West Racine project may not have gotten funding, even if it was approved

Remember the ill-fated affordable housing project in West Racine? Turns out it may have been DOA even with local support.

The controversial 55-unit building at West Boulevard and Washington Avenue may have had a difficult time receiving grants from the Wisconsin Housing and Economic Development Authority (WHEDA), according to a source close to the project. There's just not enough demand for affordable housing in Racine.

Here's the problem for Racine. It has a sizable low-income population, but it also has a sizable number of low-income housing apartments that aren't being rented right now. You can argue many apartments are in lousy shape, but even newer buildings aren't selling out. That makes for a tough argument for developers trying to bring more affordable housing to the city.

One argument that's out there is the need for three-bedroom apartments to accommodate families. But even that's been a tough sell, considering the fate of the 27-unit Corinne Owens affordable housing project on State Street.

So what's all this mean?

First, developer Heather Hammond may have misread the Racine market when proposing her West Racine plan. (See this story I did for The Daily Reporter on Hammond ripping Racine for turning down her proposal.)

Second, Racine may not be in the market for WHEDA grants in the near future. The city could probably use some assisted senior living, and possibly a well-designed project with three-bedroom apartments in a family friendly area. But straight-up low-income apartments? Probably not.

Third, West Racine residents may have saved the city from a bad project on a prime piece of property. City staff recommended Hammond's proposal and the Plan Commission was leaning in favor of it until hundreds of people voiced their opposition. Setting aside worries about low-income housing (which is important to have in any community), the project may simply have not worked. Nice apartments or not, they're useful if no one rents them.

In that case, a vacant lot - even one with $2 million in debt on it - is more valuable.

WHEDA passes on Corinne Owens development on State Street

The state declined to finance a $5.6 million affordable housing and commercial development named after local civil rights activist Corinne Owens, the developer said Monday.

Damon Dorsey and his development company, the Dorsey Group, had proposed building 24 three-bedroom townhouses and 4,500 square feet of commercial space on State Street next to the Racine Transit Center (map).

The proposal had the support of city officials, but failed to receive funding from the Wisconsin Housing and Economic Development Authority. WHEDA announced its $100 million in affordable housing tax credits on Monday.

Dorsey said WHEDA rejected the Corinne Owens-Reid Square project because of a "weak" housing market. That left Dorsey wondering how the state felt that a city with the highest unemployment rate didn't have a need for affordable housing.

"I knew it could get rejected, but I didn't think it would be because of a weak market," said Dorsey, who is based out of Milwaukee. He added that it was WHEDA who suggested the project include townhouses for people to rent.

The apartments were 2,000 square-feet each, a comfortable amount of space for families in search of affordable housing, Dorsey said.

"We did a market study that showed there was a need for this kind of development," he said. "I guess WHEDA saw it a different way."

WHEDA's decision does not necessarily kill the project, he said.

"There's still the possibility to do a project there, we just have to go about it in a different way," Dorsey said.

Two Racine County projects did get funded by WHEDA. Lincoln Villas in Mount Pleasant received $283,996 for 97 low-income units for the elderly. And, Burlington received $93,469 for 36 low-income units in the Foxtree and Hillcrest apartment buildings.