A local nonprofit tied to the Bangor Housing Authority is struggling to secure funding to build a long-planned and controversial 24-unit affordable housing complex at the corner of First and Davis streets.
For years, the Bangor Housing Development Corporation, a nonprofit that owns Bangor Housing Authority-managed properties, has been trying to build the $4.8 million apartment complex that would provide affordable rentals to low- and middle-income working professionals. Over the last few years, the development corporation purchased and demolished six run-down apartment buildings along First Street and in 2014 secured city council and planning board approval for the project.
But since that approval, two attempts to secure federal tax credits that would cover as much as 80 percent of the project’s total cost through the Maine State Housing Authority have failed. And unless a third try later this year produces different results, the nonprofit may need to seek private investors to help fund it, according to Michael Myatt, the development corporation’s executive director.
“I’m just hopeful that we can put together a stronger application and compete higher than last time,” said Myatt, who also is the executive director of the Bangor Housing Authority. “We bought the land, and we are committed to making it happen. But some good things take time. We are not going anywhere.”
The planned building would include a mix of one-, two- and three-bedroom apartments that are geared toward low- to middle-income working families. Myatt said Tuesday that he was unsure whether the Bangor Housing Authority would manage the building.
Before it was approved by the city, the project received pushback from some area residents who argued the neighborhood had an overabundance of rental units. Some feared a new apartment complex would not help the neighborhood rebound from its longstanding issues with drug abuse, crime and declining property values and conditions.
Myatt said there is a huge need for workforce housing in the area, which is within walking distance to employers such as the Hollywood Casino, the Cross Insurance Center, Shaw’s supermarket, numerous restaurants and the downtown.
The project “will improve the neighborhood and provide a lot of housing for local kids and their parents,” he said.
Over the past few years, the Maine State Housing Authority has administered roughly $3 million per year in U.S. Department of Housing and Urban Development Low-Income Housing Tax Credits to local affordable housing projects. Developers that receive awards through the program can market the tax credits to private investors such as banks or corporations to help pay for the project.
The Bangor Housing Development Corp. applied for 2016 and 2014 tax credits through the Maine State Housing Authority to help fund the First Street project but on both occasions was placed several spots down on a one-year wait list. In order for a project on the waitlist to be selected for the tax credits, a winning project — plus all of the other projects ahead of it on the waitlist — would have to drop out, according to Deborah Turcotte, a Maine State Housing Authority spokeswoman.
Projects are selected based on how they score on the state’s Qualified Allocation Plan, the tax credit program’s scoring mechanism, compared to other projects. Through the QAP, a project is scored on several factors such as its location, use of existing structures, accessibility and its financing, among others.
Turcotte said the project would have received $3.8 million in tax credits, totaling about 80 percent of the project’s entire cost. Myatt speculated that depending on Congress’ planned tax reform bill, that amount could fall substantially because of a significant drop in the value of the tax credit.
The project also would have relied on Maine State Housing Authority loans and a TD Bank grant to help pay for the remainder of the project’s cost, Turcotte said.
Regardless, in 2014, the project was placed fourth on the tax credit waitlist scoring 44 points on the QAP — just five points below a project that received tax credits that year. In 2016, the project dropped to 10th on the waitlist with 43 points — 11 points below the lowest scored project that received tax credits that year.
In 2016, the First Street project received low marks in several categories, including not providing housing for homeless, elderly, or disabled people; not utilizing existing historic buildings; not utilizing a payment-in-lieu-of-taxes arrangement to lower project operating costs; and not offering low-income housing vouchers.
The Maine State Housing Authority is in the process of rewriting the state’s QAP with new scoring standards, which the agency does every few years. Those new standards would be in place when next year’s project applicants are ranked. The Maine Housing Authority plans to start accepting applications in January and announcing winners next spring, Turcotte said.
Myatt said he hopes the new QAP will place a higher value on family housing; readiness, because it already has city-approval; and so-called Smart Growth, which the project scored perfect marks on because of its proximity to jobs, public transportation, the downtown and a grocery store. He also hopes a new category would be created to account for certain services that would be provided by the project for its tenants, such as budget planning assistance for adults and possibly learning programs for youth through the Boys and Girls Club.