ALLENTOWN, Pa. — A developer’s plans to build an affordable housing complex in downtown Allentown could be about to get a big boost from the city.
Allentown City Council’s Community and Economic Development Committee last week recommended approving Cortex Residential’s request for $2 million to help fill the project’s funding gap.
- An Allentown City Council committee recommended investing $2 million of the city’s ARPA funds in an affordable housing project
- Cortex Residential plans to build a four-story complex with 52 affordable units at 40 S. 8th St.
- Securing $2 million in city funding is “critical to the project,” Cortex principal Jonathan Strauss said
Committee members said the full council will discuss the proposal at its July 19 meeting and how to spend the city’s remaining funds from the American Rescue Plan Act, which sent $57 million to Allentown.
Allentown City Planning Commission granted conditional approval in mid-June for Cortex’s plans to build a four-story complex with 52 affordable units at South 8th and Walnut streets.
The project, which will cost about $22 million, would be primarily funded with federal and state tax credits for building low-income housing, Cortex principal Jonathan Strauss told the council’s committee June 28.
Strauss said he is “highly confident” the project will secure about $15 million in tax credits. The developer said he’s secured other funding to close the project's funding gap to about $3 million.
“We have been talking about this forever, about affordable housing. We've tried every which way to get people to invest. We want it here. We need it here.”Allentown City Council member Candida Affa
Securing $2 million from the city’s ARPA funds is “critical to the project,” Strauss told the committee. Getting that funding from the private sector would force Cortex to raise rents, “which we’re not going to do,” he said.
Affordable housing: 'We need it here'
Cortex plans to demolish the parish house next to Life Church on South 8th Street to make more room for the affordable housing complex at the corner.
The historic church — formerly St. Paul's Evangelical Lutheran Church — would not be touched as part of the project.
The proposed project would be across South 8th Street from City Center's Center Square Lofts, a market-rate complex.
The new complex is being designed with an “elegant, classy” exterior so people won’t be able to tell which is affordable housing, Strauss said.
“We don't want folks to feel that they're going into a building that's inferior [to] others,” Allentown City Council member Santo Napoli said in support of those plans.
“While we are very candid about the fact that we're a for-profit business — you know, we have overhead and we have administrative expenses — we also are very much mission-driven in the way that we conduct ourselves and conduct business."Cortex Residential principal Jonathan Strauss about the company's focus on affordable housing
Council member Candida Affa threw her full support behind the proposal, saying the city “desperately” needs affordable housing units.
“We have high-end apartments all over town,” she said. “We certainly need this.”
Allentown should be using its money from the American Rescue Plan Act to “enhance our city” by funding housing projects and supporting proposals that create jobs," Affa said.
“We have been talking about this forever, about affordable housing,” she said. “We've tried every which way to get people to invest. We want it here. We need it here.”
Vicky Kistler, who leads the city’s department of community and economic development, said the project has the “full support” of Mayor Matt Tuerk’s administration.
'Really, really good for our city'
Many of the complex’s 52 units would be set aside for residents who earn 20% of the area’s median income, or about $14,000 per year, Strauss said.
The building also would include units for residents in the 40%, 60% and 80% AMI income levels.
Cortex plans to build 45 one-bedroom apartments that offer residents 700-850 square feet of space, and seven two-bedroom apartments that will be about 1,200 square feet, Strauss said.
Affordable housing projects do not generate a “tremendous cashflow,” Strauss told the committee, adding he expects the South 8th Street complex would generate only about $40,000 a year after accounting for operating expenses and debts.
Strauss said he decided to build affordable housing after seeing residents clamor for low-rent units during his six-year stint working for City Center.
“That showed us the demand that's there, and it showed us the good that we could do while also running a business,” Strauss told the committee.
“I've listened to so many passionate stories and testimonies about the importance and the need for affordable housing. And to see a project come right now, I think, is really, really good for our city.”Allentown resident James Whitney
“While we are very candid about the fact that we're a for-profit business — you know, we have overhead and we have administrative expenses — we also are very much mission-driven in the way that we conduct ourselves and conduct business,” he said.
Several residents, including James Whitney, spoke June 28 in support of the proposal to spend $2 million of the city’s pandemic-relief money on the affordable housing project.
“I've listened to so many passionate stories and testimonies about the importance and the need for affordable housing,” Whitney said. “And to see a project come right now, I think, is really, really good for our city.”
