How Monroe County plans to use federal aid for affordable housing in Bloomington

Monroe County officials plan to spend $3.5 million in COVID relief dollars to prepare some land for a residential development with up to 50 single family homes.

County Attorney Jeff Cockerill said the project is in its preliminary stages, and many questions, including the development’s location, have yet to be answered.

County commissioners and the county council designated Cockerill as the project’s point person.

“I think they want it as soon as possible,” he said.

The county redevelopment commission is expected to discuss the matter at its 4:30 p.m. Wednesday meeting.

Cockerill said he has identified three or four potential sites but was not yet ready to talk about them. Ideally, the property would be within or near city limits to enable residents to use public transportation. A possible — though unlikely — location could be part of the old RCA/Thomson site that county officials are considering for the new justice complex.

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The COVID relief dollars, part of the American Rescue Plan Act, would fund purchase of the property and the infrastructure such as road, water and sewer, Cockerill said. County officials envision the redevelopment commission will establish a special taxing district that would allow property taxes collected from developments on the property to help prospective homeowners through down payment assistance.

Cockerill said the county expects the 15- to 20-acre site to hold 40 to 50 homes, with lot sizes of no more than 0.25 acres.

The homes would be available only for people who earn between 60% and 80% of the area median income, though details would still have to be worked out. For a family of three in 2023, that income limit is $65,050, according to the U.S. Department of Housing and Urban Development. That would mean people who would be eligible to move into the neighborhood would have to earn less than that amount.

At that income, the monthly mortgage payment would have to remain below $1,626 for the owner not to be considered “burdened.” At current interest rates, that puts the loan amount near $220,000.

Cockerill said if a location can be identified within the next month and the planning process with the appropriate local agency begins, the county could break ground by the end of next year. The first home could then be completed as early as fall of 2025, though he said that timeline was probably optimistic.

Rising housing and rent prices in Monroe County have increasingly priced out local workers, with large employers and governments reporting that sizable portions of their employees live outside of the county. The rising prices have led to contentious discussions about housing density.

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The value of all residential property in Monroe County rose nearly 11.5% last year and 15.2% the prior year. The value can rise because of increasing sales prices, owners adding to their homes or additional homes being built.

Boris Ladwig can be reached at bladwig@heraldt.com.

This article originally appeared on The Herald-Times: Monroe County plans to use $3.5M in ARPA funds for affordable housing