Gov. Doyle: Governor Doyle Announces $10 Million WHEDA Initiative to Help Preserve Affordable Housing for Seniors, Low Income Wisconsin Residents

Contacts:
Ron Legro, Wisconsin Housing & Economic
Development Authority, 414-227-2291
Jessica Erickson, Governor’s Office,
608-261-2156

During visits to Woodland Meadows in Menasha and Kannenberg
Plaza in Wausau, Governor Jim Doyle announced today a $10 million initiative
to help preserve affordable housing for seniors and other lower income
Wisconsin residents. The Wisconsin SOS program – “Saving Our Stock” of
Affordable Housing – will focus on project-based Section 8 housing
developments. The Wisconsin Housing and Economic Development Authority
(WHEDA) is committing the funds as an additional step in its continuing
efforts to preserve housing.

“A significant number of these properties are at risk of
being taken out of the affordable housing stock either through deterioration
or sale to owners who will not keep the rents affordable,” Governor Doyle
said. “Wisconsin SOS will strengthen our efforts to preserve affordable
housing and ensure that every Wisconsin citizen has a decent place to live.”

The Governor also announced that he has named 12 public
members to a Task Force for Housing Preservation. Staffed and assisted by
WHEDA, the task force will look at additional measures the state and other
organizations can implement to preserve affordable housing. Task force
members include professionals from the housing development industry,
financial experts, community organizations, and government officials.

Section 8 is a federally subsidized program that promoted
the construction of many new affordable housing units beginning in the
1970s. Under Section 8’s continuing rental subsidies, residents pay 30
percent of their adjusted gross income toward rent, the difference being
paid by the US Department of Housing and Urban Development.

From 1974 to 1983, WHEDA issued $367 million in bonds to
provide financing for 11,802 units of project-based Section 8 housing in
Wisconsin. WHEDA serves as contract administrator for more than 30,000
units of such housing statewide, processing over $120 million in annual
rental subsidies.

The Governor said several factors threaten Section 8
housing, including looming federal subsidy expirations, changes in tax law,
aging investors in the properties, and dwindling federal resources.

“In the past five years, more than 160,000 apartments
nationwide, where rents once were kept affordable through the federal
Section 8 program, have been converted to market-rate apartments,” Governor
Doyle said. “Where this conversion has occurred, rents have soared by an
average of more than 40 percent. Other rental units have been allowed to
deteriorate. The ultimate result – displacement and disruption for
low-income seniors and others who in some cases lived many years in these
apartments.”

Until now, Wisconsin has avoided some of the most severe
effects, thanks in part to WHEDA’s existing preservation programs. WHEDA has
not had any of the developments that it financed opt out of the Section 8
program. However, in the past three years, seven HUD properties
representing 230 units have opted out. Among Section 8 developments
financed by WHEDA, 34 assistance contracts representing over 3,400 units
statewide will expire between now and 2010. Of those units, 82% house
elderly residents.

Some housing experts estimate that 70 percent of all
assisted housing eventually will encounter unmet capital needs. “The great
majority of affordable housing is at risk unless we take action now,”
Governor Doyle said. “Affordable housing is too precious a resource.”

WHEDA Executive Director Antonio Riley said that besides
financing thousands of affordable apartments in Wisconsin, WHEDA already has
invested in maintaining the state’s affordable housing stock. Efforts so
far have helped preserve 57 developments representing over 5,500 affordable
housing units. Also, in the past year, WHEDA set aside 40 percent of the
federal low-income housing tax credits that it administers to preserve
affordable housing — the highest such set-aside in the nation.

Under the new SOS effort, preservation dollars will be made
available to address debt restructuring or needed capital improvements.
Funds may be used to:

o Facilitate transfers of ownership that will preserve
affordable housing;
o Fund operating deficits that are a result of frozen
rents and increasing expenses;
o Address capital needs, not only for decent, safe,
and sanitary reasons but also to make apartment units competitive in the
local market;
o Restructure and refinance current mortgages, for
example through lower interest rates, and lengthened amortization.

The SOS program will be targeted to Section 8 housing, but
could include any other affordable units, including those that use expiring
Section 42 Affordable Housing Tax Credits and Rural Housing units.

The Governor made his announcement in Wausau and Menasha at
private housing developments with affordable rents subsidized through
project-based Section 8 federal funds administered by WHEDA. The two
housing developments were chosen as examples of affordable housing that may
be endangered in the near future.

The Kannenberg Plaza elderly housing development in Wausau
is operated by that city’s housing authority. Winnebago County Housing
consists of scattered-site housing in Neenah, Menasha and Oshkosh. The
Governor spoke in Menasha at Woodland Meadows, family and elderly town homes
owned and managed by a private firm, Dominium Development and Acquisition.

The Wisconsin SOS initiative ties into the Governor’s “Grow
Wisconsin” plan to create more family-supporting jobs in the state and
preserving affordable housing that can serve lower income workers.

WHEDA is an independent state authority that works with
developers and lenders to provide low-cost financing for housing and small
business development in Wisconsin. For more information on WHEDA’s housing
programs, call 1-800-334-6873 or visit www.wheda.com.