At the February 1 meeting of Lancaster City Council committees, Randy Patterson, director of economic development and neighborhood revitalization, updated council on the proposed South Square project. The public-private initiative would renovate ten buildings on the 100 block of South Queen into 62 two-to-three bedroom apartments. A total project price-tag of $15 million means that, in principle, $242,000 would be spent on each unit.
NewsLanc asked Patterson why such projects intended to promote low-cost, affordable housing seem to come at such unusual expense.
“Part of it is the complicated system to finance them,” Patterson said, “The low-income housing tax credits in themselves have syndication fees—you actually have to go out and find somebody who’s willing to buy the low-income housing tax credit. And then they pay a percentage on the dollar.” Pattern concluded that the legal fees, the filing of applications, and other background efforts draw up considerable expenses.
Low-income housing tax credit financing is expected to cover $11 million of the $15 million budget.
Patterson further noted that, for approved low-income housing projects, subsidies are essentially built into the overall development cost. “When you do a low-income housing tax credit property, your [occupant] incomes are capped at 80% of median,” Patterson elaborated, “So you have a gap between what you can charge in rent—because that person can’t pay over 30% of their income for rent and utilities—and what the actual cost of the project is. You have to finance that gap over time.”
Patterson was unable to estimate how much of the $15 million comes as a result of these soft costs.
City to waive fees for SD of L projects
Also at the committee meeting, Mayor Rick Gray requested that council approve the waiving of building permit fees for the School District of Lancaster throughout its extensive facility renovations. Gray estimated that this should yield between $250,000 and $500,000 in savings to the district. Because Gray’s administration has not charged these fees since the beginning the district’s Phase 1 renovations, these funds are technically ‘owed’ to the City until council formerly grants the waiver.
Gray said that to charge these fees would simply be an unnecessary shuffling of local tax dollars. Furthermore, Gray noted, the district has lately been a valuable partner to the City—footing the bill for school resource officers after grant funding recently expired and consenting to tax increment financing (TIF) initiatives promoted by the City.
The finance committee unanimously voted for the measure to proceed to a full council vote.
GREAT! The city is giving away MORE money, this time to the SDoL, yet we are still gutting city services and raising taxes at double digit rates. Its very defeating for city taxpayers to see money continually hemorrhaged at the whims of Rick Gray.