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Elderly Housing
Madison, New Jersey

Twelve units of housing for the elderly were accommodated on a small site in downtown Madison, New Jersey.

The Borough of Madison is a small, mature, northwestern New Jersey community. As its population of approximately 15,000 people ages (about 18 percent were at least 62 years old in 1990), the demand for affordable housing for the elderly grows. In 1989, the Madison Housing Authority (MHA) determined that, based on its waiting list at the time, new applicants would have to wait approximately 10 years for an affordable unit. And the community had few opportunities or resources to develop additional units for the elderly.

The first obstacle to development was the lack of suitable sites. Thus, when a site in the downtown business district became available in 1992, the housing authority was anxious to ensure that it be developed as affordable elderly housing. The MHA determined that 12 units could be built on the site and initiated a series of meetings with local residents to determine an appropriate design for the structure.

The second obstacle to be overcome before development could begin was the need for a suitable financing package. The housing authority and the local government were both willing to provide some financial support for the project, but they had very limited resources. Madison does not receive Community Development Block Grant (CDBG) funds directly, nor does it qualify as a participating jurisdiction under the HOME program. However, it is in Morris County, which receives direct funding under both the CDBG and HOME programs.

Because funding through the county's allocations is highly competitive, the MHA created a nonprofit Community Housing Development Organization (CHDO) that would qualify for funding through the county's CHDO set-aside of HOME funds (at least 15 percent of the total allocation). The Madison Affordable Housing Corporation was created and certified as a CHDO in 1992. The corporation developed the project and was the only organization that received funds through the county's CHDO set-aside in 1992, 1993, and 1994.

The project ultimately received a $353,000 HOME grant from Morris County, and because the MHA did not develop the project itself, it was able to provide Section 8 project-based assistance (which otherwise would not have been permitted under regulations in effect at the time). This assistance kept the units affordable and helped ensure the financial viability of the project.

In addition to the HOME grant, the project received $90,000 from the county's CDBG funds for site acquisition and a $240,000 grant from the Affordable Housing Program of the Federal Home Loan Bank of New York. Private construction and permanent financing for the project totaled $479,000. The MHA made $20,000 available from its Section 8 administrative reserves. These funds, combined with $30,000 contributed by the local government, covered a variety of predevelopment costs, including appraisals and architectural and engineering services.

The Madison Affordable Housing Corporation contracted with the MHA to manage the project. Residents were selected from the authority's regular waiting list; all have incomes below 50 percent of median for the area. Lease-up of the units proceeded quickly, and the project has remained 100 percent occupied since it was completed in 1994.

The availability of HOME funds was the catalyst for this project, which involved a partnership among the local housing authority, local and county governments, private lenders, and a newly created nonprofit development organization. Their efforts resulted in an attractive and much-needed housing resource.

Contact: Louis A. Riccio, Executive Director, Madison Housing Authority, 201/377-0258

Copyright 1997 - 1998 - 1999 - 2000
Affordable Housing and HOME
National Association of Housing and Redevelopment Officials (NAHRO)
630 Eye Street, NW
Washington, DC 20001-3736
Telephone: (202) 289-3500
Fax: (202) 289-4949