With Illinois Housing Development Authority’s (IHDA) current Low-Income Housing Tax Credit (LIHTC) application deadline approaching, Metropolitan Planning Council (MPC), Illinois Housing Council (IHC), and Corporation for Supportive Housing (CSH) presented “Strategies for Creating Mixed-Tenancy Developments” on Jan. 25, 2013. We spoke to more than 60 forward-thinking developers, property managers, and housing professionals, who attended for information on new policies and best practices for mixed-income and mixed-tenancy residential communities, particularly as they relate to the Housing Policy and Goals component of IHDA’s application. The event – which took place at MPC’s office and was moderated by Robin Snyderman, BRiCK Partners LLC, and sponsored by Joseph J. Duffy Co., General Contractors and Construction Managers – featured presentations by Andrea Traudt, IHC; Lindsey Bishop and John Fallon, CSH; Dan Burke and Brady Harden, of the State of Illinois Governor’s Office; and Breann Gala, MPC. Each presenter offered a unique perspective on the various roles and considerations developers should anticipate to effectively manage mixed-tenancy and supportive housing developments.
The morning was an opportunity for developers to gather with colleagues and learn how to effectively manage community-based supportive housing. The State of Illinois is involved in multiple consent decrees that prioritize the need to rebalance, develop and integrate supportive housing in communities. The State’s shifting priorities are reflected in IHDA’s current LIHTC application, which creates incentives for developers to allocate 10 percent of a development’s apartments to households headed by people with disabilities, seniors, veterans, or who are homeless or at risk of homelessness. The State’s Targeted Program connects with the State Referral Network to match these individuals and families with available apartments across Illinois. The additional incentives in IHDA’s 2013 Qualified Allocation Plan for the Targeted Program have led to an influx of interested developers– some seasoned in supportive housing and some new to this discussion. Creating integrated housing is beneficial on many levels, for both the residents and the region, as unneeded placement of individuals in hospitals or nursing homes is extremely costly.
Dan Burke, statewide housing coordinator in the Governor’s Office, explained the State’s perspective on rebalancing housing needs and reviewed the details of the referral Network (see presentation). The events shaping Illinois’ long-term care reform include Money Follows the Person (MFP), Facilities Closures, and the following consent decrees: Williams v. Quinn, Ligas v. Hamos, Colbert v. Quinn (see the following chart for more information). Many individuals moving through the referral network into targeted apartments will have been involved in one of these cases or programs to provide inappropriately institutionalized people with less restrictive housing. The Governor’s Office is charged with managing the process, including working with a supportive service agency to qualify households, creating a service plan that meets tenants’ needs, and connecting them to property managers and owners. While a person with special needs ultimately may choose who they work with, the State will provide continual supportive services to the individual. While the developer or owner is not in charge of identifying a supportive service provider, the Governor’s Office is encouraging developers to maintain relationships with local service providers to ensure the rental community has a strong network, and thus creates a healthier, stable environment for all tenants. The referral network works with the developers throughout lease-up, occupancy, and during transitions such as move-outs. One significant lesson I learned was that for community-based supportive housing to work and meet the needs of tenants and communities, collaboration and communication between the development community, housing advocates, IHDA, and the State of Illinois is needed more than ever.
Recognizing the challenges of managing supportive housing, CSH’s Lindsey Bishop and John Fallon trained developers on strategies for managing successful, integrated supportive housing (see the CSH presentation, "Creating Partnerships" and “What is Supportive Housing?”). They encouraged developers to proactively identify, engage and enter into agreements with strong social service providers and property managers. CSH reviewed the complexities of providing supportive housing and the need for a team that can meet the needs of every tenant. Strong partnerships create stable developments for communities and reliable income streams and reduced vacancy and turnover costs for the owner (see CSH resources for more information and to download the Toolkit for Developing and Operating Supportive Housing.)
On a related note, rental assistance remains a high priority for IHDA this year, particularly to help stabilize the lives of disabled, elderly, and veteran households. MPC’s Regional Housing Initiative (RHI) provides operating subsidies in the form of project-based vouchers to owners of rental buildings through the Will, DuPage, Cook, McHenry, and Lake region. Participating in RHI also gives developers a competitive advantage when applying to LIHTC and increases the revenue stream for owners. Developers can download and review the application here. RHI aims to pool rental assistance and target it to developments located in revitalizing communities; areas undergoing significant federal, state, and local investment; or opportunity areas near transit, job centers, and quality schools. The rental assistance reduces tenant’s rent burden by requiring they pay only 30 percent of their income toward rent, while increasing the diversity of housing opportunities across the region. RHI is in working with the Governor’s Office to determine how to align with the referral network’s efforts, but at this point in time, RHI subsidies may not be used in conjunction with referral network units.
The fiscal rewards and tax incentives of implementing mixed-tenancy and supportive housing into traditionally market rate buildings are apparent and statewide consent decrees motivate developers to act now. All of the organizations that presented the Jan. 25 event and many others are providing resources and tools to help developers navigate this new course. Two developers who recently incorporated mixed-tenancy into their properties – Dan Kotcher, DKI, Inc., and Janay Hayes-Mohamed, Renaissance Companies – attended the event to share their experiences. Over a working lunch, they reinforced the need for strong partnerships with quality service providers, which include the ability to help developers determine applicants who are a good fit for their development. They encouraged developers to anticipate an increased leasing process and very little turnover.
Creating successful partnerships between developers, property managers, and service providers ensures a cohesive and balanced environment that is able to meet the housing needs of a range of residents, both within the property and in the greater community. In the future, MPC will support The Chicago Community Trust and other leaders to continue this conversation with developers and mayors, to ensure a range of housing types that meets everyone’s needs is welcome in the Chicago region.
Christina Scordia, MPC Research Assistant, contributed to this blog post.