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Hourglass forum looks at local affordable housing development projects (video)

Clockwise from bottom right: The Delp Wing at the former St. Joseph Hospital; rendering of the Dinah’s Hill redevelopment on Strawberry Street in Lancaster; rendering of the Stiegel School redevelopment in Manheim; and Hourglass First Friday Forum speakers Michaela Allwine, Dana Hanchin and Chad Martin. (Sources: Provided and OUL files)

“There is no community, no county, no state that’s not talking about affordable housing,” Dana Hanchin said.

Hanchin is the president and CEO of HDC MidAtlantic, a nonprofit that builds and manages affordable housing. She was one of the three featured speakers at Hourglass Foundation’s “Affordable Housing Spotlight,” its First Friday Forum for October.

Lancaster County has an acute shortage of affordable housing, which is contributing to its homelessness crisis. While it’s necessary to maintain attention on the problem, it’s also important to highlight solutions and recognize the people who are “figuring it out and making it work,” Hourglass Executive Director Diana Martin said.

HDC MidAtlantic

Dana Hanchin

Given today’s mix of construction costs and housing regulations, market-rate developers can’t build housing that working families can afford, Hanchin said. More and more people are getting priced out of more and more places, and communities won’t be able to thrive if they can’t find a way to help them.

Nonprofits like HDC address this market failure through government subsidies; most commonly, the federal low income housing tax credit, LIHTC, administered in Pennsylvania by the state Housing Finance Authority. HDC secured tax credits for The Apartments at College Avenue, the first phase of its development plans on and around the former St. Joseph Hospital campus, and it plans to seek them for Phase 2 as well, Hanchin said.

The Apartments at College Avenue is a 64-unit, $23 million project. HDC held a groundbreaking in February; the project is expected to be half done by the end of the year and ready for occupancy next summer. More than 260 people have signed up to be notified when HDC begins accepting residency applications, Hanchin said.

Phase 2 involves the redevelopment of the hospital’s Delp Wing. One floor is being reserved for Milagro House, which serves single mothers who are homeless or housing-insecure, providing transitional housing for them and their children while the parents receive the vocational and life-skills training they need to be self-sufficient.

On the other two floors, HDC plans to build and manage 49 affordable units. Of those, 13 will be long-term supportive housing for people who are homeless or at risk. The project is budgeted at $18 million; Hanchin said HDC is looking to close a $2 million funding gap in time to apply for tax credit in the upcoming round, which PHFA has pushed back to the first quarter of next year.

The third and final phase would involve building a roughly 50-unit apartment building at 838 Marietta Ave., across from the hospital campus’ south end. That project is several years out, and won’t open before 2029 at the earliest, HDC says.

Chestnut Housing

Chad Martin, executive director of Chestnut Housing, followed Hanchin. His nonprofit is an outgrowth of East Chestnut Street Mennonite Church; it helps individuals to exit homelessness, partnering with Tenfold and other nonprofits to provide case management and wraparound services. Martin characterized it as “small but mighty and nimble.” Unlike larger nonprofits, it does not use low-income housing tax credits in its financing.

Chad Martin

Its current redevelopment project in Lancaster’s southeast, the 8-unit, $2.2 million Milburn Apartments, is on track to wrap up this spring. Next up in the city is a plan to redevelop the former Strawberry Hill Restaurant on Cabbage Hill, which Chestnut Housing is under agreement to acquire from the Lancaster City Land Bank Authority.

Eight to 12 affordable apartments are planned, plus offices for the nonprofit and a flexible meeting space for Chestnut Housing and the community at large.

The $3.5 million project will take 12 to 18 months once it gets under way; if all goes smoothly, it could be open within three years, Martin said.

The complex will be named “Dinah’s Hill Apartments,” after a formerly enslaved woman, Dinah McIntire, who built a log cabin at the site more than 200 years ago. Cabbage Hill was known as “Dinah’s Hill” for decades before its more familiar name took hold, and it’s an honor to be able to make her legacy known anew, Martin said.

Meanwhile, Chestnut Housing is working with members of Forest Hill Mennonite Church as “Bridgeport Housing” to develop an affordable housing complex of 12 to 15 units in the 1700 block of Lincoln Highway East in East Lampeter Township.

Völker

The third speaker, Michaela Allwine, previously served as director of housing and community development at the Lancaster County Redevelopment Authority. She is now associate director of development for Völker, a Wisconsin-based affordable housing development and management company.

Michaela Allwine

It is planning to redevelop the former Stiegel Elementary School in Manheim Borough. It will have 31 one-bedroom and 12 two-bedroom apartments for ages 62-plus, for households from 20% to 80% of Lancaster County’s median income.

The building, which closed in 2017, is in excellent shape, Allwine said. It’s just two blocks from the borough’s Main Street and there’s a bus stop at the corner, maximizing residents’ transportation options.

The project budget is $20.3 million. Allwine did not indicate a timeline.

Why so pricey?

During the Q&A, Hourglass board member Brian Davidson asked why affordable housing projects are routinely so much more expensive than market-rate ones, with the cost for each apartment unit often comparable to that of a full suburban house.

Some of it has to do with red tape and the mandates that come with government money, Hanchin said. Another big factor, she said, is that projects funded with the low-income tax credit can’t be structured to generate much cash flow, so a lot of expenses have to be included in the initial financing. In HDC’s case, project budgets include large reserves for operating expenses, maintenance and replacement of furnishings and equipment, supportive services and more, including HDC’s own development fees.

“Those are all funded up front,” she said.

In addition, zoning and land development regulations affect costs dramatically, she and Martin said. A case in point, Martin said: Thanks to East Lampeter Township lowering its minimum lot size per dwelling unit from 3,000 square feet to 2,000 square feet, Bridgeport Housing will be able to have up to 15 units, rather than 10 units.

Chestnut Housing’s fixed costs are about the same in either case but spreading those costs over 15 units is far more feasible.

“To be able to do 50% more in that case is an enormous benefit to that project,” Martin said.

More broadly, he said, it would be great if municipalities moved away from single-family zoning and allowed two- to four-unit buildings by right.

Scott Standish, director of the Lancaster County Planning Department, was in the audience. At Commissioner Alice Yoder’s prompting, he briefly described a model municipal zoning ordinance that the department has been drafting, which would allow a greater variety of housing types.

It’s tentatively scheduled for release sometime in the first quarter of 2025, he told One United Lancaster.

The authority over zoning rests with municipalities, not the department or the county, so the next step would be to encourage them to adopt regulations in line with the model’s provisions.