| On September 7-10, over 100 Allied Drive residents, landlords, service providers, government officials, and other stakeholders met at the Boys & Girls Club to engage in a community visioning process to develop a common vision on how redevelopment might occur on the Hawks properties that the city of Madison purchased.earlier this year. The Hawks property are a significant portion of housing available on Allied Drive. On the last day of the process, volunteers from the American Institute of Architects, who had led the process, presented three scenarios for the redevelopment of the Hawks property that incorporated the ideas of the participants from the previous three days. Based on these scenarios, the city of Madison will begin to develop goals and a more specific plan that will eventually turn into a request for proposals that will be released in early 2007 to redevelop the site. As is the case with all large-scale governmental projects, there will be winners and losers created by this governmental action Most of those winners and losers will be residents and landlords from the Allied Drive area. And one of the most important factors that will determine who those winners and losers are will be the impact of the plans on the affordability of future Allied Drive housing units. In this two-part series, The Capital City Hues is examining the issues surrounding affordability and redevelopment through the eyes of six people involved in the process or who have influence over the final outcome. Those individuals are Madison Mayor Dave Cieslewicz, Alderperson Ken Golden, Planning Director Mark Olinger, Community Activist Alice Howard, Madison Police Chief Noble Wray, and landlord Nick Dorneanu. In the first part of this series, we looked at the history of Allied Drive, the people who live there, and some of the present day factors driving the redevelopment. In this second part, we'll examine the factors that will influence affordability during the redevelopment process. ************ Alice Howard, a longtime Allied Drive activist and resident has a vision for what Allied Drive should be when all is said and done. "My vision is to see a community of people who want to live together, want to grow together, and want their children to be productive in our community instead of seeing transience and a place where people are struggling to pay their rent," Howard said. "If the city can build low-income housing, can build single-family housing where people can afford it through rent-to-own, where they can build condominiums that are rent-to-own, where they can build them where people who are in the community right now who have an income that is less than $10,000 per year can afford to live and stay without them being worried if they will be able to pay their rent next month, then I think we can have a community where people just aren't surviving, but where they are trying to live." While Howard has a firm vision of what she wants to see happen, Madison Police Chief Noble Wray recognizes that the greater community is split on what should happen. "This city is stuck on an issue," Wray said. "It is stuck on the issue of what do we do with people in neighborhoods like this. What was fascinating about the Hawks property discussion was that there was kind of a backlash. 'We don't want you to improve this neighborhood because some of the people that are leaving this neighborhood and go somewhere else and make another neighborhood bad.' Then, inside the neighborhood, we have people saying 'Well, we don't want to be gentrified in ways that Lake Point or Vera Court were.' Then you have some people saying there are groups of people who need to leave. So we have this pulling and pushing, and no one really is able to articulate what needs to happen." What does seem certain is that there will be change. "One of our goals has been to achieve mixed-income housing," Mayor Dave Cieslewicz said. "When we acquired the property, we were quite clear about that. We wanted to introduce more owner-occupancy into the area and we wanted it to be mixed income. I don't think anyone thinks high concentrations of poverty are a good place in any neighborhood. The desire all along has been to make it mixed income. Now, I don't think mixed income has to lead to gentrification. We have some advantages in Allied Drive. One is that with the high vacancy rate there, you can maintain current densities and you can go down a little bit and still not displace anyone because the vacancy rates are already high." It appears that in most people's minds, there is a trade-off between the level of redevelopment and the level of affordability. The more the site is touched, the less affordable it becomes. "If you start with the premise that when a neighborhood gets better, the market will generally push both home prices and rental costs up for the tenant or potential homeowner and you say you are trying to improve this neighborhood, you're clearly in the situation where you're creating a risk for the people who are there," observed Ken Golden, the Madison alder who represents Allied Drive. "When I first started working with the residents years ago, if you had to write a two-sentence summary of what their position was, it would have been 'Keep the neighborhood not quite as bad as it is so I can stay here. Make it a little better.' The problem is that can you make a neighborhood a little better? Don't you want to aspire to even more? And so, what I think you see happening is that everyone seems to be getting behind the idea that we can make the neighborhood significantly better." While Mark Olinger, the director of Madison's planning department, generally concurs with Golden, he doesn't firmly believe that redevelopment and affordability are mutually exclusive. "There are a lot of residents who can't believe they can have something more than what they've got now," Olinger said. ";I find that sad. I think one of the things we're going to have to look at is what's the best kind of housing in the best kind of neighborhood that we can give the residents irrespective of income. There are some households who are at very low income level, and, quite honestly, to help them survive, they will need things like getting additional Section 8. We have a small public housing project in the neighborhood, but is there an additional role for the CDA? We're going to need to be very sensitive to that, but I don't want to undershoot what I think would be creating the best neighborhood for the people. And like I said earlier, my sense is if the only way we can provide that affordable housing is in the conditions under which the residents live now, that's not what I want to do. I want to show them there is a different way. It won't be easy and it will take some time. But I think we can do a heck of a lot better than what the existing situation is." One of the biggest factors that will influence the level of affordability is the types of financing that the project attracts. "The easiest way to keep affordability is to find out how many sources of funding you can bring that either don';t have to be paid back or has an interest rate where you're not loading all of that onto the project," Olinger said. "In Madison, some of the non-profits have been very successful in layering financing to make things happen. In some of the projects, you have 5-7 layers of financing: grants from a Federal Home Loan Bank, soft second mortgages from WHEDA and CDBG. It's going to take every one of those sources of funds and more to help make that happen. Our charge will be to find how many sources of funds we can bring into the neighborhood that will help keep repayment as low as possible. How many people can we help bring to partner and help keep the cost as affordable as possible?" Whether the project is publicly or privately financed will also impact the affordability. "It has to be a private sector redevelopment," said Nick Dorneanu, an Allied Drive landlord and chair of the Allied Drive Landlords Association. "Investors will come in and redevelop with their own money, but they would like to make a profit out of it because that is what they do. It might have affordable housing if the city or Dane County has grants to provide subsidies to help some of these people. Otherwise, it's not going to be affordable. The only way it will become affordable is if the city through the CDA comes in and redevelops it as low income housing. If the CDA comes in and puts the money in to redevelop it, it will be affordable because that is what they do. Otherwise, if a private investor comes in, I'm not seeing it." Howard isn't opposed to some redevelopment on Allied Drive. She just feels it is imperative that it is done in a way to support mixed income housing. "They need to revitalize some of the buildings or place them in a land trust," Howard said. "When you think about what people can afford and what they can't afford, use Habitat for Humanity, use the people who are non-profits and are willing to come over and help so that they can keep it at a moderate cost instead of making it astronomical. I think this can be done with mixed income housing. That is not a problem. But they have to have apartments low enough so that the people who are here can stay. But if they make the apartments where the people here can't stay, then it means it isn't going to be mixed income anymore because they will have moved one of the income levels out. So that is defeating their purposes as far as I can see." If there is new construction on Allied Drive, how it is done will affect its affordability. "A lot of other cities have toyed with the idea of using panelized construction where it isn't all built on the site," Olinger said. "You can save a significant amount of money by having it built off-site and then having it brought onto the site. Everyone thinks they are done for single family homes. They're done in townhouses as well. There are modular home manufacturers who will do anything up to $500,000 houses. It's kind of a construction technique. That helps save some costs. You just drop it onto the site, bolt it into place, and finish it off." Affordability can also be achieved through the back door, so to speak. With the high cost of energy absorbing an increasing proportion of household budgets, redevelopment can ease the long-term strain on people's pocketbooks. "Of the four buildings on the south end of the site, and they are all three-bedroom units, we've got three of them that are less than 50 percent occupied," Olinger observed. "But they are centrally heated. So when the heat comes on in the middle of October, if I have one household in there or eight households, I'm paying the same because it is centrally heated. So how can we do things where it promotes energy efficiency? It might give the tenant a little more control over the heat, which Avalon Madison Village does -- every tenant has their own furnace -- so people aren't paying a lot of money in buildings that aren';t weather tight and a lot of the money just goes out the roof or out the window." The level of affordability that will be available in the city's portion of Allied Drive will start to become apparent in roughly six months when the city's plan for its property is completed. "Around February 2007 will be a good time to think about getting to a point of going to a request for proposal," Cieslewicz said. "That will be the next big stage. We now have the general vision of where we want to go. That plan will be refined to a neighborhood plan, which will be specific about where we want to go. And that, in turn, can be converted into a request for proposals. I think targeting February for that is ambitious, but realistic. I want to be very cautious. I would think, realistically, sometime in the next 12 months, between February 2007 and February 2008 work would begin." Ultimately, the level of affordability will be settled through the political process. The Madison Common Council will have to approve any plan that arises out of the city planning process. There are never any guarantees within the political process. "If you look at the way the purchase of these properties were debated on the council floor, I didn't have every vote," Golden emphasized. "There were a number of people who voted against it. The principle argument was that this should be a private sector function. My principle counter argument was that I agreed, but not right now. If you leave it to the private sector right now, you're going to end up with a very bad neighborhood. It will deteriorate a lot more and I don't want to go there." |
| A primer on affordability for Allied Drive residents Affordability and development By Jonathan Gramling Part 2 of 2 |
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| (Left) The Lovell Lane concept was one of three Allied Drive redevelopment designs that were created by volunteers from the american Institute of Architects with input from Allied stakeholders. |
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| (Counterclockwise from top left) Mark Olinger, Nick dorenanu, Noble Wray, Mayor Dave Cieslewicz, Ken Golden, and Alice Howard |
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