Now here's a good idea:
Build rent-to-own affordable housing in struggling neighborhoods. The promise of ownership attracts longer-term residents who bolster neighborhood stability, while the lease protects them from the financial ruin homeowners face when they fall behind on their mortgage.
Gorman & Co., a prominent Madison-area developer, built 30 such units in Metcalfe Park, a troubled Milwaukee neighborhood, in a unique partnership with the city and the Milwaukee Urban League.
Tenants pay below-market rents of between $675 to $825 a month while building up equity so that, at the end of 15 years, they can buy their homes at a markedly reduced price.
Why not try it in Madison?
To be sure, rent-to-own housing isn't for everyone. But if Madison were to put together a medley of affordable housing programs covering the disparate needs of various populations - the destitute, single moms, young workers and the handicapped - this option would be a fine addition.
Rent-to-own, however, is not in Madison's mix. Neither is Gorman & Co., one of the state's largest affordable-housing builders. That's a problem. A big problem.
The city has managed to alienate exactly the sort of developer it needs to build housing for people still striving to reach middle-class security.
Not that Madison hasn't worked with Gorman & Co. With the city's blessings, the company used federal tax credits to build the well-received Avalon Village apartments in Allied Drive in 2006. But CEO Gary Gorman is fed up with what he sees as the city's antagonistic negotiating approach to redevelopment projects.
"It's the mentality that developers are the enemy, and we have to stick it to them anyway we can," he says.
Gorman's response has been to back away from new Madison projects and build in communities - Milwaukee and Racine, in particular - where city hall is more supportive. He's done no fewer than 14 projects in poverty-stricken Milwaukee, including two in partnership with the Milwaukee Urban League.
"The big picture is that Madison is a very difficult environment to work in," Gorman says. "We want to work cooperatively with the community, the city staff and the political leadership on our projects. In other cities, you just don't get the animosity, the us-against-them attitude that you find in Madison."
Gorman is still smarting over the collapse of his proposed $84 million mixed-use project on the 800 block of East Washington Avenue (the site of the Don Miller car dealership). In February 2006, a last-minute dispute over the city's tax-increment-financing subsidy sent Gorman packing.
This despite nearly two years of arduous but seemingly successful negotiations with planning panels and neighborhood groups over what promised to be a landmark condo and retail complex on the near east side.
Even Ald. Brenda Konkel, the supposed nemesis to all things business, was backing the Gorman project for her district. "It was very frustrating," she says. "The more I tried to make the project happen, the more the mayor's office and the TIF staff team dug their heels in."
Gorman is still upset with Mayor Dave Cieslewicz and city planning staff for what he considers a highhanded bargaining ploy to reduce the amount of TIF he would receive.
City officials, he says, "figure the developer doesn't have any alternatives after investing so much time and effort. They just try to cram it down. They think you have to take whatever they offer because you don't have any other choice.
"They've done that to other developers," he says, "and the developers just kind of eat it and do the deal anyway. The city thought every developer would do that."
Not Gary Gorman. He says he walked away from the project despite spending $300,000 in pre-development expenses.
"We operate in about 20 communities in four states," he says. "We've never had any community pull something like this."
You get a very different story from city hall, where the mayor's office and city TIF staff say Gorman was trying to enrich himself with city funding, while structuring the financing so that taxpayers would be burned if the project fell apart after construction began.
In the end, the city's Board of Estimates voted unanimously against Gorman's terms. (Gorman maintains his financial requests were misrepresented in the closed-door BOE session.)
Says TIF coordinator Joe Gromacki, "We spent months working through various iterations of the project, which all came down to one thing: Gorman wanted the land for nothing, and he wanted another $3.5 million. He also wanted a non-recourse loan" - meaning he allegedly wouldn't personally guarantee its repayment.
"We tried to make this work," says Gromacki, adding that Madison isn't as economically desperate as other cities and doesn't have to make the developer-favorable deals they do.
"This ain't Antigo. We're not Milwaukee. We're not Racine," he says. "Milwaukee, god bless it, that's where I'm from, needs everything it can get. Madison is in a different situation.
"We've been able to build projects with conditions that protect the taxpayers," says Gromacki. "Those, frankly, aren't Gary Gorman's conditions. So, okay, he can go elsewhere, where they do that."
But Madison can't really afford to lose a Gary Gorman. The universe of successful downtown developers, especially those who weave affordable housing into their plans, is painfully small.
In earlier times, with a different leadership team in place, the city would have found a way to make the Gorman project work. But the Cieslewicz administration hasn't shown that competence.
The current situation is exacerbated by the manifest failure, after four years, of the city's inclusionary zoning program to add affordable housing (see "Mayor Dave's Housing Plan Fizzles," 2/1/08).
With admirable pluck, Madison's Community Development Authority is attempting to fill the void by developing the Hauck apartment site on Allied Drive. But legitimate questions can be asked if a quasi-city agency like the CDA really has the entrepreneurial smarts to make a complicated project like this work.
The same could not be asked of Gary Gorman and his long record of success.
