KUKUI GARDENS APARTMENTS
Developers: EAH Housing and Devine & Gong, Inc. Architects: Cesar Pelli (original) and Kodama Diseno Architects (renovation)
Major Funders: Citi Community Capital; Enterprise Community Investment; Hawaii Housing Finance and Development Corp.
HONOLULU—Kukui Gardens Apartments has long provided affordable housing in Honolulu, one of the most expensive housing markets in the nation.
Consisting of 857 units, the development was established in 1971 as affordable housing for low-income families and seniors under the federal Sec. 221(d)(3) program.
In 2006, the property, one of the largest affordable housing developments in Hawaii, was offered for sale.
“The potential loss was huge,” says Kevin Carney, vice president at EAH Housing.
It wasn't just the number of units. It was also the location. Kukui Gardens is rare in that it provides affordable housing in the urban core, where many of its residents work.
The nonprofit developer offered to beat competing offers for the property, but a deal could not be reached, and the apartments appeared to be at risk of becoming market-rate condominiums.
EAH and its development partner, Devine & Gong, Inc., along with residents, activists, and government officials continued to fight to save this critical affordable housing development on the edge of Honolulu's Chinatown.
Their efforts eventually brought the key parties to the table and kept them there until a deal was hammered out.
They were eventually able to purchase 389 units, or about 45 percent of the multi-building development. (Carmel Partners, which bought the rest of the large property, will retain affordability on its units for 55 years.)
To assist EAH and Devine & Gong in the purchase, the Hawaii Housing Finance and Development Corp. committed $51 million. The financing was too large for a single bond deal, so two separate transactions over two years were required.
The $107 million deal also received funding from Citi Community Capital and Enterprise Community Investment.
Developers committed $18.5 million toward renovating the property. They are also assuring that the property, which serves residents earning no more than 60 percent of the area median income, remains affordable for decades to come. —Donna Kimura
Developer: New York City Housing Authority Architects: Multiple firms are involved
Major Funders: Citi Community Capital; New York City Housing Development Corp.; New York City Housing Authority; Department of Housing and Urban Development
NEW YORK CITY—In one of the largest affordable housing transactions in recent years, the New York City Housing Authority (NYCHA) federalized 21 developments to provide much-needed renovations at the properties and improve the overall financial health of the agency.
Of NYCHA's 334 housing developments, these 21 properties, with more than 20,000 units, were built by the city and the state after World War II and received no federal funds even though they operated as public housing.
The housing authority had committed nearly $700 million in operating subsidy and $225 million in capital to the properties since 1998.
The situation “threatened NYCHA's ability not only to maintain the 21 state-city developments but also to maintain the 178,000 units that comprise the entire NYCHA public housing portfolio,” says Sonya Kaloyanides, general counsel.
In 2010, NYCHA jumped at an opportunity to solve this problem.
The American Recovery and Reinvestment Act (ARRA) included a provision waiving the Faircloth Amendment to permit public housing authorities to develop additional public housing units using ARRA funds, explains Kaloyanides.
In order to “redevelop” existing units of unsubsidized public housing, the developments had to be sold in an “arm's-length” transaction to a third party, and the transaction had to be a mixed-finance deal that used ARRA funds but no other federal public housing monies.
Working with the New York City Housing Development Corp. (HDC), Citi Community Capital, and the Department of Housing and Urban Development, NYCHA successfully federalized the 21 properties.
To do so, HDC structured one of the largest bond and low-income housing tax credit transactions in the nation. The deal brought in more than $400 million in new money.
The properties are being rehabbed, and they now qualify for federal funds. That benefits the entire NYCHA portfolio. —Donna Kimura
Developers: Preservation of Affordable Housing and United Front Development Corp. Architect: ICON architecture, inc.
Major Funders: JPMorgan Capital Corp.; National Affordable Housing Trust; Massachusetts Department of Housing and Community Development; MassHousing; City of New Bedford; Department of Housing and Urban Development; Massachusetts Housing Investment Corp.; Unum Insurance; National Funding
NEW BEDFORD, MASS.—Temple Landing is the complete reimagination of a neighborhood.
The nonprofit Preservation of Affordable Housing (POAH), in partnership with the United Front Development Corp., rescued an aging affordable housing development and reconnected the residents with the rest of the city.
“We broke down the walls between a project and the surrounding community,” says Rodger Brown, senior developer at POAH.
The 200-unit United Front Homes was a Sec. 236 project built in 1972. The site was a “super block” of 20 buildings. More than 40 units sat unoccupied because of disrepair, and operating shortfalls put the property at risk of failure.
POAH acquired the development in 2008 and set out to solve the property's many problems.
First, developers eliminated the super block through a combination of selective demolition and new construction. While trying to preserve as much of the development as possible, they removed the ends of some buildings and demolished others. New buildings were constructed to replace the demolished units. The move established a street grid that connects the residents with the neighborhood. It also provided a better unit mix.
Renamed Temple Landing, the new development has 173 units, including 18 for those earning no more than 30 percent of the area median income (AMI) and 121 at below 60 percent of the AMI. The rest are restricted at 80 percent to accommodate existing tenants.
POAH preserved the Sec. 236 interest reduction payment subsidy through a decoupling of the note and an award of Sec. 8 enhanced vouchers. The $42.6 million effort used multiple funding sources, including low-income housing tax credit equity from JPMorgan Capital Corp.and National Affordable Housing Trust. —Donna Kimura