Affordable housing project in Appleton could benefit from $1 million in federal funds

Duke Behnke, Appleton Post-Crescent
·3 min read
An affordable housing complex called Rise Apartments is planned for the 300 and 400 blocks of North Oneida Street in Appleton. The development would infill around existing buildings.
An affordable housing complex called Rise Apartments is planned for the 300 and 400 blocks of North Oneida Street in Appleton. The development would infill around existing buildings.

APPLETON - City planners have recommended awarding $1 million in federal assistance to Rise Apartments, a prospective affordable housing development on North Oneida Street, to keep the project financially afloat.

Appleton set aside $3 million from the American Rescue Plan Act (ARPA) for affordable housing. If the award is approved by the Common Council, the city would have $2 million remaining.

The city previously signed an amended development agreement with MF Housing Partners that would provide up to $649,000, plus interest, in public assistance for Rise Apartments through Tax Incremental Financing District 11. The ARPA grant would be in additional to that.

The $13.9 million development would be built in the 300 and 400 blocks of North Oneida. It would consist of 48 units, 43 of which would have restricted rents for low-income residents.

The project would capitalize on tax credits issued through the Wisconsin Housing and Economic Development Authority (WHEDA). According to the development agreement, construction is scheduled to begin this spring and be completed in spring 2024.

Kara Homan, Appleton's director of community and economic development, said inflation has driven up costs since the project first came before the council in November 2021.

"Construction costs, not just for the city but for developers, have been escalating quite a bit," she said. "This ($1 million grant), in tandem with some potential county ARPA funding and WHEDA tax credits, will make the project cash flow."

More: Appleton traffic engineers propose converting College Avenue from four lanes to three

More: Appleton provides nearly $300,000 to Pillars to assist people who experience homelessness

Council member Sheri Hartzheim expressed reservation with the $1 million grant. She said inflationary pressures aren't unique to Rise Apartments, noting the city has had to scale back the renovation and expansion of the public library in attempt to bring it within budget.

"I'm curious as to whether the project can be scaled back, rather than using this million dollars to supplement a project we already believed was conceptually ready to go," Hartzheim said.

Developer Tom Klister said ARPA funding is about the only thing keeping affordable housing projects viable in the state and country.

With market-rate apartments, rents can be raised to cover higher construction costs. That's not the case with affordable housing, he said.

"Rents are all capped, so there's got to be something that changes to make these projects still get built," Klister said. "Without the ARPA dollars, this project will not go forward."

Last week council members approved $745,000 in public assistance for the redevelopment of the Chase Bank building into market-rate apartments. At the time, they called upon the city to bring forth more affordable housing.

Council member Denise Fenton said ARPA funds were designed to overcome extraordinary circumstances like those that the developer is facing.

"It's a rescue plan act," Fenton said. "We've got an opportunity to use these funds to rescue a project that is going to give us over 40 affordable housing units."

Contact Duke Behnke at 920-993-7176 or dbehnke@gannett.com. Follow him on Twitter at @DukeBehnke.

SUPPORT LOCAL JOURNALISM: Our subscribers make this coverage possible. Click to see The Post-Crescent's special offers at postcrescent.com/subscribe and download our app on the App Store or Google Play.

This article originally appeared on Appleton Post-Crescent: Appleton considers awarding $1 million to affordable housing project