MARKET OPPORTUNITIES
WORKFORCE HOUSING
Making Workforce Housing a Priority
Q&A with Stockton Williams, managing director of the Enterprise Terwilliger Fund.
By Liz Enochs
AFFORDABLE HOUSING FINANCE • JULY 2007
Money can’t fix everything,
but when it comes to
building more homes
affordable to America’s
middle-income workforce,
it sure can’t hurt. Ron Terwilliger, chairman
and CEO of Atlanta-based Trammell
Crow Residential, recognized that recently
when he made two $5 million gifts to
further the development of more workforce
housing. Enterprise Community
Partners, a nonprofit based in Columbia,
Md., used its gift to establish the
Enterprise Terwilliger Fund, which it
expects to use to springboard the development
of more than 2,000 affordable
homes a year, through three different
funds: the Maryland Regional Workforce
Housing Fund, the Atlanta Land
Assemblage Fund, and the Enterprise
Community Loan Fund. Stockton
Williams, managing director of the
Enterprise Terwilliger Fund, spoke to
AFFORDABLE HOUSING FINANCE in May.
Q How will Enterprise turn Ron
Terwilliger’s $5 million gift into
$130 million in housing?
A $2 million is Enterprise’s investment
in a $100 million fund that
will create workforce housing in
Maryland, D.C., and northern Virginia.
Another $1 million leverages $5 million
of philanthropic capital as part of the $30
million Atlanta Land Assemblage Fund
to acquire sites for affordable housing
development in metro Atlanta. The
remaining $25 million in lending activity
is what Enterprise’s internal loan fund is
able to make in additional loans as a
result of the gift. By adding to our balance
sheet, we are able to borrow and lend
more funds for affordable housing.
Q Why is producing workforce
housing important?
A Housing costs have outpaced the
rate of inflation in many markets.
According to the National Housing
Conference, more than 5 million working
families in the U.S. pay at least 50 percent
of their income for housing, a 67 percent
increase since 1997. In many communities,
people who provide the bulk of vital community
services—teachers, firefighters,
police officers, service workers—often cannot
themselves afford to live in the communities
they serve.
Q The new entity being formed by
this gift is the Maryland Regional
Workforce Housing Fund. Can you
explain how that fund will work, and
what type of housing it aims to create?
A It’s a fund for workforce housing,
which we define as 60 to 120 percent
of the area median income. The $100 million
Maryland Regional Workforce
Housing Fund, managed by Enterprise,
will provide financing to create workforce
housing developments; transit-oriented
housing developments; mixed-income
developments; inclusionary housing; and
mixed-use projects with a residential component.
We think transit access is critical
from both an affordability as well as a sustainability
point of view. Enterprise is
deeply committed to making affordable
housing as environmentally responsible as
possible. That’s certainly an important
strategy and also an important strategy for
workforce housing development.
The fund will focus on “double bottom
line” investments, coupling the social mission
of affordable housing with marketrate
returns on investments in workforce
housing developments.
Q What kind of financial support
will the fund provide, and when
will it begin making investments?
A We’ll be able to provide a range of
financing options for developers. A
loan for construction could be one use, a
mezzanine financing to come in at a key
point in the process could be another,
and the fund will be able to support
acquisition and predevelopment activities
to some extent.
We’re just in the phase now of raising
capital and cultivating the pipeline of
projects, so there aren’t any transactions
in it yet, but we expect to be at it by the
fall. Once we reach $40 million in capital
raised, the fund is able to start deploying
resources. That’s the first milestone to
reach in terms of capital raising. We’ve
seen a lot of interest in the fund from
developers who have projects that would
qualify. In all likelihood, we would see
the first projects coming online in 2008.
Q At what stage of the development
process will the fund inject
money into workforce housing projects?
A Generally, the funds through
Enterprise Community Loan Fund
and the Atlanta Land Assemblage Fund
are for predevelopment and site acquisition.
Funds through the Maryland
Workforce Housing Fund will be available
for those and other purposes based
on project need and other factors.
Q Won’t financing new rental housing
be difficult without soft funding
or equity investments?
A I agree. That’s why it would be
great to have resources to stimulate
equity investment in a broader range
of affordable housing than the lowincome
housing tax credit (LIHTC)
serves. The needs the LIHTC is designed
to serve are still huge. There ought to be
additional tax credits for affordable and
workforce housing, both rental and for
sale, but they shouldn’t come at the
expense of existing programs that are
already oversubscribed.
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