News Detail

MaineHousing reduces affordable housing project costs

Release Date: May 07, 2013
Six Low Income Housing Tax Credit Program projects to build, rehabilitate 325 units

For Immediate Release

Contact:     Deborah Turcotte
MaineHousing Public Information Manager
(w) 626-4617 or (c) 242-1904

The cost of developing or rehabilitating affordable housing units in Maine is being reduced by 36 percent and resulting in 148 more units being assisted compared to last year because of a year-long effort by MaineHousing’s Board of Commissioners and staff, in partnership with Maine’s development community, to place incentives on lowering costs.

Six affordable housing projects will receive a share of $2.9 million in federal Low Income Housing Tax Credits (LIHTC) which help leverage approximately $25 million in private investment into Maine. The projects are in Lewiston, South Portland, Portland, Saco and Biddeford.

Combined, the development projects total nearly $43 million.

For more than a year, MaineHousing’s Board of Commissioners, staff and representatives from the development community evaluated and re-wrote what’s called the Qualified Allocation Plan, a federally required competitive scoring system in which development projects receive points for meeting cost and construction criteria. The highest scoring projects each receive a portion of the Low Income Housing Tax Credits.

A key element of the new QAP is the awarding of points to developers who bring down costs and assist in the construction or rehabilitation of more housing units for Maine’s lower income households.

“Developers chase points because they want the Low Income Housing Tax Credits,” said Peter Anastos, Chairman of MaineHousing’s Board of Directors. “It made sense that this year we give the incentive of additional points to developers who reduced the total development cost per unit. And it worked.”

Interest in the LIHTC program was high. MaineHousing received 19 applications to build or rehabilitate 870 units with a total request of $9.8 million in low income housing tax credits. That exceeded the available amount of credits by $7.2 million.

Last month, it was announced that 18 of the 19 projects vying for the LIHTC’s had reduced total development costs by approximately 25 percent. (One project was dismissed due to an incomplete application.) Now that they’ve been scored, the six winning projects will result in a 36 percent reduction over last year’s costs plus 148 more units  will be built or rehabilitated compared to last year – 325 compared to 177.

The average Total Development Cost of the six projects is $132,256 per unit, which is a decrease of $73,895 per unit. Last year’s average was $206,151/unit for a total of 177 units.

MaineHousing Director John Gallagher said that MaineHousing’s Board of Commissioners and staff are committed to refining and reducing the cost of taxpayer-funded affordable housing as part of their mission to help more Maine families find homes, especially as funds from Washington, D.C. are expected to shrink over time.

This year’s selected projects will rehabilitate 184 affordable housing units, and create 130 new affordable housing and 11 market-rate rental units. The projects are:

 

  • Oak Park Apartments: An existing 91-unit Section 8 affordable housing project for seniors in Lewiston will be rehabilitated to improve its energy performance plus capital improvements.  Total Development Cost = $101,999/unit. Property owner is Barkin Companies.
  • Osprey Circle: A 48-unit new construction project for seniors in South Portland. The proposal is to construct two three-story buildings that will include 24 units each with rents at or below 60 percent of the area’s median income. Total Development Cost = $148,748/unit. Developer is Developers Collaborative.
  • Cumberland Ave Apartments: A 57-unit new construction project for families in Portland.  Forty-six units will be for lower income families and 11 units will be market rate rentals. Total Development Cost = $178,553/unit. Developer is Avesta Housing.
  • Riverview Apartments: An existing 61-unit apartment complex for families in Saco will be rehabilitated to replace windows, siding, paving, landscaping and other maintenance repairs. Units are rent restricted or market rate, and complex also has 6,000 square feet of commercial office space. Total Development Cost = $98,507/unit. Developer is Bateman Partners.
  • Golden Village/Park Village/Maple Grove: Three existing Section 8 projects consisting of 32 total affordable housing units for seniors in Saco and Biddeford.  Total Development Cost = $101,588/unit. Developer is Avesta Housing.
  • Boiler House Lofts: A 36-unit adaptive re-use of an historic mill project for families in Saco. The complex is located within the Saco Island Historic District.  All renovations will be done in accordance with the requirements of Maine Historic Preservation Coalition and the National Park Service to ensure the property will qualify for state and federal historic tax credits. Total Development Cost = $197,889/unit. Developer is Bateman Partners.

 

 

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The mission of MaineHousing is to assist Maine people to obtain and maintain decent, safe, affordable housing and services suitable to their unique housing needs. Please visit our Web site at www.mainehousing.org.

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