Funds force housing project cutback

There's not enough money to do them all, the agency's executive director said.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The Mercer County Housing Authority is cutting back on the number of homes to be built for sale in its HOPE VI project in Farrell.
The authority board voted Friday to reduce the number of single-family homes to be built in phase two of the project from 14 to five.
It's a matter of finances, said L. DeWitt Boosel, executive director.
The original plans for the HOPE VI project included using federal HOPE VI grant money to build 12 single-family homes for direct sale to low-income, first-time homebuyers in the first phase of the work. Those dwellings are under construction. Nine are committed to specific buyers so far.
The second phase was to add 14 more homes to the list.
Those plans were drawn in 1998 and costs have risen considerably since then, Boosel said, adding that the authority will have only enough money left to build five homes in phase two.
Options
There were a couple of options.
Boosel said the HOPE VI developer, Falbo-Penrose of Pittsburgh, wanted to go ahead with all 14 houses or perhaps do as many as 20 by seeking tax credit financing through the Pennsylvania Housing Finance Agency.
If the authority secured tax credits, it could sell them to banking or other financial institutions needing a break on their federal taxes.
However, that would require filing an application seeking tax credits for the project that would be in competition with other applications. Tax credit regulations require that the new houses would have to remain as rental properties for at least 15 years before they can be sold.
That presents problems with finding money to provide counseling to the first-time homebuyers when the houses can actually be put up for sale in 15 years.
There won't be any HOPE VI money left to do that, Boosel said.
Decision
The board voted to do just five additional homes with the money on hand, he said, adding that the board has left the door open to build more if grant funds can be found to cover the financing.
The board indicated it isn't interested in long-term tax credit arrangements for this part of the HOPE VI project, he added.
The HOPE VI project, designed as Centennial Place, is the replacement of the old 100-unit Steel City Terrace apartment complex on Spearman Avenue.
The project calls for construction 119 new rental units in tri-plexes and four-plexes as well as the single-family homes for sale.
The authority secured a $9 million federal HOPE VI grant as part of the financing. The total project cost is estimated at $30 million.