In the late 1980s, Artspace pioneered the use of Federal Low Income Housing Tax Credits (LIHTCs) for artist housing with the development of the Northern Warehouse Artists’ Cooperative. By 2007, Artspace had 14 live/work projects in operation around the country, with several more under construction. All but one of those projects included funding through the LIHTC program. That year, one of those LIHTC-funded developments, Spinning Plate Artist Lofts in Pittsburgh, became the focus of an audit by the Internal Revenue Service, which claimed that Artspace’s artist preference policy violated the general public use requirement of the tax credit law.
“It was a complete shock,” said Artspace President Kelley Lindquist. “Every piece of legal advice we had received previously confirmed that we were not in conflict with the applicable rules.”
The IRS challenge put every one of Artspace’s LIHTC-funded projects in jeopardy, which could have resulted in hundreds of resident artists and their families losing affordable housing, and dealt a crippling blow to Artspace.
But the IRS challenge could have harmed many more people than the artists living in our projects. Across the country, dozens of states were using LIHTCs to fund housing specifically for farm workers, teachers, unwed teen mothers, firefighters and other groups. The potential for impact was severe: millions of dollars in tax credits and thousands of affordable housing units could be lost.
In early 2008, Artspace joined a coalition of national groups to push for legislation to amend the tax credit law. The coalition consisted of members of Congress; state and local officials; the Local Initiatives Support Corporation (LISC), an advocate for community- based development projects; the National Equity Fund, the nation’s largest nonprofit syndicator of tax credits; and others. The goal: to add clarifying language to H.R. 3221, the Housing and Economic Recovery Act of 2008, then working its way through Congress. While incredibly tense days passed as the session wound down, we were ultimately successful.
The amendment read:
A second passage in the bill made the amendment applicable “to buildings placed in service before, on, or after the enactment” of H.R. 3221, thereby protecting all existing and future Artspace projects.
The amendment passed and President Bush signed the bill into law, prompting the IRS to drop its challenge to Artspace.
With artist preference for affordable housing spelled out in federal law, Artspace continued to develop projects and lease affordable space to artists, knowing that the LIHTCs we receive, the housing we build, and the artists we serve are protected by law. The legal clarity we helped define combined with a proven model of affordable housing has opened the door for numerous developers, both commercial and non-profit, to develop artist housing.
THE ARTIST SELECTION PROCESS
Once people understand the law and its protections, they’re often curious about how we put its principles into practice. How does Artspace determine who’s an artist and therefore eligible for affordable housing in an Artspace project?
The first important thing to note is that anyone who qualifies for affordable housing can apply for residency in an Artspace project. An artist preference simply allows us to give priority to artists over non-artists. To ensure compliance with fair housing laws, we are committed to a transparent, well-documented process for screening applicants.
In Artspace’s practice, we begin working with arts leaders in each community two or three years before a project begins the leasing process. Six months prior to the completion of construction, the leasing process begins and the local artists with whom we've been working help us form an Artist Selection Committee (ASC). The initial ASC consists of active artists from the community who are not candidates to live in the project. An Artspace asset manager facilitates the ASC. In screening potential residents, we are not curatorial; that is, we do not judge the quality of work. Instead, we look for three things:
- individuals who have made a sustained commitment to their craft;
- individuals who are excited about participating in both the community of the building and the neighboring community;
- individuals who are comfortable living in a building that may be noisier, more lively, and more social than other rental properties.
Using the applicant’s artist questionnaire and personal statement, a set of guidelines and specific questions during the interview, the ASC scores each applicant to determine whether the artist preference applies.
We’re often asked how we define “artist.” We use a broad definition and do not require that any or all of an artist’s income is derived from their art; but applicants must show that they have a true commitment to their work as more than simply a hobby. We recognize that art can be defined in many ways, and we encourage artists practicing non-traditional art forms beyond those normally thought of as fine arts. Along with painters, sculptors and photographers, Artspace has created homes for performers, jewelry designers, furniture makers, tattoo artists, graphic designers and culinary artists.
For many of those artists, the news of acceptance into a project can be life-altering.
“I felt simply elated!” said April Barnhart, a jewelry artist and resident of Artspace Jackson Flats in Minneapolis. “For me being accepted felt like I had attained a real and tangible goal I was a real artist now. I would finally get to live in a space where creativity was encouraged and not discouraged; a space where every tenant would have some affiliation with the arts and have an understanding of the creative process.”
As we continue to develop affordable housing for artists – we’re at 28 live/work projects now, double the number of 2007 – we see more and more communities and local officials embracing the Artspace model. For cities with large artist communities and high housing costs, such as Seattle and New York, the use of artist preference is helping to stem the tide of gentrification by providing permanent, affordable space for artists who might otherwise be displaced. In smaller cities, artist preference is helping bring artists together to strengthen struggling downtowns and preserve historic buildings, such as schools and factories, that might otherwise be lost to posterity.
LIHTCs and artist preference, working together, are an effective tool for cities trying to retain their artists or to use the economic leverage of creative placemaking to reclaim their central business districts. We think these are important goals and are proud of our role in developing a means of achieving them in communities all across America.