10 States With Housing Jobs on the Way

How many jobs can $1 billion help create?

That is how much the Obama Administration has distributed to 25 states under a new program designed to jumpstart the stalled construction of rental housing developments around the country. The government hopes the program, part of the American Recovery and Reinvestment Act of 2009, will create thousands of jobs for contractors, engineers, architects and general construction workers, and provide affordable housing options for middle-income families.

Most of the housing developments targeted by the program have been hobbled by the fallout of the recession. Many were put on hold after a primary source of their funding for developers was cut off.

The problem was that the conventional lure to fund housing projects had begun to carry less weight with investors. Traditionally, states’ housing authorities award so-called tax credits to developers for the construction or rehabilitation of affordable rental housing. Developers then sell those tax credits to investors, who can use them to offset their tax liabilities. But as the economy turned sour last year, the demand for these tax credits disappeared – as did developers’ financing, says John McIlwain, a senior resident fellow for housing at the Urban Land Institute, a Washington, D.C.-based nonprofit education and research institute that studies residential real estate development.

Under the program, the 25 states that receive federal assistance will distribute that money among the developers in exchange for their unsold tax credits. That funding should help restart construction on their sites.

But don’t hold your breath in hopes of getting work – or a roof above your head – right away. The money’s journey into the right hands will take time, and most states are unlikely to see construction begin within the next six to nine months, McIlwain says. After that, these projects will take another two years on average to be completed. (That may actually be a good thing, he says, as rental prices are falling now in most parts of the country.)

As more housing units become available in a super-saturated national market, some homeowners may worry that their already-devalued homes will lose even more of their worth. However, many of the states that have received funding so far don’t have a terrible oversupply of housing, says Celia Chen, a senior director of housing economics at Moody’s Economy.com. (Notably absent from the list of government assistance are the states with the top foreclosure rates in the country: Florida, California, Nevada and Arizona.)

Here’s a glimpse at how 10 states are planning to use the Recovery Act funds they have received so far. To see if your state is among the 25 that have received money so far, click here.

Funds received: $34 million
Unemployment rate: 8%
Foreclosure filings: 1/ 1,106 households. Down 32%.*

The $34 million allocated to the state of Connecticut will help work resume at four developments that received tax credits in 2008. Located in Manchester, Westport, Hamden and Norwich, these sites will provide 184 housing units reserved for families who earn up to 60% of the median income in each of these communities, including the conversion of a historic mill building in Manchester into 57 apartments. The Connecticut Housing Finance Authority estimates that 832 jobs will be created for these projects to be completed. “In three to four months we’ll have people working on these sites,” says CHFA President Timothy Bannon.

Funds received: $33.7 million
Unemployment rate: 10.7%
Foreclosure filings: 1/ 951 households. Down 23%.

Twenty-one developments have applied for a share of the $33.7 million received by the District of Columbia Department of Housing and Community Development. Projects include the construction of a 138-unit building for low- and moderate-income senior citizens that will not be completed until 2015 and a complex of 41 live/work lofts for artists that will begin construction by December and is scheduled to open doors in March 2011.