MLK apartments stalled as costs soar
Key Hartford redevelopment project may be delayed for months
HARTFORD — The ambitious redevelopment of the deteriorating Martin Luther King Apartments near downtown — expected to start this spring — could now be delayed for months as surging construction and borrowing costs have left the project with a $5 million financing hole.
The cost of plans to raze and rebuild the low- and moderate-income rentals in the Sheldon/Charter Oak neighborhood and blend them with market-rate units in a larger, dramatically redesigned complex — has climbed to about $58 million.
“The sources of funding are limited, there are not that many places to go,” said Emily Wolfe, executive director of the complex’s owner and developer Sheldon Oak Central, a Hartford-based housing nonprofit. “There is a lot of support for this project and, so, everyone is rolling up their sleeves and figuring out what we can do.”
The redevelopment of the aging apartment complex would represent the final major piece of a revitalization puzzle envisioned in the 1990s to strengthen Sheldon/ Charter Oak, just a short walk from downtown.
The neighborhood has been transformed by the revitalization of the once-decaying Colt manufacturing plant, the Capewell Horse Nail Co. factory, the Dutch Point housing complex, Dillon — now Trinity Health — Stadium and the Sport and Medical Sciences Academy, a magnet middle and high school.
The rising costs to redevelop the MLK Apartments on Van Block Avenue are a striking example of how the fallout from the pandemic has disrupted the supplychain of construction materials and pushed up their prices.
“The supply chain crunch will remain for the foreseeable future so that makes it
difficult to obtain the product, number one, and the price goes up significantly,” Mohammad N. Elahee, a professor of international business at Quinnipiac University in Hamden, said. “And even when you are still willing to pay, you still maybe cannot get it maybe because the ship is stuck at the port. So, it’s a big problem.”
Soaring inflation — a broad, general increase in prices — also has been stoked coming out of the pandemic. That has prompted the Federal Reserve to boost benchmark interest rates, with more likely to come later this year, that affect borrowing costs.
At the same time, Wolfe said the tight rental market in Hartford and the surrounding area has made for slow-going in relocating current tenants of the MLK apartments. About a third to a half of the tenants of the 64-unit complex have moved so far.
The surge in costs is creating new headaches for a redevelopment that seeks to transform the isolated public housing complex, built in 1968, to a vibrant community of 155 units with tenants earning a broad range of incomes.
The mix of apartments initially, at least, was about 60% market-rate and 40% affordable with rents based on income. The approach sought to ensure there would be enough units for those who had relocated and wanted to return once the 18 months of construction was complete. Sheldon Oak also sought to allay worries about gentrification and displacement.
Some of the affordable units included a portion with “Section 8” rental subsidies, not currently offered at the MLK Apartments. Sheldon Oak said that would mean the new development offered a broad range of affordability.
The mixing of incomes in housing development seeks to avoid the dense concentration of lower-income households, which was standard in the late 1960s when the MLK Apartments were built.
Taking on a shortfall
To tackle the financing shortfall, Wolfe said some consideration is being given to increasing the number of affordable units, in an attempt to ferret out more funding. That approach could reverse the percentage split of market-rate and affordable housing in the project.
Balancing the mix of market-rate and affordable units means walking a fine line, according to Michael W. Freimuth, executive director of the Capital Region Development Authority.
For nearly a decade, CRDA has been helping to finance market-rate housing projects in and around downtown Hartford and increasingly in the city’s neighborhoods and surrounding suburbs.
“Some neighborhoods have so much affordable, that two things are happening,” Freimuth said. “There’s no disposable income to push anything else whether it’s neighborhood services, retail, what have you. And you’re going to need private capital to rebuild these neighborhoods, not just public funds. There just isn’t enough of it around.”
Sheldon Oak, which is partnering with Vesta Corp of Simsbury, an owner and developer of affordable housing, is seeking funding assistance from CRDA.
The city of Hartford already has committed $5.8 million to the project.
Hartford Mayor Luke Bronin said he strongly supports the project but he also has been a strong advocate for a robust mix of incomes in redevelopment projects across the city.
“The first most important thing is to make sure every one of the aging affordable units in this development be replaced with quality, new construction that remains affordable,” Bronin said. “I am a strong believer in the idea that income diversity is beneficial to the community and the healthiest way to develop.”
Mirroring the look of Colt
The city has approved the master redevelopment plan for the project, which would borrow from the look of the historic, former Colt worker houses across Van Block Avenue. The design is a stark contrast to the existing stark, brick structures.
The apartments would be a combination of flats and townhouses with one, two and three bedrooms, ranging in size from 774 square feet to 1,683 square feet.
Monthly rents now range from $1,050 to $1,225 for two- and three-bedroom units. Projected rents would rise, ranging from $1,200 for one-bedroom units to $1,800 for three-bedroom units.
The design includes one large, L-shaped central building with flats and an elevator with older tenants and the physically disabled in mind. There would be 14 smaller buildings with six or seven apartments.
The buildings would be arranged around a central green with a gazebo and playscape. All ground floor apartments would have front porches open to the street.
Wolfe said she remains optimistic a solution will be found.
“Everyone recognizes it’s been a rough couple of years,” Wolfe said. “It’s hard enough in normal times, but we’re facing unexpected issues that are going to take a real effort to resolve.”