San Francisco–The three-year renovation of the 211-unit Martin Luther King-Marcus Garvey Square Cooperative Apartments in San Francisco’s Fillmore District has been completed. Originally built in the late 1960s, the property was one of the first developments of its kind, providing low-income residents an ownership stake by building equity over time. By late 2008, however, the physical property had declined so much that HUD nearly rescinded its Section 8 status and threatened to foreclose on the property.
Related California, a developer specializing in affordable and market-rate multifamily and mixed-use properties in California, formed a partnership with a number of other entities to undertake the renovation. Other partners included the San Francisco Redevelopment Agency (SFRA), U.S. Department of Housing and Urban Development, Citi Community Capital, Freddie Mac and the development’s seven-member Co-op Board, which represents resident owners in all property decisions.
All units were completely renovated to include new finishes, appliances and fixtures, and the redevelopment also adds increased security measures throughout the property. Other common-area improvements include a new community center that offers day-care services to families and entertainment for its many elderly residents; two new playgrounds; a new laundry building; and a park plaza that accommodates barbeques and picnic tables.
Since the development is owned by the Co-op Board, whose goal is to build equity over time, the standard approach of accessing low-income housing tax credits was discarded early in the planning process, according to Related California. Boosted by an initial $5 million loan from the SFRA, the company worked with Citi Community Capital, who in turn worked with Freddie Mac to secure a $36 million loan.
Though public funding for affordable housing is becoming more scarce in the new climate of austerity, Bill Witte, Related California’s president and CEO, tells MHN that projects such as Martin Luther King-Marcus Garvey Square Cooperative Apartments still have a leg up when it comes to redevelopment funding. “Affordable housing in general will be challenged by the stresses on budgets at all levels of government,” he says. “But projects like this, in which existing subsidies like project-based Section 8 assistance can leverage significant private debt, will have opportunities to recapitalize and refinance.”