Construction is under way at Empire and Cook on 172 new apartments for low-income families and seniors.
The apartments are being built through a partnership of public and private entities that one legal expert said is the first of its kind in the state of Washington.
Workers are excavating the site and starting to pour concrete foundations for the apartment complex a short distance south of the Northeast Community Center.
When finished next year, the complex will provide 62 apartments for senior citizens and another 110 units for families.
The senior citizen complex will be known as Heritage Heights, and the family complex will be called Westfall Village.
The $10 million project is being financed through government tax credits awarded to the Spokane Housing Authority. Those credits are being used to raise about $6 million in construction money from investors.
Investors buy the tax credits at a price lower than their face value and then are allowed to apply the credits to reduce their own income taxes over the next 10 years.
The balance of the project is being financed through government grants and a loan from a private lender, according to housing authority officials.
Mike Ormsby, a Spokane attorney who helped develop the project, said the tax credits create an indirect federal subsidy but create a private enterprise model for the development and management of the project.
He said it is the first time in Washington that such a large lowincome housing project has been developed.
The project won a local property-tax exemption to help reduce the cost of rents, he said.
Bill Dillon, director for the Northeast Community Center, said having affordable housing units near the center will help create a better neighborhood environment and make the community center more convenient to the new residents.
Mary Jo Harvey, executive director of the housing authority, said the average rent in unsubsidized apartments in Spokane is now about $529 a month, including utilities, or about 60 percent more than it was six years ago.
Housing at Heritage Heights and Westfall Village will run about $250 to $300 for one-bedroom units of 650 square feet and up to $417 for a four-bedroom family apartment with 1,200 square feet.
The complex will include amenities such as laundry, community meeting space and landscaped grounds.
The tax credits were awarded through the Washington State Housing Finance Commission.
The developer is Bowen Real Estate Group of Portland.