How Teamwork Can Push Affordable Housing Projects Across the Finish Line

Across the country, innovative partnerships of developers and local stakeholders are finding success. Here’s how.

The housing affordability issue in the U.S. is at a crisis stage. The National Low Income Housing Coalition estimates a shortage of 7.3 million affordable rental homes, with an average of only 34 units per 100 extremely low-income households. Narrowing this gap is a tall order, given interest rates, construction and labor costs, and the challenge of ensuring the long-term affordability of the units.

These four projects showcase collaborations among a diverse group of stakeholders ranging from a faith-based organization to a health-care system and a city agency. Facing an equally wide variety of challenges, the partnerships produced long-term affordability, an improved quality of resident life and community benefits.

  • 37 Hillside
  • 37 Hillside
  • 37 Hillside
  • 37 Hillside
  • 37 Hillside Ave.
  • 37 Hillside Ave.

Leaps of Faith: 37 Hillside Ave., New York City

Project at a glance: 164 units in Upper Manhattan serving residents age 62 and older; currently leasing

The team: Coconut Properties, RiseBoro Community Partnership, The Rocky Mountain Baptist Church

The Rocky Mountain Baptist Church, located in Manhattan’s Washington Heights neighborhood, needed a makeover. The 77-year-old house of worship had about 4,850 square feet of space on a 20,000-square-foot site built above a steep slope, with uneven subsurface rock below. It was of compliance with the fire-safety regulations and the Americans with Disabilities Act. Two previous attempts to revamp the site had failed.

But where others saw a prohibitively difficult endeavor, Coconut Properties CEO Adam Zeidel saw an opportunity to both give the church a brand-new facility and provide affordable senior housing. The development includes a new church roughly 2,500 square feet larger than its predecessor, complete with new classrooms, a conference center and kitchen, plus $2.7 million set aside for future operations.

Claretta Nesbitt, the church’s chair of trustees, saw the value in Coconut’s understanding of the church’s goals. “(Others) said, ‘We can give you a gym to play basketball,’ but we needed a sanctuary and a church. We need people to know that we are there and that we can help them.”

For Zeidel, building affordable senior housing “made the most sense thematically,” because the area “dovetailed with what the zoning allowed, as senior affordable housing allows benefits such as a waiver of required parking.”

The church provided what Zeidel calls the “raw material:” a site in a city with some of the nation’s highest property costs. Every step of the way, the developer deferred to the church’s main goal of building a new sanctuary. Zeidel told the church, “We’ve engaged all of these consultants, engineers, design firms and architects, but it’s your space.”

But Coconut Properties needed the help of a partner established in the New York City affordable housing market. RiseBoro Community Partnership, a nearly 50-year-old, vertically integrated organization, seemed like the perfect fit.

Emily Kurtz, the organization’s vice president of housing, said that the firm’s relationships and experience with faith-based developments made it an effective partner, as well as its experience of managing more than 1,800 senior housing units. The community secured $120 million from public and private sources that RiseBoro has relationships with. Residents have access to the company’s caregiver support, case management and nutrition programs.

  • South Platte Crossing
  • South Platte Crossing

Mission Meets Expertise: South Platte Crossing

Project at a glance: 60 units, scheduled to open early next year

The team: Nesbitt Development, Brinshore Development, Urban Land Conservancy

Commerce City, Colo., a northeastern suburb of Denver, has a growing population even while the state has a shortage of 100,000 affordable units, according to Up For Growth.

In 2014, the Urban Land Conservancy, a Denver-based nonprofit developer, identified the site of South Platte Crossing—then home only to a six-story office building—as a candidate for an affordable community. The site is a within a quarter mile of Commerce City 72nd Ave. station, which is two stops from downtown Denver.

“We were trying to get ahead of where we reasonably anticipated folks would be displaced and land values would go up, as the metro area continued to build out its light and commuter rail infrastructure,” said Sarah Harman, a senior vice president of real estate at ULC. Over a four-year period, the nonprofit worked with Adams County to purchase the building and organize its ownership structure so that the developer could both construct affordable housing and retain custody of select office suites.

ULC recruited Eric Nesbitt, a developer, broker and attorney who had done extensive work for the organization. While Nesbitt offered local relationships, legal expertise and business experience, he needed additional resources ranging from tax credit negotiations to consultant contacts. Nesbitt and ULC joined forces with Brinshore Development, which has a 17-state, 11,000-unit portfolio.  

 “It was a partnership, but it was more of a mentor-protégé partnership as well, because they have done so many of these,” Nesbitt said of Brinshore. As an example, he cited Brinshore’s role in preparing the successful tax-credit application. ULC’s experience proved valuable on another front, as the organization’s 99-year ground lease means that so long as it retains ownership of the property, it will remain affordable. 

South Platte crossing offers such market-rate amenities as central air conditioning and washers and dryers, as well as fitness and conference centers, a children’s playground and a second-level terrace. ULC’s ownership of suites in the adjacent office tower is a benefit to residents, as well. The suites’ buyers include nonprofits offering early child care, medical services, job placement and other services.

Future-proof affordability: Oakhouse

Project at a glance: 219 units of affordable and market-rate units in Dallas; currently leasing

The team: MSquared, Mintwood Real Estate, The Dallas Public Facilities Corp.

Located in an historic part of Dallas, Oakhouse is being built with a unique structure procured through a city-sponsored agency. Prior to the formation of the Dallas Public Facilities Corp., affordable housing stakeholders had only Low Income Housing Tax Credits at their disposal. Under the PFC structure, local governments own the project site and lease it to developers.

Communities built under this structure receive property tax exemptions and can skip the regulatory process for ground-up developments. As Dallas City Council Member Chad West put it: “The PFC has drastically leapfrogged the LIHTC development numbers that we have previously seen, doubling the capacity of our city to produce affordable units.”

Oakhouse was the perfect candidate for demographic and policy reasons. MSquared, which specializes in mixed-income developments, partnered with Mintwood Real Estate, a Dallas-based firm with expertise across the affordability spectrum. “You have the city’s goals for attainable housing, and we had our own goals to create a mixed-income community in this location, which continues to be well-positioned,” said Sara Myerson, managing director of investments at MSquared.

The project, which contains a 50-50 mix of affordable and market-rate units, is designed for what Myerson considers future-proofing to account for the area’s growing workforce and diverse income brackets. Building purely affordable or strictly market-rate communities might lead to either financially infeasible projects or tax revenue shortfalls.

“I don’t know what it was generating in tax revenue, but it wasn’t much,” West said.  “We took that (site) and we are turning it into affordable housing, where we will see lease payments and ultimately own the property.”

The combined fiduciary and service-centric elements of the partnership and property dovetail to what Myerson calls “social sustainability:” “It’s where people working in key essential functions are also able to live in the neighborhood,” she said.

Most new residents represent that are finding it difficult to live near the city center. “The people who come through the door are teachers, policemen and firefighters,” said Katy Slade, founder & principal at Mintwood. “What we are seeing is that the housing we are providing is helping people in the neighborhood be able to live there and have a pace that is set on rents.”

  • Ogden Commons
  • Ogden Commons Redevelopment Plan
  • Ogden Commons

Virtuous cycle: Ogden Commons

Project at a glance: $200 million mixed-use in Chicago; first 92 units are leasing, phase 2 under construction

The team: Habitat Affordable Group, Sinai Health System, Alecko Capital and the City of Chicago

“It’s unusual to have an opportunity to build housing that is literally adjacent to health care,” said Jeff Head, vice president of development for Habitat. That’s the case at Chicago’s Ogden Commons. The development, he says, offers a “virtuous cycle” that provides residents with employment at the facility and commercial space, alongside specialized health care. “We came up with ten thousand jobs within two blocks of the housing site, and a very large number of those are accessible to folks with a high school education,” Head added.

At full buildout, the project will combine 350 affordable units, 120,000 square feet of commercial space and One Lawndale Community Care and Surgery Center, a facility owned and operated by Sinai Health System. The first phase, where Sinai’s facility is located, includes 92 units of housing, 90 percent of them affordable.

The project is a product of the healthcare provider’s vision for the area’s vacant buildings and parcels. “Our communities carry a disproportionate burden of illness, poverty, hunger, and trauma, with higher rates of heart disease, respiratory issues, obesity, and asthma,” said Sameer Shah, president of Mount Sinai Hospital.

The facilities offer nursing care, imaging services and treatment for a wide range of conditions. “This was a pivotal moment that wasn’t about bricks and mortar,” Shah noted. “It’s about access and inclusion for communities that have been on the outside looking in for far too long.”

Residents will stand to benefit in other ways, as well. The Chicago Housing Authority mandates that at least 40 percent of the units be reserved for workers at the health-care center.

Read the July 2024 issue of MHN.

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