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Developer outlines low-income housing tax credit plan for Wind River site at 305 West Third
Summary
A developer and consultant summarized options to redevelop the city-owned Wind River property at 305 W. Third St., pitching a Low-Income Housing Tax Credit (LIHTC) project with options for a market-rate share and explaining income-averaging rules and investor thresholds.
City staff and developer representatives briefed the council on Aug. 12 about potential redevelopment of the Wind River facility at 305 West Third Street and alternatives for housing on the site.
Joe Dunn, representing the developer Jeffers, said the team initially proposed a Low-Income Housing Tax Credit (LIHTC) project and has analyzed scenarios that would include a market-rate component. "One of the things that led us... to propose a fully affordable development is when we look at the market study for the Marshfield area," Dunn said, noting that reported market rents closely align with 80% of area median income (AMI) in the consultant’s study. He said the developer modeled income-averaging options and investor underwriting thresholds.
Dunn said he and his team investigated investor tolerance for market-rate units inside a tax-credit deal and found a common underwriting threshold of about 20% market units within an otherwise affordable development. "Of the 82 units, 20 of those would be market," he said as an example of a 20% scenario. Dunn explained that including market-rate units reduces tax-credit equity and requires more debt to replace lost equity, which can increase financial risk for the project.
Dunn and consultant Jackie Mish explained income-averaging rules that allow an average unit restriction equal to 60% AMI if some units are higher (for example 80% AMI) and others lower, but that averaging is not available if the project includes market-rate units. They also reiterated that HUD’s 30% standard for affordability is a goal for tenant housing cost burdens; rents in LIHTC units are set so that typical tenants pay no more than about 30% of income.
Councilors asked technical questions about unit mix, whether tenant incomes are rechecked over time, and whether household income (including roommates) is used for eligibility. Dunn clarified that unit restrictions are set in the regulatory agreement at financial closing and that tenant eligibility is based on household income at move-in; later income increases generally do not trigger unit reclassification.
No formal action or vote on the redevelopment was taken; the presentation served to update council and staff as negotiations and financial analysis continue.
