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Affordable Housing

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Agencies, Lenders Ramp Up Loan Production for Affordable Housing Properties

by Jeff Shaw

There’s a human factor when it comes to working in the affordable housing industry. Kelly Frank, senior banker at KeyBank, recalls attending a ribbon-cutting ceremony for a scattered-site housing development where a woman came up to her in tears expressing how grateful she was to have a home in a safe neighborhood setting. The ability to make such a positive impact on someone’s life is one reason Frank loves the affordable housing business. “A lot of work is being done to bring affordable housing to every community,” says Frank. “Everybody’s eyes are on it because it’s a resounding theme throughout the country that there’s just not enough affordable housing.” The United States is short 7 million rental units that are affordable and available to extremely low-income renters, according to the National Low Income Housing Coalition. These renters have household incomes that are at or below the poverty guideline, or 30 percent of their area median income. The silver lining is that Cleveland-based KeyBank and other lenders have a large toolbox of financing mechanisms available to combat the affordable housing crisis and facilitate the development and preservation of affordable units. Many loans are processed through agencies, including government-sponsored enterprises such as …

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Hunt Capital, Burleson Break Ground on Phase III of Affordable Housing Project Near Little Rock

by John Nelson

MABELVALE, ARK. — Hunt Capital Partners and Burleson Development LLC have broken ground on Phase III of an affordable housing project near Little Rock. Hunt Capital Partners has committed $6.3 million in federal low-income housing tax credit (LIHTC) financing for the 48-unit expansion of Valley Estates at Mabelvale, an apartment community located eight miles southwest of Little Rock in Mabelvale. The project, scheduled for completion by November 2020, is intended for households earning up to 30, 50 and 60 percent of the area median income. One unit is reserved for a property employee. Phase III of Valley Estates at Mabelvale is Hunt’s third project with Burleson Development, the developer of the first two phases that were completed in 2011. The project also marks Hunt Capital Partners’ fourth transaction with RichSmith as developer consultant. RichSmith and its affiliates are serving as the general contractor, architect and property manager for Phase III. The total development cost of Valley Estates at Mabelvale Phase III is $7.2 million. Hunt Capital Partners facilitated the LIHTC financing through its proprietary fund with BancorpSouth Bank, which also provided an approximately $4.3 million construction loan. Arkansas Development Finance Authority provided a $450,000 construction-to-permanent loan through its HOME program, …

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AcquisitionsAffordable HousingMultifamilyTexas

Steele Properties Buys 160-Unit Affordable Housing Community in Temple, Texas

by Taylor Williams

TEMPLE, TEXAS — Steele Properties, a Denver-based investment firm specializing in affordable housing, has purchased Wayman Manor, a 160-unit Section 8 affordable housing complex located in the central Texas city of Temple. Steele Properties will implement a capital improvement program that will upgrade roofs, HVAC systems and both indoor and outdoor amenity spaces. Monroe Group Ltd., Steele’s sister company, will oversee property management. Wayman Manor was built in 1971.

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Affordable HousingDevelopmentMichiganMidwestMultifamily

Magnus Capital Partners to Develop $35M Affordable Housing Project in West Michigan

by Kristin Harlow

WYOMING, MICH. — Magnus Capital Partners is transforming the former Studio 28 movie theater on 28th Street in Wyoming near Grand Rapids into a $35 million, 226-unit affordable housing project known as HOM Flats at 28 West. Magnus purchased the seven-acre, vacant property in October and has since started site development work. Preleasing is expected to begin in winter 2020 with occupancy commencing in summer 2020. Six buildings will be constructed along with 320 surface parking spots. Amenities will include a community room, coffee shop, bike storage, dog washing stations, playground and walking paths. The project team includes Rohde Construction, Hooker DeJong Architects, Exxel Engineering and American Preferred Management. Magnus is a private development firm with experience in workforce housing. Its founder Vishal Arora is from Zeeland, a suburb of Grand Rapids. Joining Magnus as an investor in the project is InSite Capital, a division of Chemical Bank. In addition, the Michigan State Housing Development Authority has awarded the project with low-income housing tax credits.

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Avanath Purchases Two Affordable Housing Communities in Alexandria, Orlando for $99.2M

by Alex Tostado

ALEXANDRIA, VA. AND ORLANDO, FLA. — Avanath Capital Management LLC has purchased tow affordable housing communities for a combined $99.2 million. The first property, Alexandria Station Apartments, is located in Alexandria and sold for $52.7 million. The 290-unit community was built in 1965 and renovated in 1998 and 2010. The property comprises 25 three-story buildings that were 97 percent occupied at the time of sale. Alexandria Station is a 251,579 square-foot property consisting of studio, one-, two- and three-bedroom floor plans. Communal amenities include a swimming pool, grilling and picnic areas, playground, on-site-laundry facilities and a clubhouse. The other property is Brooke Commons, a 288-unit complex in Orlando that sold for $46.5 million. Built in 2000 and comprising 36 two-story buildings, Brooke Commons was 99 percent occupied at the time of sale. Five percent of the community’s units serve those making 55 percent of the area median income (AMI), while 50 percent are reserved for residents earning 60 percent AMI and 45 percent of the units are for residents earning 60 to 80 percent AMI. The property is located three miles from the University of Central Florida campus and 12 miles northeast of downtown Orlando. Communal amenities include a business …

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Affordable HousingMarket ReportsMultifamilyNortheastNortheast Market Reports

Affordable Housing Benefits Communities As Well As Residents

by Taylor Williams

For the past 10 years, Walters has been creating premium affordable housing that is 100 percent income-restricted and sustainable. The company has  delivered a dozen developments throughout New Jersey, and several more are currently under development. The positive benefits and lasting effects of affordable housing impact both the residents living in the homes as well as the communities in which they are located. Each year, more people struggle to afford living in the communities where they work because of a lack of affordable housing stock. Even older adults who have lived for decades in a community have few opportunities to downsize. Many young adults who want to raise their own families in the communities where they  grew up cannot afford “starter homes” today. Affordable housing, however, enables people to live where they choose based on their needs and aspirations. A Princeton University study of affordable housing development in Mount Laurel, New Jersey, found numerous benefits: Families moving into high-quality affordable housing experience a safer neighborhood, lower crime rates, better mental health, strong rates of employment and higher wages. By saving money on rent, families can spend more of their household incomes on essentials such as food and healthcare. The study …

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Affordable HousingCaliforniaDevelopmentMultifamilyTop StoriesWestern

Apple Commits $2.5B to Combat Affordable Housing Shortage in California

by Jeff Shaw

CUPERTINO, CALIF. — Apple Inc. (NASDAQ: AAPL) has announced a $2.5 billion plan to address the housing availability and affordability crisis in California. Much like Facebook’s recent announcement to commit $1 billion and build 20,000 affordable housing units in the Golden State, Apple cited the major discrepancy between the paces of population growth and affordable housing development as the key catalyst behind its plan. Earlier this year, Microsoft Corp. and Alphabet Inc., the parent company of Google, also pledged a combined $1.25 billion toward the development of affordable housing in metro Seattle and the Silicon Valley area, where those two firms are respectively based. In supporting this measure, Apple referenced a recent study by real estate brokerage firm Redfin that found that some 30,000 people had vacated the San Francisco area between April and June of this year. The study also found that the rate of homeownership in the Bay Area has hit a seven-year low. Both pieces of information suggest that residents, whether buying or renting, are simply being priced out of the region. In response to the growing cost of housing in California, Gov. Gavin Newsom signed a bill in October that would cap annual rent increases imposed …

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Affordable HousingMarket ReportsMultifamilyNortheastNortheast Market Reports

Making Up for Lost Time Can Be Costly for Affordable Housing Developers

by Taylor Williams

Despite evidence of their own experience, developers of affordable housing can still minimize the incidence of unforeseen delays and underestimate their costs. Capital One has 75 such developments under construction, and more than half are in some way behind schedule. This is neither unusual nor a comment on our partners’ skills as developers of much-needed affordable housing. The point is that making up for lost time can be particularly costly. While unforeseen delays are no more common in affordable housing than in other building types, developers of this product type run the unique risk of losing crucial tax credits when they miss a place-in-service deadline. Loss of tax credits as a funding source, which can account for as much as half the capital funding project costs in some cases, upends the carefully crafted funding structure of the development. Other developers might be content to pay an extra month’s interest on their construction loan while addressing the source of delay, as this constitutes a less-significant sacrifice at today’s rates than in the past. But affordable housing developers must incur extra expenses and do whatever is necessary to get the project back on track. Unforeseen Bedrock A case in point is the …

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Facebook Commits $1B, Partners with State of California to Build 20,000 Affordable Housing Units

by Alex Tostado

MENLO PARK, CALIF. — Facebook (NASDAQ: FB) has committed $1 billion and will partner with the State of California to build 20,000 affordable workforce- and low-income housing units over the next 10 years. Many of the units will serve first responders and teachers who can’t afford to live in the communities they serve, according to a press release from Facebook. According to David Wehner, CEO of Facebook, a family of four making $100,000 in San Francisco is considered low income. “The issue of affordable housing affects people across middle-class and low-income families alike,” says Wehner. Facebook will invest $1 billion over the next 10 years as follows: $250 million to a partnership with the State of California for mixed-income housing on excess state-owned land in communities where housing is scarce. $150 million for production of affordable housing, including housing for the homeless, in the San Francisco Bay Area. Facebook will contribute to the Bay’s Future Fund, the affordable housing investment fund of Partnership for the Bay’s Future, to work toward a more livable, equitable and racially and economically diverse Bay Area. $225 million in land in Menlo Park. This is land Facebook previously purchased, that is now zoned for housing, on which …

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Hunt Capital Partners Funds $10.4M in Financing for Affordable Housing Project in Oahu

by Amy Works

OAHU, HAWAII — Hunt Capital Partners has provided $10.4 million in federal and state low-income housing tax credit financing, as well as federal solar tax credit equity financing, for the construction of Hale Makana O Maili in Oahu’s Waianae district. Upon completion, Hale Makana O Maili will feature 52 affordable housing units spread across six garden-style residential buildings. Construction began in late September, with completion slated for November 2020. The development team comprises the Hawaiian Community Development Board, Pacific Development Group and 3 Leaf Holdings. Moss & Associates is serving as general contractor and Mark Development will serve as property management for the project.

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