JV Debuts DC Affordable Housing
- May 22, 2018
A joint venture of Somerset Development Co., New Community Partners and Jonathan Rose Cos. has opened Portner Flats in Washington, D.C., a new affordable housing high-rise built on the former site of Portner Place Apartments. The community was designed by Eric Colbert & Associates. Eagle Point Management will serve as property manager.
Located at 1440 V St. N.W., the community doubled the number of affordable apartments that were previously offered, from 48 to 96 units, by increasing the zoning density. Residents of the original building were relocated during its 18-month demolition and construction and were guaranteed a spot in the new property. More than 75 percent of the previous residents returned. Each of the units is covered under the Low Income Housing Tax Credit program, in which all residents are required to earn 60 percent or below of the area median income. Half of the apartments are covered by a HUD project based Section 8 contract which services those earning 50 percent or below AMI.
Portner Flats was designed to meet Enterprise Green Communities standards, as well as integrate energy efficiency, resident health and wellness and recycling. Services such as computer training, financing counseling, job training and after-school and senior programs will be offered to residents. Amenities for the property include:
- community meeting rooms
- fitness room
- community garden
- computer lab
- laundry facilities
The original Portner Place Apartments was a distressed HUD Section 8, garden-style community. Comprising four three-story wood frame apartment buildings, the property suffered from deferred maintenance in a rapidly gentrifying neighborhood. The plan for a new mixed-income, mixed-use property was approved by the Historic Preservation Review Board and a Planned Unit Development was secured to increase the site density. The partners also obtained a pass-through Section 8 contract from HUD for the existing residents of Portner Place to insure affordability while they were moved off-site during construction. The team also obtained HUD approval to extend the Section 8 contract for 20 years upon the residents’ return.
The joint venture and the Rose Green Cities Fund—a Rose-managed investment fund capitalized by Citi Community Capital—purchased the site in 2013, creating the opportunity for the property to be rezoned. The D.C. Department of Housing and Community Development also provided an acquisition loan. The development was planned in collaboration with the Portner Place Tenant Association, which exercised its right of first refusal through the Tenant Opportunity to Purchase Act and then assigned those rights over to Somerset, followed by the joint venture team. In addition to the Rose Green Cities Fund, Citi Community Capital also provided the initial first mortgage loan through Freddie Mac.
The development was financed with tax exempt bonds issued by the District of Columbia Housing Finance Agency and 4 percent LIHTC. Boston Financial served as the Tax Credit Syndicator and Capital One as the LIHTC investor. Clark Construction completed the project utilizing a Project Labor Agreement for the construction of the community.
Prudential Mortgage Capital Co. underwrote the FHA insured construction and permanent loans through the 221(d)4 program, with the AFL-CIO Housing Investment Trust purchasing the Ginnie Mae securities. Owner financing provided internal subsidy to expand the affordability and amenity package.
Images courtesy of Hoachlander Davis Photography