In what could be a step to cleaning up some of Toledo’s more troubled tax-credit housing developments, the Lucas Metropolitan Housing Authority will explore taking over more than 80 tax-credit homes to help manage the properties and fight vacancy.
The 83 single-family homes are part of three different developments, mainly on Fernwood, Norwood, and Palmwood avenues in the central city neighborhood north of Dorr Street, bounded to the northeast by I-75 and to the west by Smead Avenue. They were built by the Toledo Community Development Corporation, a nonprofit community group.
The houses were built as part of a federal tax-credit program in which local developers can sell tax credits to investors, such as banks, to raise funds for acquisition, rehabilitation, and construction. A Blade investigation this year found vacant tax-credit properties blighting several city neighborhoods — boarded up, stripped of plumbing and wiring, or otherwise gutted, or burned out.
Of the 21 projects built in Toledo since 1997, six have vacancy rates of 25 percent or higher. Internal Revenue Service regulations require the Ohio Housing Finance Agency to inspect the homes at least once every three years, but The Blade found some had not been inspected in six years.
Officials from the Ohio Capital Corporation for Housing, a syndicator of such tax-credit deals, attended an LMHA board meeting on Wednesday to try to persuade the agency that the three projects in question have low debt structures and can generate cash when all the houses are rehabbed and fully occupied.
“OCCH has worked aggressively ... to establish action plans and stabilize operations at each project,” states a letter to LMHA.
Tony DiBlasi, chief of asset management for the Ohio agency, said the 83 houses have only a handful of vacancies now — down from 17 empty houses at one point — and the agency expects to invest more than $700,000 in fixing up houses and paying off debts.
Bill Brennan, chairman of LMHA’s board, said the housing authority should consider acquiring the homes only if it makes sense financially.
LMHA Executive Director Linnie Willis agreed.
“We just have to make sure the deal is financially feasible,” she said. “We don’t want to take on anything that will be a burden for the housing authority.”
Mr. DiBlasi said that although they need some improvements, the three developments — known as Oakwood Homes III, Oakwood Homes IV, and West Central Homes — are in relatively good shape compared with blighted projects The Blade highlighted this year.
“Two years ago, these projects were flowing cash,” he said. “They were relatively good performers.” He told the board that vacancies were a more recent issue.
Other tax-credit projects across the city have not fared as well.
More than 50 houses in the near-downtown neighborhood close to Bancroft and Cherry streets in the Warren Sherman Flats development are in foreclosure.
Toledo officials have vowed to monitor such projects more closely in the future, but fixing existing projects with high vacancy rates is difficult because the tax-credit deals are complex, involving syndicators that broker deals, for-profit investors, community development corporations acting as nonprofit sponsors of projects and managing partners, and others.
E. Mickens, executive director of Toledo Community Development Corporation, said her organization would be very supportive of LMHA stepping in.
“They have a strong presence in our community,” she said. “Who better than LMHA to be a partner in this project?”
Contact Kate Giammarise at: firstname.lastname@example.org, 419-724-6091, or on Twitter @KateGiammarise.