Washtenaw County and the city of Ann Arbor are teaming up to combat the lack of low-income housing downtown.

Community development officials from both the city of Ann Arbor and Washtenaw County are proposing the conversion of three downtown parking lots into future sites for low-income housing. The development will be especially targeted at residents who make 10 to 15 percent of the Ann Arbor area’s median income.

Jennifer Hall, housing manager for the Washtenaw community development department, said the plans are geared towards people who have been displaced by rising rents in the downtown area and the closing of the city’s former YMCA, which used to house low-income residents.

The parking lots, which are all city- or county-owned, are located at the northwest corner of Catherine Street and Fourth Avenue, the southwest corner of Catherine Street and Fourth Avenue and the southwest corner of Ann Street and Fourth Avenue.

City and county officials are planning to replace any lost parking space by either building underground parking lots or additional levels to the parking lot on the corner of Ann Street and Ashley Street.

The housing site would include 60 to 100 single, one-bedroom units, Hall said. She added that the project requires a minimum of 60 units so that the revenue from rent can support various services, like social work and security, for its residents.

Hall said building on city- or county- owned property is economically beneficial because there are no land acquisition costs. In addition, downtown location offers readily available services for special-needs tenants nearby.

The development costs to build 60 units can range from $6.3 million to $10.8 million and $7.4 to $14.7 million for 100 units, Hall said. Service costs range from $5,583/unit per year for 60 units to $4,848/unit per year for 100 units.

Federal tax credits would cover 80 percent of the building’s construction. Rent would be subsidized by project-based vouchers, which are funded by the federal Department of Housing and Urban Development.

Hall said developing low-income housing in a college town like Ann Arbor can be challenging because of the large student population. On the one hand, the high student population actually induces higher rent for downtown living, because students are able to afford rising rent costs. As a result, lower income residents are pushed out of the downtown area.

But by including the student population in the federal census conducted every 10 years, the city and county can get more federal funding for low-income housing.

“When we do our census every 10 years, that includes student housing. On paper students look extremely low income,” she said. “We probably get more money than if they were supposed to take students out of that formula.”

City-county community development officials are planning to continue to work with local businesses and residents within the neighborhoods of the proposed sites and are looking to hold public hearings to address concerns in upcoming months.

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