law by President Donald Trump.
As a result, corporate tax rates were lowered, and the face-value of federal affordable housing tax credits also dropped. Michael Novogradac, managing partner with national accounting firm Novogradac & Company, didn’t pull any punches when he told The New York Times the change would be, “the greatest shock to the affordable-housing system since the Great Recession.”
True though that may be, city officials are still moving ahead on Adare.
“In spite of little help at the federal or state level, we’re doing our absolute best to make Adare Manor happen,” said Diana Lachiondo, director of Community Partnerships for the City of Boise. “I can tell you we’re meeting on the future of that project as we speak. And all of the partners are trying to get creative.”
The City of Boise got creative by crafting a deal in which the city-owned land where Adare Manor will be built will be leased for no more than $1 per year. Additionally, the city is prepared to waive impact fees up to $50,000 and will provide program funds of up to $2,000 per unit of affordable housing apartments. For its part, the Idaho Housing and Finance Association facilitated nearly $18 million in tax-exempt bonds and funded $1.2 million from the HOME Investment Partnership Program to the project.
“We’re very excited about the possibility of a new, affordable housing development downtown,” said IHFA spokeswoman Katrina Thompson. “We’re looking forward to partnering with the city and the developer to make this happen.”
Back at Boise City Hall, Lachiondo said she’s doing her best to remain positive.
“What can I say? I’m an optimist. It will take a lot of hard work, but I believe this is going to happen somehow,” she said.
The office of Boise Mayor Dave Bieter is also doing whatever possible to salvage the Adare Manor proposal.
“Unfortunately, we’re not getting too many tools at the state or federal level lately. This is a really challenging thing,” said Bieter spokesman Mike Journee.
At the Idaho Statehouse, House Minority Leader Matt Erpelding (D-Boise) chastised his fellow lawmakers. In an op-ed published this month in Boise Weekly, Erpelding wrote legislators had “turned their backs on the working people of Idaho” and the legislature was long overdue in replenishing the Idaho Housing Trust Fund, which has remained at a zero balance for 25 years.
“Passing legislation without funding is a classic political shell game,” wrote Erpelding.
Mannschreck isn’t waiting any longer, though. He said if everything pencils out (and he’s optimistic it will), he’ll be able to break ground on Adare Manor as early as late February and could open the 134-unit apartment building in 14 or 15 months.
“In the affordable housing business, it’s a lot like Cinderella facing a clock that’s about to strike midnight,” Mannschreck said. “But this isn’t any fairy tale. Affordable housing absolutely must come to Boise. We’re about to prove that it still can.”