With Council Approval, Developer Plans Another Shot at Funding for Brooklyn Center’s Wangstad Commons
[Originally Published on Hometown Source, Written By Kevin Miller: View Source]
The Brooklyn Center City Council extended the preliminary development agreement with the developer proposing to construct the Wangstad Commons housing development on March 28.
The four-story, 54 unit, $22.5 million development is proposed for city-owned land at Brooklyn Boulevard and 61st Avenue, adjacent to The Sanctuary assisted living center.
With the timeline extension, developer JO Companies plans to modify its existing proposal, adding additional units for people with disabilities and individuals experiencing homelessness, as well as four-bedroom units.
Previous plans for the project included, one, two and three-bedroom units, but not four-bedroom.
Funding for the project partly relies on the developer receiving low-income housing tax credits from the Minnesota Housing Finance Agency. These credits are awarded to affordable housing projects on a competitive basis, with only the highest scoring projects receiving funding.
“Adding that mix (with four-bedroom units) to multi-family can be done,” said Jonny Opara, president of JO Companies. “It’s expensive but if it’s done the right way, it definitely increases your competitiveness.”
The project was not awarded these tax credits in the previous funding cycle, and as a result, the developer is adjusting the proposal in hopes of a higher score.
It is not uncommon for a developer to make multiple application attempts to receive these high-demand tax credits.
“We feel pretty confident with the changes that we’ve made in order to be in a position to receive an allocation this fall,” Opara said.
This represents the second time the developer has modified the proposal to make it more appealing to the Minnesota Housing Finance Agency. Initially, the development was proposed at 88 units, but was scaled back to better match projects that are typically funded by the agency.
The developer is also expected to request tax increment financing from the city to make the project financially viable.
“I think it’s very important that projects like this are highlighted and developed so individuals and families, multi-generational families, can have access to quality housing that is representative of my ideals,” Opara said. “Which is basically market-rate design but housing that’s affordable.”
Units are planned to be affordable for families with between 30% and 60% of area median income. Rents would fall between $750 per month to $1,600.
Councilmember Dan Ryan said he is concerned about the overall number of affordable apartment units being planned for development in the city.
“I’ve gotten a lot of concerns and skeptical response from residents about why are we building more affordable housing,” he said. “I’m trying to strike that balance between building enough affordable housing for the people who are here but not building so much affordable housing that we bring in even more low-income households.”
Opara said the larger units will be an attractive offering for families that may want to buy a home but are not able to afford it, or that do not have a high credit score.
“This to me looks like a transformative site,” Opara said.
Mayor Mike Elliott said that in many cases, a mortgage payment for a home would cost less than rent in a four-bedroom unit.
“The words ‘affordable housing’ are scary to a lot of people,” Elliott said. “The fear of affordable housing has in many communities become a proxy for race. When people say they don’t want affordable housing, the undertone and undertext is that they don’t want a certain group of people or race of people moving into their communities.”
Opara conceded that $1,600 for a four-bedroom unit is “eye-raising,” but said that costs for new construction are continuing to increase.
Councilmember Kris Lawrence-Anderson said the city needs to construct a balance of affordable, low-income and market-rate housing.