On Thursday, the United States Department of Justice (DOJ) filed a complaint against the City of New Berlin. The complaint arises out of a series of events that led to the City’s denial of a “workforce” housing development proposal made by MSP Real Estate, Inc. (MSP). The DOJ alleges that the City of New Berlin ultimately denied the proposal on the basis of racial discrimination, in violation of Section VIII of the Fair Housing Act.
According to the complaint (which can be viewed here), on March 10, 2010, MSP submitted a development application to construct 180 units of affordable housing in what is known as New Berlin’s “City Center.” The proposal stated that the development would include 100 elderly units and 80 workforce housing units. The development was intended to be financed in part by the Low-Income Housing Tax Credit program, a program that allows a developer to sell tax credits to investors in exchange for the promise that the developer will rent the apartments for below-market rates to tenants who qualify. For this specific development, MSP was going to rent to individuals who made 40 to 60 percent of the median household income in New Berlin. In New Berlin, the median income as of 2000 was approximately $70,000, which means the proposed development would rent to individuals who made $28,000 to $42,000 a year.