Tommy Washbush
The Tree Lane Apartments at 7933 Tree Lane.
Tree Lane Apartments, above, and Rethke Terrace are set to be sold by a court-appointed receiver to Cinnaire Solutions this month.
After Madison and Dane County finalize the sale of two troubled housing complexes that offer permanent housing with services to people emerging from homelessness, their approach will shift in one major way: far fewer of the units will be devoted to supportive housing.
“We’ve moved away from this model that concentrates supportive units all in one place like Rethke [Terrace] and Tree Lane [Apartments],” says Jim O’Keefe, community development director for the city.
He says the new arrangement at Rethke and Tree Lane will be similar to other affordable properties throughout Madison and, along with new property management, should help avoid some of the problems that plagued the buildings since soon after they opened.
“We’ve moved in favor of what we call a mixed-income approach with a more balanced resident profile,” says O’Keefe. “The provision of support services has proven to be much more manageable with that kind of model, and those properties on the whole have been much more successful.”
At Rethke Terrace, built in 2016, and Tree Lane Apartments, built in 2018, more than 90% of units were originally committed to permanent supportive housing, with residents who often required a high level of services. After the buildings are sold, only about a quarter of units in each will remain dedicated to supportive housing: 11 of 45 at Tree Lane and 15 of 60 at Rethke.
Tenants in the supportive units will continue to be referred through Dane County’s Homeless Services Consortium’s Coordinated Entry List, where a wide variety of organizations collaborate to identify and refer individuals and families facing long term homelessness.
Rethke and Tree Lane were Madison’s foray into a Housing First model that aimed to provide apartments and supportive services for those who had been homeless; they are funded by both Madison and Dane County. But from the start they experienced a high volume of 911 calls and were declared chronic public nuisances.
Officials have been looking to complete the sale of the complexes before the end of May, when operating funds and insurance coverage for the buildings will run out. Madison, Dane County, WHEDA and the Dane County Circuit Court must all approve a sale. A circuit court hearing on the sale agreement is scheduled for May 20; approvals are likely to go before the city council May 21 and the Dane County board May 23. WHEDA’s approval is also in progress, according to O’Keefe.
The buildings' residents will consist of mostly new tenants. Once the future of the buildings was in doubt many tenants moved out, with financial assistance from the city. Most former tenants have found housing elsewhere in Madison or Dane County.
O’Keefe says one of the main reasons Cinnaire was chosen was because its offer, unlike some competing offers, called for reserving some of the units for people who are homeless.
“That was a feature of these properties that we were going to moderate, but we didn’t want to abandon it,” he says.
O’Keefe says conditions at the properties have already been improving since a court-appointed receiver took over June 1 and implemented 24-hour security, among other changes.
“There has been a marked decline and sustained decline in the number of calls for police and emergency services,” he says. While few tenants now remain in the buildings, “those numbers were dropping sharply even before people started looking for and finding housing.”
O’Keefe chalks up many of the issues at the two buildings to incompetent property management by Heartland Housing, which also owned the buildings. Heartland Housing lost control of the properties due to financial troubles and they were put into receivership. Since January, Lutheran Social Services has been managing the properties and will continue after Cinnaire takes over ownership.
“Frankly, they are the first competent property management that we’ve seen since the properties opened,” says O’Keefe. He says Lutheran Social Services has been more responsive to tenant concerns and more attentive to who has access to the properties, as well as better at building relationships with the service providers there.
Cinnaire will take over the two buildings’ outstanding mortgages — $1.15 million at Rethke Terrace and $1.5 million at Tree Lane — and plans to rehabilitate the properties. The purchase price for Rethke Terrace is $3.9 million and a bit more than $3.5 million for Tree Lane Apartment.
The city will contribute about $1.5 million from federal emergency housing funds which must be spent before next fall. Dane County will also contribute about $1.5 million from the portion of those funds they administer. Cinnaire has requested about $2.75 million in low-interest loans and $1.6 million in conventional loans from WHEDA to help complete the sale.
