The Sentinel’s J.J. Stambaugh brings you this story today.
When it opens its doors, Minvilla Manor will house up to 57 people who had been chronically homeless. Minvilla’s residents will be people who have chosen to seek help to get off the streets. Permanently. If you’d like to know more about them, and why permanent supportive housing is what they need, click here to walk through our FAQs.
As Stambaugh’s piece points out, the costs for this project have increased. Here’s a little more detail as to why.
- The overall economy affects Minvilla just like it does everything else. Construction costs have gone up, driven in large part by increases in fuel costs.
- In the two to three years since original projections were made, materials costs have gone up. That shouldn’t surprise anyone. Too, we now know more much more about the structure and its material condition than we did when this project started.
- Using Historic Tax Credits requires that builders adhere to architectural standards that can increase costs. On the other hand, the increase in costs generates more tax credit equity that can be sold to investors.
- BUT, the tax credit market is soft right now. Investors who typically purchase tax credits don’t have the earnings, hence the tax liability, to use the tax credits. That means demand for tax credits is lower now than it was just a year ago. Prices offered by investors for tax credits is lower, and that lowers the availability of tax credit equity to the project.
Is Minvilla an expensive project? Well, yes. It will cost more to do this project as a renovation of an historic property than it would to build new. But keep in mind that the funding for this project originates almost entirely outside of the local community. It’s federal dollars that are designated for this kind of project; almost all of it flows through HUD. It’s going to be spent in some community. Best that it be ours.
Will this permanent supportive housing project help to end chronic homelessness? We have every reason to believe that it will, and that’s the bottom line.