Appleton affordable housing project could use $1M in ARPA money

Appleton officials voted on Jan. 23 to recommend using $1 million in American Rescue Plan Act money to potentially build a 48-unit affordable housing project in the city’s downtown.

Members of the Appleton Finance Committee recommended using federal assistance to support the Rise Apartments project, which is a 48-unit development on North Oneida Street with 43 units reserved for those who earn 60% of the area median income. The city has $3 million in ARPA funds set aside for affordable housing.

The city agreed to give more than $600,000 in public assistance in 2021 to developer MF Housing Partners through tax incremental financing. The total project cost is over $13.9 million and will likely use tax credits through WHEDA, a staff meeting memo showed.

The project asks for more money because of inflation and escalating costs of construction, Appleton community development director Kara Homan said at the meeting.

Because the money is to ensure the project can stay afloat, Alderwoman Sheri Hartzheim said at the meeting she was concerned about the cost and suggested the project be scaled back.

“I’m curious as to whether the project can be scaled back, rather than using this million dollars to supplement a project we believed was conceptually ready to go,” Hartzheim said. She noted inflation’s effects on the projects and other buildings.

Tom Klister, a developer with MF Housing Partners, said the project wouldn’t move forward without the ARPA grant. “Frankly, ARPA is the only thing that’s making affordable housing being built in the whole state, probably around the whole country,” he said.

“In market rate housing, when all these costs have gone up, rents have gone up ridiculous amounts over the last couple years,” Klister added. “Anyone trying to build anything, it’s challenging how rents are going up. In affordable housing, rents are all capped. There’s got to be something that changes to make these projects still get built. Without ARPA dollars, these projects are not getting built.”

Alderwoman Kristin Alfheim said the proposal was an investment and having ARPA money would help bring more people downtown.

“We’ve had plenty of conversations about our business environment and needing people to live and fill the positions that we have,” Alfheim said. “This is an opportunity for us to lean in with our ARPA funds and help bring 40 families downtown, also alleviate 40 more properties to open at a lower cost point for other people and increase employee opportunities to fill open positions we have in the downtown area.”