Two Milwaukee nonprofit groups that have led efforts to create affordable housing for people with lower incomes are planning to develop homes on 90 vacant central city lots starting in 2023.

Milwaukee Habitat for Humanity Inc. is partnering with the Community Development Alliance on the housing initiative, which will be in an area bordered mainly by West Vliet Street, West North Avenue, North 13th Street and North 27th Street, according to a city report. There also are two south side lots.

The project won an endorsement from the Milwaukee Redevelopment Authority Board, which on Thursday approved selling authority-owned lots for $1 apiece. That sale also needs Common Council approval.

The idea is to create first-generation homes for Black and Latinx families who are currently priced out of the market, said Teig Whaley-Smith, Community Development Alliance chief executive. The alliance is a coalition of nonprofit groups, commercial lenders and others.

The goal is to build each house for $200,000, and sell it for $110,000, Whaley-Smith told authority board members. With $10,000 in down payment assistance from the alliance, the homeowner would have a $100,000 mortgage, he said.

That provides an opportunity for those lower-income families to build inter-generational wealth, said Ald. Russell Stamper, whose district includes the north side sites.

Also, increased housing stability leads to good outcomes such as lower high school dropout rates, less crime and better job opportunities, Whaley-Smith said.

Construction of the owner-occupied houses could be funded in part with federal grants provided through the American Rescue Plan Act, as well as state and federal affordable housing tax credits and federal New Market Tax Credits, according to a city report.

The authority board also approved a proposal to allow the Community Development Alliance to borrow $6 million from investors through the sale of tax-exempt Redevelopment Authority bonds.

The alliance could use proceeds from the bond sale to help finance the construction of up to 120 homes on vacant city-owned lots, including the 90 lots being sold.

The tax-exempt status for investors buying the bonds translates into a lower interest rate paid by Community Development Alliance to borrow the money. The authority would serve as a conduit on the bond issue and carry no financial responsibility for making those payments, said David Misky, authority assistant executive director.

Milwaukee Habitat for Humanity has built over 500 homes since 1984, and in 2021 announced plans to build 80 new houses over four years in the Harambee neighborhood.

The Community Development Alliance in September received a grant from Wells Fargo Bank to help capitalize a fund that will be used to purchase Milwaukee homes and resell them at affordable prices to city residents.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Habitat, Development Alliance building homes on 90 Milwaukee lots