icon Breaking Ground

Joaquin Altoro, Wisconsin Housing and Economic Development Authority

11 min read

A Conversation on Innovative State Programs

Exciting things are going on in Wisconsin. There’s a pilot program soon getting underway that will examine opportunities for expanding access to affordable workforce housing. There’s a major research initiative to better understand how Community Development Financial Institutions (CDFI) can be more efficiently used to expand economic development. Yet another effort is underway to create “institutes” that will improve access to supportive services for Wisconsin families and Native American tribes.

Perhaps the most important change taking place is the growing number of minority developers who are getting into the affordable housing business due, in part, to changes enacted by the the Wisconsin Housing and Economic Development Authority (WHEDA) with its qualified allocation plan (QAP) points system.

Leading these initiatives is WHEDA’s charismatic CEO and Executive Director, Joaquin Altoro, who has been at the helm for just over two years. Altoro is also active in the leadership of the National Council of State Housing Agencies, so his ideas have attracted the attention of other housing finance agency executives across the country.

Before he was appointed to lead WHEDA, Altoro was a banker for 29 years, in both residential and commercial lending. He was also a city planning commissioner for the City of Milwaukee, where he was born and raised.

Tax Credit Advisor sat down with Altoro to learn more about these important initiatives in greater detail.

Tax Credit Advisor: How has WHEDA’s corporate culture and approach to meeting its housing goals changed under your leadership?

Joaquin Altoro: WHEDA (pronounced weeda) has a mission and a vision that has stayed constant, which is to stimulate the state’s economy and improve the quality of life for Wisconsin residents by providing safe affordable housing and business financing tools. What has been very important for me these past two years is that we’ve gone much deeper and had a greater focus on helping underserved communities of color and rural areas. I was a banker for 29 years and through my work with CDFIs found that rural communities suffered from the same issues as urban communities of color that I grew up around. Those experiences have made my transition at WHEDA much easier. We’ve worked really hard at improving the internal culture. Banks, foundations and corporations all create resources and tools that can impact a community. I felt that it was really important to know who’s taking their time to work with the practitioners and the administrators of these products. Internally, I knew that if we had a culture that really understood why we do what we do, and we’re compelled beyond just the fact that it’s their job, that was important. So, we’ve been really working hard at creating an ecosystem and an atmosphere of innovation, diversity and inclusion at the workplace.

TCA: How did WHEDA respond to the pandemic? What changes did you make in order to continue fulfilling WHEDA’s mission?

JA: Transitioning 165 employees from an office to a virtual environment was difficult. At the same time, our stakeholders were telling us they needed more affordable housing and supportive services. I felt like we slowed down for only a minute. I can’t tell you how proud I am of the resilience of the WHEDA staff. We got ourselves organized quickly and our portfolio continues to outperform national averages. During the pandemic, we introduced several innovative engagement opportunities. We provided risk and compliance training for property managers to help them understand their responsibilities. We started providing first-time homebuyer classes via webinar and working hard to improve African-American and Latino homeownership opportunities. There’s a major research initiative underway to better understand CDFIs. There are 19 of them in Wisconsin and most are very small. For CDFIs, or nonprofit banks as I call them, to have an impact with under-represented and under-resourced communities, we had to learn about them and understand their needs, so that we can build their capacities. We’re also creating an institute that will bring together municipalities, developers and supportive service agencies to collaborate and find new ways to create better supportive housing. We presented a series of sold-out webinars to discuss the institute. Next, we’ll survey our stakeholders to guide next steps and ensure that we’re providing the right resources to the right people. We expect the institute to be up and running by the fall. Lastly, we’re going to create a second institute for our Native American tribes. We have 11 tribes in Wisconsin. Their needs are a little bit different but the idea is the same, which is to come in to effectuate and actualize real supportive housing goals.

TCA: Housing Finance Agencies (HFAs) have received millions of dollars in funding through the American Rescue Plan (ARP) to help families who are still struggling. How will WHEDA be using these funds? When do you expect to begin taking applications?

JA: Thank you for that question. I believe we are one of the few HFAs that are a little bit different. As an independent housing finance authority, we do not administer any state General Purpose Revenue (GPR) dollars. Most of our ARP funds, such as the emergency rental assistance, will be administered by other agencies. WHEDA administers several hundred emergency housing vouchers provided by HUD. We may be in line for some additional program funds, but we’re still having those conversations. As for emergency rental assistant funds and funds for foreclosure remediation those are going through our Department of Administration.

TCA: As you know, the foreclosure moratorium expires in a few weeks. Are you at all concerned about the impact this will have for Wisconsin’s renters and homeowners?

JA: I am very concerned, but WHEDA’s loan portfolio focuses on a real, specific niche, which is first-time and low- to moderate-income homebuyers. Thanks to a combination of factors, including our extensive homebuyer education process, in-house servicing of our forbearance efforts and working with individual borrowers, WHEDA’s portfolio is significantly outperforming national benchmarks. However, that does not stop us from our responsibility to be a part of the conversation and to be actively engaged with groups throughout the state to ensure that we’re protecting homeowners and renters.

TCA: What kind of developers do you tend to work with? Does that include out-of-state companies?

JA: It’s our privilege to work with a very strong network of state-based developers, but there are some national and regional developers working here too. A special area of focus for us involves emerging developers. What we’re hearing, as we go into rural communities, it’s the perfect storm of scenarios as to why we can’t get development off the ground. One of the things that they’re saying is ‘we just can’t attract developers’ and so I feel that it’s incumbent upon us as a HFA to increase the cadre of developers. We are starting to see an increase in national developers who are coming to Wisconsin to create more affordable housing.

TCA: What multifamily financing programs administered by your office are most popular with affordable housing developers and why?

JA: WHEDA’s administration of State and Federal Housing Tax Credit programs is our most effective tool to advance affordable housing. We also issue housing revenue bonds that provide gap financing and administer federal housing trust funds, among other tools. Some of those gap providing tools have been very popular, especially now when we’re seeing increases in lumber prices and other materials.

TCA: Over the past few years, there has been a movement within state and city governments to expand access to affordable housing for middle-income families, so-called “workforce housing.” What is your office doing in this area?

JA: Workforce housing, like affordable housing, has so many different meanings. We try to teach the community at-large that we consider everyone that we house as workforce. Even if residents are at the lower end of the income strata, they have a job and it’s important to recognize that. WHEDA started using the term ‘affordable workforce housing’ because there’s a stigma that people put behind ‘affordable housing’ or ‘low-income housing’ that’s so unfortunate. Every community has a need for folks at different income levels. It’s important for us to make sure that when we speak about this, as I am with you, that words do matter. The shortage of affordable workforce housing in rural Wisconsin poses far-reaching challenges. The factors contributing to the shortage are many. Zoning. A lack of developer interest. Financing challenges. In response, we started something called the Rural Affordable Workforce Housing Initiative. Despite having a need for workforce housing, we often see funding sources left on the table. The question became are we lacking in tax credits, or gap financing, or are there other issues? We allocated $10 million for the initiative, which includes a pilot effort in three rural communities, as well as supplemental financing tools. While the supplemental financing tools tackle technical gaps in existing programs, the pilot establishes an adaptive framework to identify needs, evaluate choices and implement solutions. To succeed, the pilot initiative requires the support and participation of many partners. We worked very hard at bringing non-usual suspects to the table. It wasn’t just about municipalities, developers and financiers. We asked ourselves, who else does this effect? So, we invited the medical and educational communities and employers. It has been a real game changer involving these other parties, because then everybody has a mutual understanding of the problems and priorities going forward. The workforce housing pilot involves three phases: research and community engagement, idea generation and last is implementation. Each phase will take about two months for a total timeline of six months in each of the three participating communities. We hope to complete the pilot by the fall of 2022.

TCA: Under your leadership, WHEDA updated its allocation plan to increase opportunities for developers of color to qualify for housing tax credits. What prompted this initiative and how is it working out?

JA: A significant amount of resources end up going to places where we don’t have wealth creation or sustainability. Where we see increases of poverty, health disparities, education disparities, in my heart, I know that if we can get at this kind of conversation of wealth creation, or the sustaining of wealth, there might be an ability for us to have an impact on the bigger picture. There are big dollars gained in development, so how can we raise the tide for all? How do we have others that are underrepresented in this field participate? I participated in a program 15 years ago called ACRE or Associates in Commercial Real Estate. It was created to get more people of color involved in commercial real estate development. Now that I am leading WHEDA, I’ve put in a significant amount of time supporting ACRE. Several years ago, WHEDA started awarding points for projects where a majority developer partnered with a minority developer. Out of 50 or 60 applications, only a few people elected to use those points. There was no solid relationship between the developers. When the project ended, so did the relationship. It was a start, but it was not enough. More recently, WHEDA decided to award points if there was a shared equity ownership between the majority developer and minority developer. Now, because they are going to be married to each other for 15+ years, the majority and minority developer are taking time to know one another. They work equally as hard at investing in each other, which is exciting. It’s what we wanted to see. The application numbers are crazy. In 2021, 29 of the 54 (Low Income Housing Tax Credit) applications sought these points and overall 19 of the 33 awarded projects reflected minority developer collaboration. In 2020, only three awarded projects out of 35 had co-minority developers. What’s even more important is that four of the 18 projects awarded in 2021 with a minority developer are located in rural parts of the state. People of color represent ten percent of Wisconsin’s population. When you’re out in the rural areas, it’s maybe one percent or less. We are seeing developers of color going outside of their boundaries. When we look at the modern-day conversation of segregation and people staying where they feel comfortable, for developers of color partnering and trying to do rural development—and the influence of the QAP in making this happen—is impressive. This is a game-changer. Other HFAs award points for these partnerships, but the responses have not come close to what we’re seeing in Wisconsin.

Darryl Hicks is vice president, communications for the National Reverse Mortgage Lenders Association and a 24-year veteran of associations managed by Dworbell, Inc., the management company of NH&RA.