A proposed apartment complex in Warsaw has been awarded one of Indiana’s extremely competitive affordable housing tax credits. And two proposals in South Bend have been waitlisted.
The 2022 Rental Housing Tax Credit winners were announced in November — and one winner was the Warsaw project being developed by Indianapolis-based firm Real America, LLC.
The company has built 37 other complexes around the state financed through the affordable housing tax credit program as well as several market-rate developments, including the LaSalle Hotel Apartments in South Bend.
“Affordable is our bread and butter,” chief operating officer Melanie Reusze said. “That’s what we like to do, that’s what we get passionate about.”
Jeff Ryan, the company’s vice president of development, said the Warsaw project — known as The 2525 — will contain 60 apartments. It will be a mix of one, two and three bedrooms renting at 30, 50 and 60 percent of area median income.
“We’ll actually have nine different rents at the property,” Ryan said. “Because we’ll have three different rents at each of the one-, two- and three-bedroom levels.”
The cheapest rent at The 2525 will be $300 dollars a month for a one bedroom at 30 percent of area median income, and the most expensive will be $1,000 dollars a month for a three bedroom at 60 percent.
The project is now in the pre-construction planning phase, and Real America plans to start construction in early July with the first residents moving in by fall 2023.
Ryan said both Warsaw and South Bend have a major need for additional rental choices.
“Our market studies came back that there was 98 to 99 percent occupancy of similar apartments to what we’d be doing,” he said. “Either market rate or affordable.”
But the company’s South Bend project was waitlisted for a credit.
The Diamond View Apartments would be built on an empty lot next to Four Winds Field and would consist of a 60-unit market rate apartment building, a 60-unit affordable apartment building and seven market rate townhomes.
Ryan said Indiana awards the credits on a points-based system, and larger cities like South Bend are typically more competitive.
“Our deal in Warsaw was simply able to score a little bit more points,” he said. “It was in a small city instead of a large city, and the large city tends to be the most competitive, highest scoring application.”
The other South Bend proposal — a conversion of the old Marquette Elementary School into lofts by Brownsburg-based Anderson Partners Development — was also waitlisted.
But the waitlist itself is unusual — this is the first year one has even been created.
Ryan said that’s due to the proposed Build Back Better bill, which includes additional affordable housing credits that will only be available if the legislation passes.
And despite being on that waitlist, Ryan said Real America is moving forward with the Diamond View Apartments anyway.
If Build Back Better doesn’t pass — and the company doesn’t get off the waitlist — it plans to apply again next year for a credit.
“It often takes two applications to be able to get funded,” Ryan said. “We were literally a quarter point away from getting funding. It was that close.”
As for now, Real America plans to start construction of the market rate portions in mid 2022 with an opening in fall 2023.
The affordable portion will be six months behind that if the project gets off the waitlist, or a year behind if it wins the credit next year.
Contact Jakob at jlazzaro@wvpe.org or follow him on Twitter at @JakobLazzaro.
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