Michael Costa’s new joint venture offers the veteran developer the best of both worlds.

He gets to be part of owning and managing a $3.4 billion affordable housing portfolio that he helped create under several different companies.

His new firm, Highridge Costa Housing Partners, LLC (HCHP), will also develop new low-income housing tax credit (LIHTC) properties. The company expects to break ground on a 62-unit multifamily project in Hesperia, Calif., within the next 30 days.

The developer’s latest reincarnation teams him with Highridge Partners, Inc., a privately held real estate investment firm, and Citi, which acquired the 275-property portfolio last year. The previous owner was a partnership that Costa formed in 2008.

 “The move puts us in a good position,” says Costa, president and CEO of the new HCHP “It restructured the debt and brought new equity to the company.”

HCHP will hold general partnership interests in the portfolio. The properties, which provide nearly 27,000 units of affordable housing, are in 34 states and Puerto Rico. About half of the developments are in California.

Costa was involved in creating and operating the family and seniors housing under several different business entities during the last 15 years. He was president of Simpson Housing Solutions, which developed most of the portfolio.

Most recently, he led MacFarlane Costa Housing Partners, which bought the Simpson properties about two years ago. Plans called for this partnership to focus on developing new projects while the existing properties were sold to a separate entity. However, the economic downturn derailed those plans.

Citi, which had provided a loan to buy the Simpson portfolio, began a “negotiated foreclosure” that gave Costa the right to buy and hold on to the properties.

 “We explored several options for these properties and determined that a partnership with Highridge Costa maintains much-needed affordable housing throughout the United States while protecting Citi’s investment,” said Steven N. Fayne, managing director for Citi Community Capital, the bank’s community development lending and investment arm, in a statement.

Costa and his team continued to oversee the portfolio throughout the process. As a result, there is no loss of continuity.

He’s also eager for the opportunities ahead. In addition to creating an entity to manage the existing properties along with Citi, HCHP will develop new affordable housing communities, focusing on five states—California, Nevada, Arizona, Colorado, and New Mexico.

As its older LIHTC properties reach their 15-year mark, the firm will resyndicate them with 4 percent LIHTCs and bond financing, says Costa.