Alliance, partners to build 31 single-family homes
Scattered-site homes to be constructed in Allentown on vacant properties
November 2, 2021
Last week, the Pennsylvania Housing Finance Agency announced the Hilltop Alliance and its development partner Gatesburg Road Development had been awarded $1,042,763 in Low Income Housing Tax Credits (LIHTC) to help build 31 single-family of affordable homes in Allentown.
Don't blame Allentown residents if they have heard it all before and are wary, but this time Hilltop Alliance Executive Director Aaron Sukenik says it will be different. The Hilltop Housing Ventures development of the South Side Local Development Company was planned for more than 60 homes in the Beltzhoover Avenue corridor, but was a phased approach that never got beyond Phase 1. Construction on the new Allentown's houses will occur almost simultaneously inside of a year.
Predevelopment has begun and is expected to go through 2022. Construction is anticipated to take place entirely in 2023 with the properties available for rent in late 2023 or early 2024.
The Hilltop Alliance was awarded the tax credits in the second year of applying. Mr. Sukenik said very few, if any, tax credits are awarded in the program the first year they are applied for and many awarded in the third year or never.
The scattered site development, and its incorporated partnership, will be called "Grandview South Homes."
Over the past six years the Hilltop Alliance and its partners have worked to acquired 33 vacant properties, many through the Pittsburgh's property reserve process, in the Grandview South portion of Allentown. Grandview South takes in the area south of Grandview Park, north of E. Warrington Avenue and between Beltzhoover Avenue and Renwick Street.
"The nickname given to that section of Allentown, between Warrington Ave and Grandview Park, in our 2013 housing market restoration strategy. That plan is what focused and ultimately guided our multi-pronged work in this section of the neighborhood, resulting in a lot of home repair programs for homeowners (for improving existing housing), rehab of existing vacant for immediate resale for improving salvageable vacant structures, and the site assembly and development plan for this project for addressing vacant lots," Mr. Sukenik said.
"The planning process for that included 3 well-attended community meetings back in 2013. In other words, we didn't come up with this focus area -- the community did."
Other organizations working on the site acquisition include: The City of Pittsburgh, the Urban Redevelopment Authority, Mt. Washington Community Development Corporation and the Pittsburgh Housing Development Corporation. The scattered sites included eight structures needing demolished and 25 vacant lots.
Planned are 23 two-bedroom and eight three-bedroom houses, four of the homes will be ADA accessible. In fitting with the neighborhood, some will have off-street parking pads in the rear except for the ADA houses which will have parking on the side.
All the homes were designed in consideration of the existing zoning for the neighborhood.
Mr. Sukenik said all of the houses were designed to fit in with the neighborhood, according to the topography and ADA guidelines. The Allentown Community Development Corp. worked with architects, LGA Partners, to assure the homes were appropriate with the existing scale of the neighborhood.
The Hilltop Alliance also met with residents several times during the planning to gain neighborhood input. They plan to continue to meet with neighborhood people to keep them updated throughout the project.
The pre-development process will take about a year before construction will begin. Mr. Sukenik said although the properties needed are under partners' control, the titles will still have to be cleared and transferred into the development partnership. During that year, additional financing on the $12 million development will be firmed up.
Since the project is using LIHTC funding, the stand-alone homes will be affordable housing rentals for the first 15 years. Rents are anticipated to be in the $900 to $1,100 range, including utilities, based on 20-60% of the Area Median Income (AMI). At 40% AMI a family of two would qualify with a household income of $25,500 while a family of four would qualify at 60% AMI with an income of almost $48,000. ADA units will rent for less.
"A lot of people who fall into these AMI ranges are working families," Mr. Sukenik said.
Although the units aren't specifically planned for Section 8 vouchers, those with vouchers may also apply to rent one. Denying a tenant because of vouchers would be a violation of Fair Housing laws.
The difference between LIHTC units and the Section 8 voucher program is the LIHTC tax credits are awarded to the developer and stay with the unit that's constructed, while the Section 8 voucher moves with the person receiving it.
Mr. Sukenik explained as part of the agreement for the LIHTC funding, the houses will be kept as affordable rentals for a minimum of 15 years. After the 15-year term, the hope is the current resident of the home will be in a position to purchase the home.
The Hilltop Alliance will be working with residents of the homes to repair credit and help prepare them to become home owners.
He said the cost to build each of the homes is expected to be around $300,000 each. Predevelopment costs of preparing each site with removing old foundations and adding utilities is anticipated to be $75,000 per site.
At the end of the 15 years, Mr. Sukenik said he expects the homes to sell for about $100,000, about the amount of debt that will still be owed on each property.
Since the LIHTC is a government program, compliance is strict with income limits on applicants. A property manager, NDC Asset Management, will be on-site and in the neighborhood.
Gatesburg Road Development has successfully developed more than 500 units of scattered-site housing in Pennsylvania including projects in Garfield, Homewood and Northside.