A developer of low-income housing in the Bangor region has been awarded a critical piece of federal assistance that will allow it to complete its largest affordable housing development yet.
As part of the first phase of its project, Penquis is now building a 39-unit, $7.6 million apartment complex in Bangor, on a property just off Broadway between Bangor High School and Broadway Shopping Center. On Monday, the Maine State Housing Authority announced that federal tax credits had allowed Penquis to unlock $6.65 million in private investment to pay for a second, 40-unit complex in the same location. Many of the units will be reserved for seniors.
The Bangor-based organization was able to secure that funding because it was one of four groups in Maine that were awarded support through the federal Low-Income Housing Tax Credit program. Recipients such as Penquis can pass the tax credits onto investors in exchange for them funding the development of affordable housing.
“Without the credits, our investor partners would not have any financial reason to participate in the project,” said Jason Bird, housing development director at Penquis. “It’s a big win for us to be able to secure this, but we know we have a lot more work to do. We have other projects to bring more units of housing.”
The support will also help Bangor as its tries to create more housing around the city and address other problems facing the city’s housing supply. Even though the market value of those new units may rise over time, Penquis will be forced to keep them available to renters who wouldn’t otherwise be able to afford to live in the city, Bird said.
The other newly announced awards went to projects in Portland, South Portland and Waterville, according to the Maine State Housing Authority.
For housing projects to qualify for the program, developers must ensure that at least 20 percent of their units are available to people below certain income thresholds, according to the Tax Policy Center. In addition, Penquis will reserve many of the apartments in the 40-unit complex for tenants who are 55 or older.
Bird estimated that the second phase of the project would cost $7.8 million. To close the funding gap, Penquis will receive additional subsidies from the Maine State Housing Authority and is seeking nearly $1 million from the Federal Home Loan Bank of Boston.
Penquis also received support for the first phase of the project through the Low-Income Housing Tax Credit program, which is offered through the U.S. Department of Housing and Urban Development.
The two apartment buildings will be located on Grandview Avenue near the intersection with Hillside Avenue, on previously vacant land that Penquis acquired from the city of Bangor and the Broadway Shopping Center.