Tax-Exempt Loan Helps Structure NYC RAD Deal

October 24, 2019                              By: Multifamily Executive

$192.2 million public housing project demonstrates the power of creative teamwork.

Brought to you by Freddie Mac Multifamily

The Hope Gardens NYCHA development in Brooklyn, NYC | Courtesy: Hunt Companies (Photo: Michael Ratliff)

The story and great lesson of the $192.2 million Hope Gardens portfolio acquisition and renovation can be summarized in seven words: Where there’s a will, there’s a way.

The ”way” involves the enabling Rental Assistance Demonstration (RAD) conversion of 1,321 New York City public housing units to clear the way for an ambitious and desperately needed renovation program. The immediate list of improvements includes everything from new boilers and wiring to updated kitchens and bathrooms. Longer term, the conversion ensures Hope Gardens residents in Brooklyn’s Bushwick neighborhood gain the permanent stability and peace of mind of housing affordability.

The federal RAD program seeks to improve and preserve at-risk public housing developments by allowing the properties to convert to long-term Section 8 rental assistance contracts. This is critical because it puts the housing authorities in better position to leverage additional financing to perform needed improvements.

Still, the road to closing was a challenge, requiring an impressive array of creative strategies and tools— tax-exempt loans, low-income housing tax credits and other funding sources; rent blending; and judicious risk taking by all players factored into the deal............................Read More

Wells Fargo to Donate $1 Billion to Affordable Housing and Homelessness Across America

October 23, 2019                                        By: Good News Network

In June, Wells Fargo announced a new philanthropic strategy that will address the key issues of housing affordability and small business revitalization with one billion dollars in grants and support.

The bank that serves one in three households in the United States said it is committing $1 billion over the next six years to support nonprofits and private entities that demonstrate ability to create positive outcomes in homelessness, available and affordable rentals, transitional housing and home ownership.

Last year, the Wells Fargo Foundation donated $444 million to more than 11,000 nonprofits to help address economic and social needs in underserved communities—and yesterday it announced $9 million in grants to more than 60 nonprofits, such as Habitat For Humanity and Covenant House, in support of housing affordability solutions. (See the full list below)

Bringing more than 30 years of experience in public and private philanthropy, Brandee McHale stepped in to take over the helm at the Foundation in August, after being the head of Corporate Citizenship at Citigroup. and president of the Citi Foundation, and previously working at the Ford Foundation.

To address challenges in construction, financing, and support services for low- and moderate-income families, the elderly and the homeless, Wells Fargo hopes to ease the cost burden for housing across the country, “from Alaska to Florida.”..............Read More

Facebook announces $1 billion investment package to bolster affordable housing

October 23, 2019                                              By: Kate Bradshaw/Almanac

Facebook, the social media behemoth headquartered in Menlo Park, announced Tuesday, Oct. 22, that it plans to invest $1 billion over the next decade toward affordable housing in California and elsewhere, including some existing commitments.

Facebook has temporarily subsidized rent for 22 local teacher households, including that of Konstance Kirkendoll, a teacher at Beechwood Elementary School in Belle Haven, as part of an ongoing pilot program. Last week, the company announced a $25 million commitment toward housing for those teacher and others in San Mateo and Santa Clara counties, just one of a number of major investment commitments toward affordable housing Facebook announced Oct. 22. (Photo by Michelle Le | 2016.)

In an announcement posted on the company's newsroom website, Facebook's Chief Financial Officer David Wehner stated that the funds will go toward creating up to 20,000 new housing units "to help essential workers such as teachers, nurses and first responders live closer to the communities that rely on them."

These job types typically represent what policymakers refer to as the so-called "missing middle," or middle-income earners who don't qualify for existing subsidy programs but are increasingly not earning enough to live in the Bay Area.

Wehner announced a new $250 million investment from Facebook for a partnership with the state of California aimed at developing mixed-income housing on excess state-owned land "in communities where housing is scarce."

(This refers to areas where affordable housing and a housing supply are scarce compared with the demand, not necessarily rural areas where there is a low housing supply overall, a Facebook spokesperson confirmed via email.)

As part of the press release, Gov. Gavin Newsom said, “State government cannot solve housing affordability alone, we need others to join Facebook in stepping up – progress requires partnership with the private sector and philanthropy to change the status quo and address the cost crisis our state is facing. Public-private partnerships around excess land is an important component in moving us forward.”.....................Read More

How Lenders are Supporting Affordable Housing Construction

October 7, 2019                              By: Kelsi Maree Borland

Capital is recognizing the need and opportunity in affordable housing development and LIHTC-backed rehab projects.

Anand Kannan

Demand for affordable housing is growing across the country, including in emerging markets like Denver. However, capital is catching on to the need for affordable housing, both on new development projects and LIHTC-backed rehab projects. This capital has been an important aspect of bringing more affordable housing to markets suffering from a housing shortage.

“Investors such as banks and insurance companies are realizing that there is incredible value in LIHTC-backed rehab projects,” Anand Kannan, leader of the preservation and development teams at Community Preservation Partners, tells GlobeSt.com. “In addition to offsetting tax burdens and providing a yield that is competitive to market-rate investments, an affordable housing investment comes with significantly lower risk of vacancy.”

It isn’t only the financial benefits, but capital is also attracted to social impact benefits of affordable housing. “Investors also enjoy the derivative impact of deploying capital with a purpose, which generates value in the form of PR and employee productivity,” says Kannan. “The rehab model, particularly, supports intangible value through environmental sustainability because no property is cleaner than the one that’s already built. All of this ROI adds up to an enticing proposition for those in charge of capital investments.”.........Read More