Building homes together
Public-private partners developing Waupaca neighborhood
By Robert Cloud
Located near the Waupaca Municipal Airport, Eastgate Estates is a residential subdivision that provides jobs and training for at-risk youths and homes for low and moderate income families.
Since the first home was finished in May 2010, the CAP Services’ project has completed seven homes and is currently constructing an eighth house.
There are also three market-value homes in Eastgate Estates that were built by private contractors.
CAP Services has sold six of its seven completed homes.
The remaining house will be sold to a family with a household income at or below 80 percent of Waupaca County’s median income, which is $45,750 for a family of three, according to CAP CEO Mary Patoka.
One reason the homes are more affordable is that they are built by Fresh Start, a CAP Services project that provides employment and training for young adults.
Fresh Start teaches participants the basics of construction, beginning with how to use hammers, saws, drills, measuring tape. By the end of the program, participants know how to build the framing, walls, roofing and finished carpentry in a home.
Fresh Start also helps participants earn their high school equivalence degrees and develop a productive attitude about their work.
“Currently, there are 17 enrolled,” Patoka said. “There have been 92 young people – aged 16 to 24 – served in the Waupaca Fresh Start program since its inception in 2009.”
Each single family home within the subdivision must be a minimum of 1,200 square feet. Fresh Start homes average between 1,400 and 1,500 square feet, while the market-value homes are larger than that.
“The average price of Fresh Start homes is $130,000 to date,” Patoka said. “We are trying to apply any subsidy we have against the purchase price to make it affordable, and help families realize they could get into home ownership. This means the sale price might be closer to $115,000.”
Every home buyer must secure a first mortgage with a conventional bank, the Federal Housing Administration or the U.S. Department of Agriculture.
CAP uses some of its capital for the second mortage, that is designed to lower the monthly payments to meet HUD’s guidelines of no more than 30 percent of income should be spent on housing.
The sources of the funds for second mortgages come from the Federal Home Loan Bank of Chicago and the Wisconsin Department of Administration-Housing.
Eastgate Estates is located in the city of Waupaca’s TIF District 8.
“The TIF was struggling and the city looked for ways to turn things around,” Patoka said. “When retail development was stalled in that area, the city sought out CAP to see if development of housing was a good match,” Patoka said.
Of the 63 lots available in Eastgate Estates, 20 are set aside to be sold to households with less than 80 percent county median income.
The development of the subdivision included debt CAP took on for the infrastructure. CAP applied for Community Development Block Grant funds as well to finance the project.
“It’s some of this financing that requires one-third of the lots be developed specifically for low to moderate income households,” Patoka said.
The Developer Agreement also outlined what the city would be responsible for and what CAP would be.
The city provided the land, the CDBG grant and street lights. CAP financed all the infrastructure – streets, water, sewer, curbs – at a minimum investment of $1.2 million.
The additional property taxes generated by the new homes will be used to cover the city’s costs for the project.
In addition to being located in a TIF District, which helped subsidize the project’s intial costs, CAP Services has received funding from a variety of public and private sources.
The Waupaca Area Community Foundation, the Community Foundation for the Fox Valley Region, individual donors and local businesses have all contributed to the project.
Patoka said the collaboration of private and public organizations makes projects like Eastgate Estates feasible.
“CAP has historically sought out partners in both the government and private sector to meet the needs of low and moderate income families in our communities,” Patoka said. “We sometimes can do what is too risky for government, but also what might not be profitable enough for the private sector.”