Boise & Garden City

Affordable Boise apartments were supposed to go here. This is why they never got built

Two years ago, Boise approved 50 affordable and market-rate apartments off Whitewater Park Boulevard with rents between $290 and $777 a month.

But the apartment complex still hasn’t been built. It may never be.

The Sandhill Crane Apartments have stalled because their developer, the Boise City-Ada County Housing Authority, has not received tax credits that developers, including the housing authority, say are critical to build housing for low-income people.

With rent costs increasing 14% in 2018 alone, Boise has come under pressure to build more affordable housing. The vacancy rate for rentals in Ada County is meager at 2.8%, but it’s even worse for affordable units: 0.88%.

Those developers who are willing to help must fight over the small pool of obscure federal tax credits.

“As we grow and get larger, there’s going to be a greater need for affordable housing, and the resources just are not expanding to keep up with the pace,” said Bob Reed Jr., the housing authority’s development director.

Why Sandhill Crane apartments aren’t being built

The Boise City-Ada County Housing Authority provides affordable housing assistance to 2,600 people. Low-income renters can apply for housing vouchers to pay for their rent, or they can apply to live in one of the authority-owned apartment complexes, such as Shoreline Plaza, 675 S. 13th St, or Capitol Plaza, 700 W. Cunningham Place, which offer market-rate and discounted units.

The authority bought the three-acre Sandhill Crane property at the corner of 32nd and Moore streets in 2002 with the intention of building 109 apartments. The West End looked different at the time: Whitewater Park Boulevard, which now runs along the western edge of the property, hadn’t yet been built, nor Esther Simplot Park, which the complex would have faced.

The Boise Planning and Zoning Commission denied the apartment project after neighbors raised concerns about traffic. The housing authority kept the property as the neighborhood grew around it.

“Whitewater Park Boulevard was not there at the time,” Reed said. “There was some delay awaiting what that would look like.”

In 2016, the authority applied to the city of Boise with plans for a new project — 44 low-income apartments and five at market rate, plus a manager’s unit.

The Sandhill Crane Apartments were to have had a community room with a kitchen, fireplace, and TV area; a computer room, an exercise room, a basketball court and a playground. Boise City-Ada County Housing Authority

Neighbors pleaded with the City Council to deny the project, arguing that their neighborhood already bore the brunt of sheltering Boise’s low-income renters.

Just months earlier, the city had announced it was working with developers to build 120 affordable apartments at Fairview Avenue and 24th Street — a complex called Adare Manor now under construction.

Despite the neighbors’ objections, the council unanimously agreed to allow the Sandhill Crane apartments to move forward, arguing that the project complied with the city’s vision for the area.

“It would be a wonderful location for affordable housing,” said Dianne Hunt, owner of Syringa Housing Corp., the housing authority’s development partner on the project. “It’s so close into Downtown Boise, and we need housing so badly. It would be a real asset to the community.”

With the city’s approval in hand, the authority could apply for the tax credits.

Sandhill Crane Apartments site plan

How low income tax credits work

The low-income housing tax credit was created during President Ronald Reagan’s administration in 1986 as a public-private partnership. In return for financing affordable housing, investors received a reduction in taxes. Since the program was created, it has led to the financing of nearly 3 million rental units, according to the Urban Institute.

To receive the credits in Idaho, both private and public developers, like the housing authority, apply to the Idaho Housing and Finance Association, a quasi-governmental agency that allocates the federal credits through a competitive process. The IHFA scores projects based on their feasibility, the market’s need, and how many renters they serve.

Developers must agree to accept tenants earning 80% or less of the area’s median income.

Developers receiving the tax credits then turn around and sell them to investors, typically selling for 94 to 96 cents on the dollar. Because the credits are valid for ten years, a developer awarded a $100,000 yearly tax credit would accumulate a total of $1 million in credits, which he could sell for $950,000. The proceeds help pay for the housing project.

But states are limited in the value of tax credits they can award. Last year, the IHFA had $4.4 million in tax credits available to award. It received 20 applications requesting a total of $14.1 million. Only eight projects received funding. Of those, five are in the Treasure Valley.

The housing authority has applied twice the last two years to the Idaho Housing and Finance Association for $820,000 in tax credits, which Reed expects the housing authority could sell for $7.9 million — 70% of the cost of the $11 million project.

“The competition is such that you have to evaluate your possibilities of applying again,” Reed said. The housing authority can next apply for tax credits in August, if it doesn’t sell the land.

Unlike other states, Idaho relies entirely on the federal government to fund affordable housing. In 1992, the Legislature created the Idaho Housing Trust Fund with a goal to match federal funds with state dollars to build more affordable housing.

But in the 27 years since the program was created, the Legislature has never funded it, said Cory Phelps, Idaho Housing and Finance Association’s vice president of project finance.

“Here in Idaho, really the only resource we have to address the affordable housing needs is the tax credit,” he said.

The Boise City Ada County Housing Authority had hoped to develop this property adjacent to Whitewater Park Boulevard in Boise, near Esther Simplot Park. The Sandhill Crane Apartments would have been affordable housing. Darin Oswald

How the Sandhill Crane Apartments fared

The project has scored well in the competitive process — it lagged just one point behind the highest-scoring projects that did receive tax credits. But that one point has made a difference.

With no luck during the 2017 cycle, the authority decided to apply again the next year, this time alone, without Syringa. And again, the project fell just a point short.

The problem, Reed says, is location. An applicant can score a point by locating a project in a census tract with a lower median income than the surrounding area.

Phelps said the federal government designates the specific census tracts that can score an extra point — Idaho has no say in the matter.

In the 17 years since the housing authority bought the property, the West End has changed. The old distressed houses and overgrown lawns are few and far between. Now, children and swimsuit-clad couples park near tree-shaded lawns and cross Whitewater Park Boulevard to swim and sunbathe at Esther Simplot Park.

Now, having spent nearly $12,000 each round applying for the tax credits, the housing authority must decide how to move forward. In November, the housing authority board created a subcommittee to look at other financing options, like selling bonds or building housing it could charge higher rents for.

“We’ve looked at all of these different financing mechanisms to see if we can find a combination of mixing low-income housing, workforce and market rate to make it work, and it just doesn’t pan out,” Reed said.

During an April board meeting, he presented 10 financing options, most of which required the housing authority to invest at least $2 million more into the project.

Deanna Watson, the authority’s director, determined that the agency can’t risk spending that much more on Sandhill Crane. At that meeting, she suggested that the authority partner with a developer or sell the property and look at other sites.

The authority’s board will make a decision about how to move forward with the project in June or July.

“You’ve got to have the tax credits to make anything work when we’re talking about affordable housing,” Reed said. “The tax credit round is coming up in August. We’re still contemplating whether to move forward.”

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Kate reports on West Ada and Canyon County for the Idaho Statesman. She previously wrote for the Louisville Courier-Journal, the Center for Investigative Reporting and the Providence Business News. She has been published in The Atlantic and BuzzFeed News. Kate graduated from Brown University with a degree in urban studies.