Social-Purpose Equity Trust Expands Its Activities
The Housing Partnership Equity Trust has kicked its activity into high gear by finalizing finance for the purchase of 300-unit Woodmere Trace apartments in the Norfolk/Hampton Roads area by the Community Preservation and Development Corp.
By Dees Stribling, Contributing Editor
Washington, D.C.—The Housing Partnership Equity Trust (Equity Trust) has kicked its activity into high gear by finalizing finance for the purchase of 300-unit Woodmere Trace apartments in the Norfolk/Hampton Roads area by the Community Preservation and Development Corp. (CPDC). The deal is the third one for the new social-purpose REIT, but hardly the last: it’s drawing on a total of $100 million that it has raised from various sources for workforce and affordable housing preservation.
Similar purchases have been made in Fairfield, Calif., and Aurora, Ill., in the past six months. The Housing Partnership Network (HPN) sponsors and operates the Equity Trust, which launched in December 2012. HPN, a business collective of 100 of leading housing and community development nonprofits, combines social mission with private enterprise to address the chronic need for affordable housing.
Equity Trust works in partnership with 12 nonprofit members. They are AHC Inc.; BRIDGE Housing Corp.; Chicanos Por La Causa Inc.; Community Preservation and Development Corp.; Eden Housing Inc.; Hispanic Housing Development Corp.; Homes for America Inc.; LINC Housing Corp.; Mercy Housing; Nevada HAND Inc.; the NHP Foundation; and NHT/Enterprise.
The REIT fills a need for its nonprofit members by providing access to long-term, low-cost capital to acquire apartment buildings within their communities, enabling them to compete more effectively with for-profit developers. These real estate transactions don’t involve federal housing tax credits or other public subsidies, which nonprofits typically need to secure to finance the purchase of properties—a process that can stretch up to two years.
The need is clear, according to the nonprofits. A recent study conducted by the Center for Housing Policy found that 26.4 percent of working renter households spent more than half of their income on housing costs in 2011, an increase from 2008. Also, Harvard University’s Joint Center for Housing Studies reported in 2011 that shrinking affordable housing stock, falling incomes, and increased competition from higher-income renters has widened the gap between needed supply of affordable rental units and growing demand, especially over the last decade.
To increase the impact of the Equity Trust model, the Housing Partnership Network recently announced that it’s raising an additional $500 million over the next two years to scale it up. The funds raised will be used to acquire, renovate and operate more than 7,000 affordable housing units around the country.
