Special Tax Credit Round for Marinette County

WHEDA has announced a special round of tax credits intended to create more workforce housing in Marinette County after U.S. Navy awarded a new contract to Marinette Marine Corporation (MMC) which will create more than a thousand jobs. 

The concern is that all the new employees will flood the housing market, creating housing shortages.  Although the linked press release doesn't mention it, a different e-mail announcement included an executive summary of a report on Marinette housing market by Baker Tilly.  Baker Tilly only looked at actual MMC jobs, ignoring multipler effects (i.e. increased employment elsewhere in retail, restaurants, medical, etc.) and estimated that of the 923 MMC new employees, slightly over a third of the employees will live within the community, or 350 workers.  Of that 350, 83 would rent and 232 would own, creating a shortage of 82 rental units and 90 homeownership units.  Baker Tilly suggests the construction of 24-40 family tax credit units and 60-70 market-rate units.  WHEDA offers incentives for mixed-income housing, a mix of tax credit units and market-rent units that could be used to meet both categories.

The most intersting thing to me about this is that because WHEDA considers this unexpected and special circumstances (the influx of 500 new workers in 2011 and 2012 alone), "The Current Qualified Allocation Plan allows WHEDA to waive any conditions not mandated by Section 42 to address unforseen circumstances, and determined by WHEDA to be in the best interests of the citizens of the state of Wisconsin."

Essentially, WHEDA is saying they can toss out any scoring requirements that are not mandated by the federal tax-credit program.  The 2011 Qualified Allocation Plan outlines the scoring categories.  The question is, what will WHEDA toss out?  Given this is in response to a workforce housing shortage, one might argue WHEDA might be justified to remove the scoring categories for elderly assisted living or supportive housing for persons who are homeless, or are at risk of being homeless.  But they might be hard-pressed to explain why it would be necessary to waive those for energy efficiency, Universal Design, Large Families, etc.

One thing that should be kept in mind is that not all new tenants of those new units would be MMC workers; it's inevitable that employees with higher wages will be more desirable for current landlords and will push out those in the workforce with lower wages ("renting down" effect).  Some of the new tenants could very well be those who used to live in market-rate housing that are now occupied by a new employee.