Both properties were part of the City of Madison’s initial efforts to create permanent supportive housing for those who were experiencing homelessness. 715 Rethke Avenue was built first, providing 60 studio apartments for single adults experiencing homelessness after it opened in 2016. 7933 Tree Lane followed, offering 45 two-, three-, and four-bedroom apartments for families that had experienced homelessness when it opened two years later.
The properties, built by Heartland Housing Inc., a non-profit housing provider from Chicago, received financial support from the City -- $1.15 million for 715 Rethke Avenue and $1.5 million for 7933 Tree Lane – as well as from Dane County and Federal Low-Income Housing Tax Credits allocated by WHEDA. The properties were further supported through the use of Section 8 housing vouchers that ensured stable rent payments to the owners.
Despite that assistance and other forms of sustained support from City staff and community partners, persistent deficiencies in property management and financial practices led to difficult conditions for tenants and neighboring residents. In the spring of 2023, Heartland notified the City they were nearing insolvency and wanted to relinquish control.
In June 2023, a Dane County judge placed the properties under the control of a receiver with instructions to improve the daily living conditions for people living there and find a replacement for Heartland. By December, the receiver told the judge he was unable to find a replacement for Heartland. He further advised that funds to operate the sites were nearly depleted. The judge granted the receiver’s request to pursue a sale of both properties.
In the meantime, City staff worked with a variety of service providers to help tenants find other housing options before the properties were forced to close. Currently, only a handful of residents remain at the properties.
The resolutions passed by the Council transfer responsibility for the loans previously made to Heartland Housing to Cinnaire. They also draw on unused federal Emergency Rental Assistance funds from the American Rescue Plan Act to fund a $1,527,600 grant to Cinnaire to help pay for costs related to Cinnaire’s acquisition and rehabilitation of the properties. Additional funds are to be provided by Dane County and WHEDA; the Dane County Board of Supervisors is scheduled to address the matter later this week.
Cinnaire will use the funds only to cover costs associated with units that serve those with household incomes at or below 50% of Dane County’s Median Income ($44,100 for a single person, or $62,950 for a four-person household).
The properties are expected to undergo extensive rehabilitation before reopening to new tenants later this year.
