by John Gessner
Thisweek Newspapers

A $6.3 million renovation has been completed at Chowen Bend Townhomes in Burnsville, making life more pleasant for the low-income families living there.

The 26-year-old complex south of Highway 13 near Savage has been preserved as Section 8 housing, despite the costly upgrade.

Like many aging units built with Section 8 subsidies, Chowen Bend could have been converted to market-rate housing. But a company that specializes in affordable housing bought the property and leveraged a new round of subsidies to complete the upgrade.

With improvements inside and out, Chowen Bend will continue to serve low-income families for at least 30 more years.

"There aren't a lot of federal dollars for affordable housing these days," said Mark Ulfers, executive director of the Dakota County Community Development Agency, a key partner in the project. "So it's really important to preserve the projects that we have."

Chowen Bend was built under an old federal Housing and Urban Development program that subsidized many new projects in the late 1970s and early 1980s. Chowen Bend had a 25-year contract to provide Section 8 housing, Ulfers said.

"2006 comes along, and unless you get a financing package put in place that allows affordability to continue, it would revert to a market-rate project with no affordability," Ulfers said. "It's happening around the country in many instances. These projects, when they come up for renewal, are converted to market rate."

Instead, Minneapolis-based Dominium Development and Acquisition bought the 4-acre property in 2006.

"Our primary focus is affordable housing in the Upper Midwest," said Mark Morehouse, a project manager for the company. "The Chowen Bend project is typical of what we look at – either building new affordable-housing projects or acquiring older affordable-housing projects and fixing them up."

About 45 percent of the $6.3 million renovation was subsidized, Morehouse said. Most of the subsidy came from HUD's Low Income Housing Tax Credit program, which incents private developers to invest in affordable rental housing.

Developers are awarded tax credits that are then sold to private investors to raise capital for upgrading aging properties.

The CDA administers the program in Dakota County. In addition to the tax credit, it awarded a $250,000 loan from another HUD program. Dominium also secured financing from the Minnesota Housing Finance Agency and private lenders.

The money paid for new roofs, siding and windows for the eight Chowen Bend buildings. Interior renovations included new appliances in each unit, with the addition of washers, dryers and dishwashers.

And a community building was added, where residents have access to on-site programs and outreach services.

"These units went from looking like a barracks to looking like something you'd want as a neighbor," Ulfers said.

The Section 8-subsidized rents are $845 and $895 for two-bedroom units and $1,095 for three bedrooms.

"And we have a waiting list," Morehouse said.

The CDA is assembling similar financing for another Burnsville townhome complex, Cliff Hills. Work on the northeast Burnsville complex will begin in late spring or early summer, Ulfers said.

The Rosemount Green complex in Rosemount is also being rehabbed, he said.

John Gessner is at burnsville.thisweek@ecm-inc.com.