A proposal requiring new apartment developments in and around downtown Milwaukee that receive city funds to include affordable housing has been put on hold until spring.
Rocky Marcoux, commissioner of the Department of City Development, asked the city’s Zoning, Neighborhoods and Development Committee Tuesday to consider postponing the inclusionary zoning ordinance to give his department and developers in the city more time to review it.
“This is a significant change in city policy,” Marcoux said. “There is a lot I like, but I would like more time to work with the sponsors. I would like the development community to look at it as well. I had a lot of panicked phone calls.”
In mid-November, Alderman Robert Bauman introduced an inclusionary housing proposal that would have required all new apartment developments in and around downtown Milwaukee with 20 or more units to set aside at least 10 percent of the project for affordable housing.
The city attorney’s office found the original proposal was illegal and only projects that included financial assistance from the city could have an inclusionary housing provision.
Under the latest proposal, developers receiving more than $1 million in city financial assistance from the city for a residential project would have to provide affordable housing in 20 percent of the units.
Under the proposal, the units must be rented to residents making less than 60 percent of the area’s median income.
The median income of Milwaukee, Waukesha, Ozaukee and Washington counties is $54,336, according to the 2015 U.S. Census Bureau. Sixty percent of that is $32,601.
For a two-bedroom apartment in Milwaukee, the average rent would be about $900.
Developers who don’t want to comply could instead contribute $125,000 per required affordable unit to the city’s Housing Trust Fund.
“This is workforce housing, not low income housing,” Bauman said. “We have substantially cut back the original proposal. I would think this would be non-controversial.”
Alderman Jim Bohl called the plan laudable, but cautioned it could bring an unforeseen set of problems including developers choosing to build in the suburbs instead of the city or requesting more city financing than they would have without the affordable housing mandate.
“Instead of asking for $1 million they will ask for $5 to $9 million of city subsidy and (the taxpayers) are funding that,” Bohl said.
Said Bauman: “That is not a bad thing.”
Bohl also brought up The Couture development, a 44-story luxury apartment tower near the Milwaukee lakefront that will have about 312 apartments, and is getting nearly $20 million in tax incremental financing. The project has been approved, but has not received its building permits yet, which is when the affordable housing requirement would have to be met.
Bauman said because the Couture project has such a large public transportation component, it could apply for a hardship waiver and be exempt from the affordable housing requirement.
