So is this true or not? Instead, we get PR babble: “Avalon’s development costs on this project reflect both standard market development as well as the unique costs of developing permanent supportive housing.”

So those ‘unique’ costs work out to $250K per unit? I am taking the lack of a reply to that direct question as a YES.

We appreciate the opportunity to elaborate on Avalon’s efforts to develop permanent supportive housing at 1500 Pauline. Given the complexity of these projects, we would also welcome the opportunity to explain it more fully in person. The nonprofit development process – especially supportive housing – differs substantially from similar work in the for-profit market.

The decision to demolish and rebuild on this site was essentially made by MSHDA, the Michigan State Housing Development Authority, after determining that investing in renovating the existing buildings was not ultimately cost effective. We did struggle with the question of density on the site. Of course we hate to lose any affordable housing units, but we know from experience the importance of finding a workable balance when there are many people living in close proximity.

Avalon’s development costs on this project reflect both standard market development as well as the unique costs of developing permanent supportive housing. Complicated financing packages are necessary to guarantee permanent affordability, and the use of Low Income Housing Tax Credits generates additional administrative costs. This project in particular also includes tenant relocation expenses that are federally determined. As noted, the presence of the community center on site also has a cost, but one we think is well worth the return it provides on community building, support services, safety and security. Avalon works to create community centers at all larger sites to facilitate tenant access to resources and engage both kids and adults in a supportive community. The tenant population for 1500 Pauline is and will continue to be similar to other Avalon projects – people with extremely low incomes, including those who are homeless or at-risk of homelessness.

We are happy to talk in greater detail about the specific challenges of nonprofit development. Avalon has learned from 18 years of experience that cutting corners on the affordable housing development process inevitably leads to problems later on. Certainly that is one of the reasons why 1500 Pauline is failing now.

It is important to remember that Avalon stepped in at the start of 2009 to take over management of 1500 Pauline, and two other equally distressed low-income rental properties at the request of the County’s Office of Community Development. The three buildings, still owned by another nonprofit, Washtenaw Affordable Housing Corp, all need major rehabilitation and refinancing. Avalon has spent the last 2 years working with funders to figure out how to preserve the public investment in this significant portion (114 units total) of the County’s affordable housing stock, and we are still at it. The project at 1500 Pauline was never financially sustainable, and the buildings were poorly managed and under-maintained for years. We strongly believe that the property, the neighborhood and, most importantly, the lives of the tenants have improved in the last two years as a result of our involvement.

Permanent supportive housing continues to be the most successful long-term solution to homelessness, though it remains a challenging business that requires complex and highly regulated financing scenarios. Avalon is always happy to provide tours and/or further information to anyone who is interested. Contact Michael Appel at mappel@avalonhousing.org or call 663-5858. Thanks!

Carole McCabe
Executive Director
Avalon Housing, Inc.

As for the low income housing, sound a bit rich in my opinion. As residents of Ann Arbor, our elected officials, as stewards of our taxpayer largesse, should ensure that this project done not become an over blown white elephant that ruins the character of the streets or divert focus from the myriad other important zoning and safety issues in the community.

THAT would be affordable home ownership, not tempoary locations. God forbid we worked toward that goal.