A rendering of the Volunteers of America housing development planned for site of the A.D. Gray School in Waldoboro. The project has been delayed by funding challenges, according to Brian Sites, vice president of business development and implementation for the affordable housing developer Volunteers of America. (Image courtesy Volunteers of America)
Inflation, stalled applications, and the increased unpredictability of federal funding have slowed progress on the affordable senior housing project planned for School Street in Waldoboro, according to the project developer.
“We’re not looking at a very favorable environment right now,” said Brian Sites, vice president of business development and implementation for Volunteers of America Northern New England, the affordable housing developer that plans to construct 36 units of affordable housing for seniors at the site of the former A.D. Gray School.
Sites presented a project update before the Waldoboro Select Board during its Tuesday, March 11 meeting in response to a request from select board member Michael Thayer. At a previous meeting, Thayer said Waldoboro urgently needed housing and he had been fielding questions from residents about the project.
The total expected project cost is currently about $13.5 million, Sites said.
Volunteers of America Northern New England applied for two different sources of federal funding for affordable housing projects last year, but both applications were denied “on a technicality,” Sites said.
The first application, for funding through the U.S. Department of Housing and Urban Development’s low-income housing tax credit program, did not meet criteria for public transportation availability at the site of the development, Sites said. He added there was also a misunderstanding about the accessibility of the units, which also caused the project to lose points, although all units are slated to be fully accessible.
“We’ve since corrected those issues for a future funding round if necessary,” Sites said.
In the low-income housing tax credit program, which is administrated by the federal government, private investors receive tax credits in exchange for investing in low-income housing developments, according to Sites.
The second application was for another U.S. Department of Housing and Urban Development program. The program, called 202, or the Supportive Housing for the Elderly program, provides capital for construction costs as well as an ongoing commitment to subsidizing rent for future senior tenants. This application was also unsuccessful, Sites said.
He added Volunteers of America did not believe that program would necessarily be available in the future based on changes within the federal government’s approach to public funding.
“With everything that’s going on with the federal government we don’t anticipate another 202 round, maybe this year, maybe ever,” Sites said. “That’s very unfortunate, but that’s just how things roll.”
Sites said he also expected other funding sources, like congressional earmarks and other federal housing grants, to decrease in availability.
“We don’t anticipate any more funds coming through (the U.S. Department of Housing and Urban Development), we don’t even expect any more of what they call congressionally directed spending,” Sites said.
Funding challenges are not unique to Volunteers of America, Sites said.
“We have an abundance of projects like this in the pipeline, not just for us but for all affordable housing developers, and a limited number of funding streams coming through,” he said.
However, Sites affirmed that Volunteers of America would not give up on the A.D. Gray project. The organization has experienced multi-year funding searches in the past and still brought projects to fruition, Sites said.
Moving forward, the organization will continue to pursue secondary funding sources, which will not fund the entire project but will slowly grow the pool of available funding and support their applications for future grants, Sites said. This includes a community development block grant for $500,000, an up-to $1.25 million grant affordable housing grant, and the $108,000 in American Rescue Plan Act funding that Lincoln County already awarded the project, Sites said.
The organization is also contending with inflation, which has seen the total expected project cost jump multiple millions of dollars since plans were first formulated around 2022, Sites said.
“We’re trying to keep up with inflation as we’re chasing those dollars,” Sites said.
Sites said he was looking ahead to the next round of low income housing tax credit applications, which will become available later this year and in 2026. Volunteers of America Northern New England is currently focused on maximizing their application for that funding stream while also gathering secondary funding sources, Sites said.
In the meantime, Sites did not supply a timeline for when construction could begin.
“We believe in this project, and I just ask for peoples’ patience,” he said.
