A project to turn a Pearl Street church office into seven apartments that will rent for between $1,150 and $1,900 a month won $79,000 in tax breaks Wednesday from the Erie County Industrial Development Agency, while also raising concerns among the agency's directors about the lack of more affordable units in the flurry of new downtown housing developments.
"To have affordable housing in downtown Buffalo is so important," said Rev. Darius Pridgen, the Buffalo Common Council president and an IDA board member. "This is one of the greatest concerns that I have."
Pridgen's comments were sparked by a $1.8 million project to convert the former St. Paul's Episcopal Cathedral parish house at 128 Pearl St. into seven one-bedroom and two-bedroom apartments, the latest in a series of downtown development initiatives aimed at turning vacant or dilapidated buildings into market-rate housing.
The IDA board, which approved the tax breaks unanimously, did not object to the specific proposal by St. Paul's Cathedral to turn the vacant building into apartments.
But some of the agency's directors used the vote on the project as an opportunity to touch on a broader concern about downtown housing. Pridgen and others noted that the proliferation of market-rate apartments with rents approaching $2,000 a month is pricing many city residents out of the neighborhood.
"That's a lot of money, and greater than a lot of people make on an annual basis," said County Executive Mark Poloncarz. "I'm afraid we've created a community where only the wealthy can afford to live in downtown Buffalo."
Dottie Gallagher-Cohen, the Buffalo Niagara Partnership's president, noted that the transformation of the downtown housing market was a vast improvement that has taken place over the past seven years, breathing new life into downtown buildings that previously were eyesores.
"I caution us not to forget what we're trying to do, which is to create a neighborhood in downtown Buffalo," she said.
The St. Paul's project, Gallagher-Cohen said, is a poster child that shows just how difficult it is to include affordable housing into projects that convert vacant buildings into new apartments. Those projects often are more expensive because of the extensive renovations that are required, making it more difficult for developers to include lower-rent units and still have the development be profitable. The St. Paul's parish house is 120 years old and has been vacant for five years.
The lack of lower-rent apartments in the newer downtown housing projects has been a growing concern for some IDA directors, including Pridgen. The agency has been discussing ways to encourage developers to include more affordable units in their projects, but with little success.
"I don't believe most developers will be able to do this without some sort of help," Pridgen said. "It becomes difficult to make the numbers work."
The St. Paul's apartments, developed in conjunction with the church and Schneider Development, are expected to yield only a 4 percent return on investment for the developers, even with the tax breaks, IDA officials said. Most higher-risk urban development projects target a return of 10 percent to 12 percent.
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