Allentown Council awards $2M to affordable housing development
Allentown City Council on Wednesday voted to grant $2 million in American Rescue Plan money to Cortex Residential, a private developer who proposed a 52-unit affordable apartment complex near Center City.
But punctuating City Council’s near three-hour long meeting were disagreements between council members and city staff about how they should award American Rescue Plan funding.
In a separate vote, council members tabled a resolution that would have recommended $21 million in American Rescue Plan funding, requesting that the city put $11 million toward “city capital and physical infrastructure to avoid tax increases” and $10 million for “affordable housing, enhancing the city’s housing stock, home ownership and rental legal assistance.”
The resolution is a recommendation but is not legally binding.
Council members opted to table the resolution because it would have taken $5 million that has already been allocated in this year’s budget — some of which may already have been spent — and redirect it toward affordable housing.
“Taking from this year’s budget is unacceptable. We’re almost into August, these funds have been allocated, they most likely have been used,” said council member Santo Napoli. “I can’t even believe we’re having this conversation.”
American Rescue Plan allocations have been a point of contention between City Council members and city staff. While some council members have called on the mayor to outline a process for allocating ARPA grants to nonprofits and other organizations, the mayor has said council should take the lead.
The city received $57 million in American Rescue Plan money in 2021 to support public health, address negative economic impacts of the pandemic, replace lost revenue and invest in city infrastructure.
The city has so far spent at least $30 million of its American Rescue Plan funds: $20 million toward capital projects like sewer lining replacements, $5 million on several new jobs in city departments, and around $5 million combined to local organizations including the Da Vinci Science Center and affordable housing developer HDC Mid-Atlantic.
Despite the contention over the larger allocation, council voted 6-1 to award $2 million for the affordable apartments at 40 S. Eighth St.
Cortex Residential developer Jon Strauss said at a late June meeting that the $2 million would allow the project to move forward and help meet a “tremendous demand” for affordable housing in Allentown.
Cortex would rent units to people who make between 20% and 80% of Allentown’s area median income.
City Council members and advocates lauded the project, which will replace a parking lot and parish house next to Life Church in Allentown.
“We all know the place he’s trying to build is a high-density crime area, and I think the community is going to benefit a lot when this gets built,” said council Vice President Cynthia Mota.
“I want to state how important this project is,” said Pas Simpson, an Allentown resident and anti-gun violence activist. “There’s a growing need for affordable housing.”
Council member Ed Zucal was the only one to vote against the allocation, and said he opposed it because Cortex Residential is a private, for-profit company, which he believed could eventually profit financially from the building.
Strauss has said the apartments will be financed by federal and state tax credits, which require the units to remain at affordable levels for at least 30 years. The $2 million grant from the city will allow developers to meet funding gaps to ensure the project can move forward.