The projected $79.6 million redevelopment of the Loveman Village in Titusville came into fruition last week when the Alabama Housing Tax Finance Tax Authority approved $17 million in tax credits to begin the work.
The goal is to modernize Loveman Village, which was originally constructed in 1951, and incorporate mixed-income housing units, according to the plans from the Housing Authority Birmingham District (HABD).
The tax credit approval comes after several failed attempts, according to HABD Director Michael Lundy. Originally from Cincinnati, Lundy — who served as the director of the Huntsville Housing Authority for 12 years before taking the job in Birmingham — took some time to discuss what the new development will mean for the community of Titusville and other goals he has for improving public housing in Birmingham.
Weld: How was the $79.6 million total reached for the new development?
Lundy: We are working with a developer that has a lot of experience with tax credit initiatives – Hollyhand Development has been doing this for many, many years – so I feel good about having them as the co-developers on this project. They were actually in place before I came to Birmingham.
They’ve done these kinds of deals in the past so they basically add up the cost of construction, engineering, demolition and so on. We’re starting with about 500 units and ending up with close to 220 on site. I’ll have to double check but it will be close to 400 units when all is said and done.
Weld: How will the remaining $52 million be funded?
Lundy: We received the $17 million in 9 percent tax credits. We also submitted for 4 percent tax credits which are not as competitive so we’re looking for another chunk of funds. We got the money from the city. We intend to apply for another round of tax credits so it will probably be another three rounds of credits to complete the project.
Weld: What exactly are tax credits and how are they applied to projects like this?
Lundy: It’s been around I believe since the 1990s. It is a funding approach that has been approved by the federal government, by Congress – both parties – and it’s regulated by the IRS. The way it works is you have wealthy individuals and wealthy groups who are looking for tax write-offs. The way the program works is they make a contribution to the program and in return they are able to write off a percentage of that contribution over the life of the program, which is about 15 years.
For example if a doctor has a good year and he contributes $1 million, he is able to write off dollar for dollar for 15 years. Those funds are then given to the states to allocate to various nonprofits and agencies who apply for these funds. There are a lot of nuances to it, but that’s a way to look at.
Weld: How will these improvements impact the Titusville community?
Lundy: First of all, one thing that is very important to us is that we reduce the density of the property. This property was built back in 1951 and back then the approach was to build as many units in as small a space as possible. All the units look alike. There was an effort, or policy rather, you’re forcing the poorest of the poor all in one community — over the years that’s proven not to be very healthy in terms of the long-term viability of the community, to basically just warehouse this portion of the population in one area.
With the tax credit approach you’re able to use the practice of mixed-income housing where you have families who are kind of tiered in different income brackets so you don’t have people that are at 30 percent of median income. It’s not a situation where everyone who is living there is on fixed income. Depending on the sort of funds you get, you can mix in private sector housing as well. Typically this particular model has worked very well across the country.
We want to change the footprint of the community so that the infrastructure will blend in and will be very well connected to the larger community of Titusville. We don’t want it to look like public housing sitting there by itself. If you look at Park Place, that’s a development that looks like private sector housing, it’s not the traditional public housing approach.
Weld: What happens to the people who currently live in Loveman Village? Where will they be relocated to?
Lundy: They will be moved to other properties that we have and once the project is completed, as long as they are in good standing, they will be able to go back to the units.
Weld: Recently there have been discussions about the future of the Southtown public housing community. Have there been any updates with that process?
Lundy: That’s our next initiative. We want to work with local developers and partners to redevelop that area. Right now we are putting together a request for proposal so we can go out and secure a developer for the project.
Weld: You began work in Birmingham several months ago. Now that you’ve established your footing, what are some of the goals you would like to accomplish here?
Lundy: My primary goal, with respect to redeveloping the buildings themselves and getting the properties to look like the rest of the city and blend in seamlessly. That’s very important to us. For me that’s not the major challenge. The major challenge is working with families who are in need of services to help connect them [to] educational opportunities [and] workforce development so they can be more productive and at some point become self-sufficient so that they can move out of public housing within 5 years.
My major goal is to break the cycle of generational poverty and have public housing be a way for people to get connected to job opportunities.
Weld: As I understand it, you used to live in public housing as well. How has that shaped your approach to fighting the cycle of poverty in Birmingham?
Lundy: I lived in public housing for about 5-and-a-half years back in Cincinnati, Ohio. This was many, many years ago. It was a large development just like Loveman Village. Within about 5 miles we had something like 1,500 public housing units in one area. At that time my family was focused on only being in public housing for a short while and when we were able to save up enough money, we moved out. That was always my father’s goal. We looked at it as a temporary living arrangement. One of the things we want to do is get back to that philosophy.
Many years ago public housing was designed for working families. We want to get back to where able-bodied families – we do have seniors and disabled families that we are always going to take care of that way – can become truly self-sufficient. It’s important in terms of the community and it will be beneficial to the larger city because when people are working they pay taxes. I think it’s also important that as parents we provide good examples for our children so that they can understand they need to take care of their families. But that is a major challenge.
Weld: What cooperation has there been with the city on this redevelopment project?
Lundy: We’re grateful for the city of Birmingham, the mayor’s office and the city council. They provided some of the leveraging and funding for this project. The city of Birmingham has also pledged $1.6 million to assist in the redevelopment. Anytime you’re submitting applications for something like this it’s important to have partnerships. Their contribution was a huge part in helping us be competitive and secure this tax credit.