Stymied by the housing market crash and increased competition for donations, the state's leader in affordable housing is getting out of the development business altogether. The nonprofit Neighborhood Housing Services, which is building affordably priced rental units in McCall and has sold only three of 20 units in a new Boise complex, will concentrate instead on education and other services, says interim CEO Lynn Cundick.
The decision comes in the wake of difficulties with the Grand Avenue Condominiums in Boise's Linen District. The original plan was to develop the units as affordable housing, but the group did not obtain sufficient federal funds to subsidize construction. The decision was made to upgrade the units to "market rate" housing rather than abandoning the project.
But construction delays and the housing market downturn have slowed sales. The 17 units still on the market range in price from $202,500 to $329,900.
"That's not affordable housing, that's what I classify as workforce housing," says Cundick. "We've decided, based on that experience and based on the market, we're going to sell these units but we won't be developers for the next few years at least. We'll go back to doing what we do best."
That includes mortgage services, public education on home buying and preventing foreclosures, and community projects.
"We're focusing on taking a business approach, and we want to be consistent," Cundick adds. "We'll be modifying job responsibilities to fit with strategic plans."
"We're continuing to lose a lot of affordable housing in the state," notes Bea Black, who, until recently, was interim executive director of Neighborhood Housing Services. Cundick replaced Black in June when she became head of the nonprofit Women's and Children's Alliance. Black had replaced Tom Lay, who left after eight years at the helm and now leads the area's only other affordable housing nonprofit, Boise Valley Habitat for Humanity.
"Prices have come down," says Black, "but still, what is 'affordable' when you consider the costs of financing and maintenance?"
Housing Services board president Tonya Smith, a vice president at D.L. Evans Bank, says the Grand Avenue project was built on a premise that, "no one can afford to live in the North End." The group has a full-time fundraiser but has run into problems raising money.
Smith says there are many groups vying for the same dollars.
According to Black and Smith, federal tax credit dollars for affordable housing in Idaho amount to only about $2 million annually, based on the state's population and demand. It isn't enough, Black says.
"It doesn't matter who you're building something for, the cost is still the cost."