Local agencies seek city lots for federal housing program
Four groups have come up with the seed of an idea to partially solve Nome’s housing shortage, and have asked the City to help it grow.
Housing activist Sue Steinacher approached the Nome Common Council in a work session prior to the Dec. 12 meeting to present a proposal that the City of Nome donate a number of city-owned lots on which to stage a low-income housing tax credit (LIHTC) project for Nome. The four agencies have met and wish to work together on the project.
The proposal asks for all or some of the eight lots comprising Block 79A, two tiers of four lots, located east of town within the city limits between what would be O and P Streets east and west, when they are cut through, and on Fifth and Sixth avenues, north and south.
Under the LIHTC program, an IRS tax program dating from 1986, banks and corporations would fund the construction up front and in return receive federal tax credits for 15 years, renewable after 15 years to pay for renovation.
Munaqsri housing in Nome is an example of a successful LIHTC project.
According to housing groups, Nome has an acute general housing and low-income housing shortage with long waiting lists of families seeking affordable units. Agencies such as the Nome Police Dept. have reported lack of housing in general as a hindrance to recruitment.
The preliminary plan calls for Nome Eskimo Community as sponsor of the project, Bering Straits Regional Housing Authority to maintain and operate it, with Kawerak and NEST emergency homeless shelter providing staff support during project development. The group would submit an application to Alaska Housing Finance Corp., hoping for selection through the AHFC competitive process. AHFC has set a June deadline.
The money cannot go to buy land, but can apply to costs of site development and utility extensions, and pays 70 to 90 percent of construction costs, with the remaining covered through deferred developer fees and other sources.
The project would be fully funded without cost to taxpayers, aside from the lots.
An original proposal has been scaled down to 14 units according to Steinacher, a number that may be changed in adjustments for feasibility and matching the project to land available. The draft budget for 14 units is $9.7 million, which includes $1 million for utilities and power extensions.
The land would be made available only for the LIHTC project, independent of who would be the sponsor, currently NEC, and land to become available by donation only if funding were secured by the sponsor.
Who would be eligible to rent and occupy the housing? The project would provide housing to those with household incomes of 30 to 50 percent of Nome’s average median incomes. Tenant rent of one-third of the household income would yield sufficient money for maintenance and operation of the units, according to Steinacher. The units would be open to all Nome’s eligible low-income residents, regardless of race or ethnicity.
It came out in the discussion that Nome Eskimo Community owns six lots for a project; however, NEC could not limit occupancy to its members. Emma Pate, NEC director who also attended, declared her organization’s support for the project.
The council could see drawbacks and benefits to the proposal.
Councilman Stan Andersen cautioned that the city’s land belongs to residents and taxpayers of Nome, and providing the city would be giving away land belonging to the public.
However, some eyes around the council table began to twinkle with the possibility that the city could provide land on the eastern side of the parcel, so that when the project paid for the utility extensions, services would run along the nearer lots also, making them more valuable. The city has put the lots up for sale in the past to get them onto the property tax inventory, without attracting any buyers.
The council took the project under consideration, pending further information after the group firms up the number of units and the necessary number of lots.