Affordable Housing Finance

REGIONAL REPORT

West

PEP’s Most Ambitious Project

AFFORDABLE HOUSING FINANCE • April/May 2009

BY DONNA KIMURA

PEP Housing’s Casa Grande Senior Apartments in Petaluma, Calif., is across the street from the local high school, allowing residents and students to participate in intergenerational programs. (Photo by Morgen Benoit Photography)

PETALUMA, CALIF.—The 58-unit Casa Grande Senior Apartments is the largest and most innovative development that PEP Housing has built in its 30-year history. It is also the model that the nonprofit organization will use for all future projects.

Completed in January, Casa Grande sets a high mark. It’s one of the greenest developments in the region and the first 100 percent universally designed residential project in Sonoma and neighboring Marin counties.

The $19 million development was financed with federal Sec. 202 funds and low-income housing tax credits (LIHTCs), a blend that’s only recently been able to work.

“Casa Grande is serving a critically important need in the community—providing quality affordable housing to seniors on a very limited income,” says Mary Stompe, PEP Housing’s executive director. “The project was built to be a home to more than 60 seniors, not just an apartment complex.”

A man who had been living in his camper is one of the new residents. Another recently lost his home in foreclosure.

Over the years, PEP Housing, which some may know as Petaluma Ecumenical Properties, has built 13 developments with nearly 300 units. Building sustainable projects is a priority.

Casa Grande’s green features include photovoltaic panels and a satellite irrigation system.

It’s the first multifamily project in Sonoma County to be rated for GreenPoint, a green building evaluation program.

The green features added approximately 10 percent to the development cost, but PEP Housing officials say it is worth it to create a healthy environment for residents. They also expect to realize water and energy-cost savings over time. The Archumana architecture firm designed the project.

The development’s universal design makes the entire property accessible to people with diverse physical abilities. This allows the seniors to age in place and remain independent.

Forty-five of the apartments are Sec. 202 units, and residents of these apartments pay 30 percent of their income toward rent. There are also 13 LIHTC apartments aimed at seniors earning no more than 50 percent of the area median income. The monthly rent for these units is about $660. There is also one manager’s unit.

Financing included $12.8 million in tax-exempt bonds allocated by the California Debt Limit Allocation Committee and issued by the California Municipal Finance Authority.

In addition, 4 percent LIHTCs from the California Tax Credit Allocation Committee generated $7.8 million in equity. Merritt Community Capital Corp. was syndicator. Merritt’s experience in LIHTCs and Sec. 202 seniors housing drew the firm to the deal, says President Bernard Deasy.

The Department of Housing and Urban Development provided critical Sec. 202 financing, including a $6.1 million capital advance and $248,400 in a project rental assistance contract. Recent changes have made LIHTCs and Sec. 202 more compatible.

Citibank was the construction lender. The California Department of Housing and Community Development and the city of Petaluma provided $4 million in HOME funds. The city provided another $1.3 million soft loan.