Centre Region townships team up on ‘creative solution’ to save affordable housing units

Centre Region townships have come together in recent months to financially back efforts to save 49 affordable housing units in a Ferguson Township neighborhood.

Last month, Patton Township’s supervisors unanimously voted to allow the Centre County Housing and Land Trust (CCHLT) to reallocate $25,000 in American Rescue Plan Act funds toward efforts that would preserve Sylvan View Estates’ affordable housing status, which it shed on Dec. 31, 2024. The $25,000 was originally meant for the purchase of an affordable housing property in the township.

Patton Township has now joined Ferguson and College townships in supporting the efforts, with those municipalities dedicating $50,000 and $150,000, respectively, in workforce housing funds toward the initiative.

“This is COVID money, so it’s not necessarily coming directly from our taxpayers,” Patton Township supervisor Sultan Magruder said at January’s meeting. “I think we’re all highly supportive of the Centre County Housing and Land Trust, which is why I think we devoted monies toward this entity.”

Located across Blue Course Drive from the Young Scholars of Central PA Charter School, the development was built in the 1990s through the Low-Income Housing Tax Credit (LIHTC) program, which mandated that the homes be income- and rent-restricted based on the median area income for 30 years.

With that time period now expired, CCHLT Executive Director Missy Schoonover said in January that the partnership that owns the development is looking to sell. If the units are sold, their leases could be increased to market rate — a threat that’s already forced out some longtime tenants — or the units could be demolished for the construction of a new, market rate development.

Local real estate developer Ara Kervadjian, who has prior experience developing affordable housing across the county, is interested in purchasing the development and renovating it using funds from the Pennsylvania Housing Finance Agency (PHFA), according to Patton Township manager Amy Farkas.

Kervadjian would then turn the property back over to the CCHLT, which would preserve the development’s affordable housing status for another 99 years — although a tricky application process for the PHFA funding lies in the developer’s way.

To aid in his application and cover “soft costs,” Kervadjian has requested $300,000 from the CCHLT, which has turned toward Centre Region municipalities to help contribute funds. The organization will eventually ask Centre County Government for funds as well.

“People do move a lot within the municipalities of the Centre Region, and that was one of the reasons that we, in talking with the developer, thought that this could be a Centre Region initiative,” Schoonover said at January’s meeting. “If individuals perhaps live in Ferguson, they work in Patton. They work in Patton, they live in College — just a way to make things a little easier so that we don’t lose 49 homes.”

Schoonover also hopes that the efforts toward saving the affordable housing status would “spark the passion” in other developers to build affordable housing in nearby municipalities. Over the next five years, she expects “around 1,700” units across several developments to shed their LIHTC affordable housing designations.

One development that’s already come off of its affordable housing designation is Addison Court in State College Borough, which could be redeveloped into Encore, a building that would contain residential, commercial and office spaces.

“So we’re looking at today’s problem, with these 49 that have already come off, and then we’re also looking ahead to how can we preserve some of those [future developments],” Schoonover said.

Another unique aspect of Sylvan View Estates is that it was built during a short period of time in the ‘90s when the PHFA allowed single family homes to utilize LIHTCs — since then, only multi-family homes have been able to take advantage of the credits.

Tom King, Ferguson Township’s interim manager, wrote in a Thursday email to the CDT that the initiative to preserve the development’s affordable housing status also “aligns directly” with several of the township’s strategic plan goals and objectives, including gaining financial stability and resiliency, planning for a livable community and leveraging partnerships with mission-aligned organizations like the CCHLT to maximize public benefit.

“Preserving existing affordable housing units within Ferguson Township directly advances these adopted policy goals and supports residents who already live and work in the community,” King wrote.

Moving forward, it is unclear how long Kervadjian’s application could take. Kervadjian did not respond to a request to comment from the CDT.

It’s possible, Schoonover said, that in the time it takes Kervadjian to submit the application and receive the funds, the Sylvan View Estates could be sold to another interested developer or investor. But the current owners would prefer to sell to someone who would look to keep the development’s affordable housing status, she said.

“It’s a very creative solution to an ongoing problem,” Patton Township Supervisor Betsy Whitman said in January, adding that she would be proud to contribute toward the preservation of Sylvan View Estates’ affordable housing status, regardless of the township it sat in.