Stimulus funds revive Chester housing projects

A much-needed shot of recovery funds from the federal government will help to move forward two low-income housing projects for senior citizens in the city of Chester.

The Chester Housing Authority received $13.6 million to build 87 units of senior housing. Separately, the Chester Economic Development Authority was allocated $10.5 million for 70 rental units.

The Chester projects were among five in Pennsylvania that received recovery funds from the U.S. Treasury Department, via the Pennsylvania Housing Finance Agency, a state-affiliated provider of financing for low-income housing.

Holly Glauser-Abel, the finance agency's director of development, said the money would help jump-start projects that had been held up by the recession.

Typically, the finance agency raises money for developers of affordable housing by selling tax credits to private businesses.

But the recession has reduced demand for those tax credits, "completely stalling" many projects, Glauser-Abel said.

She said that with stimulus dollars from the Treasury, developers would be able to swap tax-credit allocations for actual cash.

Lisa Gaffney, housing director for the Chester development authority, said the Treasury funding was the last piece of financing needed to begin construction of Pentecostal Square. The project will provide rental housing for low-income senior citizens.

She added that the construction would create 157 jobs, directly and indirectly.

"Because there are so few investors in the market, the price of tax credits has gone down," Gaffney said. "It's made it hard for projects to go to closing and get started."

While two years ago, the finance agency could raise 92 cents on the dollar for every tax credit it allocated, today it can only garner about 62 cents on the dollar, Glauser-Abel said.

Yesterday's news was part of a round of stimulus spending by the Treasury Department. The agency awarded $309 million to Pennsylvania and five other states to use toward financing affordable-housing projects.

"This initiative will help spur construction and development, create much-needed jobs, and increase the availability of affordable housing for families around the country," said Deputy Treasury Secretary Neal Wolin in a statement released yesterday.

Under the American Recovery and Reinvestment Act, the Treasury Department has $3 billion to use toward financing affordable housing.

Glauser-Abel said about 30 development projects across the state were seeking to exchange credits for cash.

"This is just the first five," she said.

With this round, the finance agency awarded $41 million to projects in Chester, Gettysburg, Erie, and Chambersburg.