It began in 1994 with one staff member and a goal to develop affordable housing in the Diocese of Rochester.
Fifteen years later, Providence Housing Development Corp., an affiliate of diocesan Catholic Charities, has 45 staff members, has secured $115 million in funding for 758 housing units, has leveraged $25 million in affordable mortgages for 400 first-time homebuyers and has supported nearly 300 families with members who are in recovery from addictions.
Yet the economic slowdown has recently slowed three projects in development stages, as Providence and other affordable-housing developers have had a hard time raising capital through the sale of federal affordable-housing tax credits.
In a booming economy, private investors buy the federal tax credits below face value from affordable-housing developers, and the private investors then are able to use the credits to offset what they owe on federal taxes over a 10-year period. However, in a slower economy, private investors may not owe as much in taxes, offsetting the need for the credits.
Yet Providence is facing this current problem the same way it has dealt with other funding issues: using creativity to find new ways of funding projects, according to executive director Monica McCullough.
“A lot of our traditional investors have been banks,” McCullough said. “What we’ve been doing is trying to identify different investors.”
Providence also is hard at work trying to create a revolving predevelopment fund that would cover startup costs for future projects until those costs are funded through affordable-housing grants. A portion of the $75 tickets to Providence’s 15th-anniversary celebration Sept. 15 will go toward the fund. The event at the Rochester Yacht Club will feature a party, silent auction, food, cocktails and music.
In addition to jump-starting the predevelopment fund, the event will celebrate the organization’s 15-year history as an affiliate of diocesan Catholic Charities.
“I’m just a small piece of the 15 years, but I’ve really seen our ability to get into deals become more sophisticated,” McCullough said.
Providence’s roots came out of discussions in 1993 by the Rochester Diocesan Housing Workplan. According to Jack Balinsky, director of diocesan Catholic Charities, Tom McHugh, then executive director of the Rochester Housing Authority, also was instrumental in helping the fledgling organization get off the ground. In addition, he challenged the diocese to build an affordable-housing project on the Pastoral Center grounds as an answer to those who say affordable housing should not be built in their back yards, Balinsky said. That challenge resulted in the construction of St. Andrew Apartments near the front of the Pastoral Center campus.
“Not only do we welcome our neighbors, they are not in our back yard, they are in our front yard,” he said.
Balinsky said while St. Andrew Apartments are a highlight of the organization’s 15 years, a lowlight was the 2004 fire that burned down its West Town Village complex in Henrietta. Fortunately, the fire did not claim any lives, and the facility was rebuilt within months to house residents who wished to return; some chose to move to different facilities.
Another of Providence’s highlights is the Olean-Kennedy project in the City of Rochester, which involved demolishing Kennedy Town Homes and rebuilding the structures as Plymouth Manor for a $12 million project that included 67 family rental units in new townhomes and on scattered sites in the area. The Olean housing development also was demolished to build Carlson Commons, which was a $16 million project that included 77 family rental units in new townhomes and on scattered sites.
“The development reflects a very urban feel and a very attractive feel, not only for the city at large, but for the residents who live there,” said Maggie Bringewatt, Providence’s former executive director, who now works for the for-profit Rochester’s Cornerstone Group, which partnered with Providence on the Olean-Kennedy project. Construction was recently completed on the third phase of the Olean-Kennedy III project, which features 32 family rental units on scattered sites in southwest Rochester.
The completed developments have been Providence’s signature projects to date, Balinsky said.
“It is the most substantial housing development in Rochester in the last three decades,” he noted.
But Providence is not resting on its laurels. Three of its projects are in advanced stages of planning: Union Meadows II, 42 units of one-, two- and three-bedroom apartments in a building in between Union Meadows I and Union Park, Chili; Atwood Park project in Gates just off of Lyell Road, which will feature 33 apartments for seniors; and Northwest Apartments, 23 new single-family homes for rent on scattered sites in Rochester’s Dewey-Driving Park neighborhood.
While the former two projects are waiting for the final pieces of funding to fall in place, the latter project lacks an equity investor to purchase its affordable-housing tax credits, McCullough said.
“We had an investor, but because of the economy, they backed away,” she said.
Bringewatt noted that the current economy illustrates the need for additional affordable-housing development.
“The need continues to outstrip the supply, and the demand continues to grow,” she observed.
EDITOR’S NOTE: For details about Providence’s anniversary celebration, call 585-328-3228, ext. 1433, or e-mail Lfoster@dor.org.