$1 million investment of HOME funds was approved by the Johnson County Board of Commissioners Thursday, November 17 for the new Prairiebrooke Townhomes development.
20 one- and two-story dwelling structures containing 76 units, 60 of the units designated for low income 2-bedroom and 3-bedroom units through a Low-Income Housing Tax Credit will be built at 174th Street and Kill Creek Road.
Jay Leipzig, planning director, said the homes are all similar units with garages, most of the funds are recaptured HOME funds from 2017 and it had gone through the HUD process.
“Zoning is in place, and it is shovel ready,” he said.
Charlotte O’Hara, commissioner said, was the project on tax credits for $8 million.
Leipzig said $9.6 million tax credits had been sold to net $8 million.
O’Hara said what about tax incentives from the City of Gardner.
Michael Snodgrass, CEO of Oikos Development Corporation—a non-profit development company who is building the homes, said they are working with IRBs through Gardner with the help of sales tax to pay the full property tax.
O’Hara said what was the market rate on townhomes.
Snodgrass said they had been hearing townhomes in Johnson County are $1500 and the cost of theirs were set by HUD.
“We don’t set the price, but ours will be below $1200,” he said.
O’Hara said was the public investment 60 to 70 percent.
Snodgrass said that is the case for typical projects.
“But we use public funds to bring down costs to lower income tenants,” he said. “Units will be less than $500. You can’t get any unit in Johnson County at $500.”
O’Hara said would vouchers be available.
Snodgrass said no and six of the units were for $500 a month for fixed income residents and units were also ADA compliant.
“They are ideal for Seniors,” he said.
Snodgrass said there would be $650 rents too.
“Kansas is pushing us to get rents as low as possible,” he said. “We will have rooftop solar to keep energy costs as low as possible.”
O’Hara said we’re they any programs that would allow for the purchase of the units.
Snodgrass said not for the Prairiebrooke Townhomes.
“You’re getting more bang for your buck,” he said. “12 units are at market rate and the State has restricted amount of tax credits we can receive; otherwise, it would be down more.”
Janee Hanzlick, commissioner, said Snodgrass was something of a legend.
“This is a significant project in Johnson County,” she said. “I e heard from residents that they want to be part of the county but are struggling with housing shortages and challenges.”
Hanzlick said she was excited about the project.
“30-year affordability is very significant,” she said. “The quality being provided is very significant.”
Shirley Allenbrand, commissioner, said the need for affordable housing is greatly needed.
“You need to be congratulated for the quality of homes,” she said. “I’m excited about this being in my district. This is a good way to keep young people in the county. Gardner is working hard for the future with a different type of housing.”
Becky Fast, commissioner, said was 30 years a new requirement.
Snodgrass said they wanted a quality product and there was a great amount of need. He said putting in an extra 15 years they are able to out back into the program with improvements.
Fast said her district was losing affordable housing, and they have little land left.
O’Hara said she wanted to know if the townhomes were available for “lease-to-own” or co-op options.
Snodgrass said no and most people move every five to seven years, and they were limited by the tax credits.
Leipzig said one of the things they had talked about was “new creative approaches.”
O’Hara said home ownership is important.
“It is the foundational stability of Johnson County,” she said. “A home is most people’s most valuable asset.”
Snodgrass said they are giving people the most bang for their buck while they chose this path.
He said he has built hundreds of single-family homes and agreed getting home ownership was vitally important.
Michael Ashcraft, commissioner, said he wanted to know why it was $1 million and the source and use of funds.
Leipzig said after a subsidy analysis, proposed rents and recaptured funds that have to be reused they came to the money.
“The money is committed for this type of project,” he said. “If it is not used it goes back to HUD.”
Allenbrand said it also has to be partnerships with cities.
O’Hara said how will they handle the huge jumps in property taxes.
Snodgrass said if property taxes continue to jump up to 21 percent every year, then it might be a struggle.
Fast said most tax credits go to rural places.
“What helps Johnson County and more urban areas,” she said.
Snodgrass said the State is doing its best to spread credits across the state and not “just the Western part like in the past.”
“Tax credits don’t go as far as they used to because of labor costs,” he said. “It’s still affordable in the KC market.”
The total project is estimated at $15,958,856 with approximately $8 million being LIHTC proceeds and approximately $7.5 million in construction loans and State and sponsor fees in addition to the $1 million in HOME funds.
The maximum allowable HOME subsidy for this project is $1,466,964. This was calculated based on HUD underwriting criteria with HOME per-unit subsidy limits to ensure compliance with HUD Guidelines.