Wausau is about to lose affordable housing
Wausau is about to lose affordable housing
Wausau East High apartments will become market rate in 2024
Jim Smith received a letter that he found startling. In the near future, there’s a good chance he and other residents of Wausau’s East High Apartment Complex won’t be able to afford where they’re living.
(The Wausonian changed the name of the subject in the story at his request to prevent against potential retaliation.)
Smith received a letter back in April, recently forwarded to The Wausonian, telling Smith and other residents in his situation that in three years their rent will increase substantially.
Smith and some other residents in the East High Apartment Complex pay a reduced rent as part of a program meant to ensure affordable housing. Residents must earn less than the median income for Marathon County in order to live there, in exchange for a reduced rent. Builders of the apartments got tax credits toward renovating the old high school into an apartment complex, in exchange for maintaining them as affordable units for a certain number of years.
That’s about to end, according to the letter, and rent will increase to market rate for all apartments in East High. That means Wausau could be about to lose an important source of low-income housing; about 10% of its stock under the LIHTC program.
Can they?
According to the Local Support Initiatives Corporation, tax credits that help make rehabilitation of old buildings such as the Old Wausau East building on Fulton Street affordable. In exchange, the affordable housing element is supposed to be maintained for 30 years.
The East High Apartments were revamped and open in 2005, and the 2024 date given would be 19 years — not long enough for the 30-year credit. Those credits must be used in projects in qualified census tracts, which East High resides in.
I reached out to Tammy Stratz in Wausau’s Community Development Department. Stratz is probably the person most versed in HUD rules. I asked her if I’d gotten the right info — was it indeed 30 years?
Typically, yes, she informed me. Housing projects that receive LIHTC funds generally must maintain the affordable housing requirement for 30 years.
Now.
But back when Stone House Developers created the East High Apartments, HUD offered 15 and 30-year options. Stone House chose the 15 year option, which has since expired. They also, Stratz told me, got some funding in the form of a loan from the city, which they paid back already.
So legally, Stone House is within their rights to turn them into market rate housing, and in all fairness, 2024 is a pretty lengthy time.
What will residents do?
According to HUD online datasets, there are 1,184 such properties in Wisconsin that make use of Low Income Housing Tax Credits. Of those, there are 15 such properties in Wausau. Atrium Lofts is the newest one, and the Federal Lofts are another.
Of those properties, there are 430 total affordable housing units in the city, ranging from tax credits allocated in 1988 to 2016, for the Atrium Lofts. Removing East High would eliminate 46 of them according to HUD’s data sheet. That would leave 384 total units. The loss of those units amounts to a nearly 11% drop in the number of affordable housing units (at least those that are affordable because of the HUD program.
Those 46 of them made up the bulk of the 54 total units at East High Apartments. It is entirely possible some of the apartments have already become market rate. There are two market rate apartments available on the East High Apartment site right now, for instance. The letter might have been a courtesy for those residents who are still living there and don’t have plans to move.
Though the timeframe is quite a bit into the future, residents there will still have that rent increase hanging over their heads. And the move will remove about 10% of the LIHTC units from the city. The city hasn’t had a new one since the Atrium Lofts in 2016 — but The Landmark when fully renovated will have nothing but income restricted apartments. Project Manager Ted Matkom, of Gorman and Co., told city leaders there would be no market rate units in The Landmark. Just like those who make too little at East High will probably have to move, those making over the limit at The Landmark will need to move for the opposite reason.
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