The long-term affordability of a 171-unit apartment complex has been preserved with the help of the Rental Assistance Demonstration (RAD) program in Neptune, N.J.
Silver Street Development Corp. acquired the senior housing community about a year ago and has worked to renovate the building as well as restructure the financing to make more units affordable.
When the 35-year-old property was built, it contained 81 rent-subsidized units via a project-based Rental Assistance Program (RAP) contract operated under the Department of Housing and Urban Development’s (HUD’s) Sec. 236 program.
Silver Street, working with the Nixon Peabody law firm, used the federal RAD program to increase the number of affordable homes at Silver Vistas, adding 63 subsidized units through a 20-year project-based Sec. 8 contract.
RAD is the centerpiece of the HUD’s strategy to preserve at-risk public and assisted-housing developments. The first component allows public housing and moderate-rehabilitation properties to convert, under a competition limited to 60,000 units, to long-term Sec. 8 rental assistance contracts. The second component allows Rental Assistance Payment, Rent Supplement, and Mod-Rehab properties to convert tenant-based vouchers issued upon contract expiration or termination to project-based assistance.
The New Jersey Department of Community Affairs further expanded the total subsidized unit count by providing a 15-year extension of the pre-existing Sec. 8 contract, which covered 21 units, raising the final total to 165 subsidized units, or 96% of all the apartments, at Silver Vistas.
“This effort has reduced rent burden in many cases for existing residents and opened up the possibility of reaching more residents of need down the road,” said Christopher Poulin, principal and COO at Silver Street Development, during a recent ceremony to celebrate the completion of the work. “We used the programs to their maximum potential, and what did not exist before, unlike the four walls around us, is a reality for those touched by its reach.”
At Silver Vistas, his firm committed approximately $8.8 million in renovations, including replacing the roof and building systems and updating the apartment units. The team also added security cameras and a high-tech door entry system to enhance tenant security.
“It’s wonderful, especially for a property that serves elderly residents,” said Roger Gendron, president and founder of Silver Street, which has completed other RAD projects, including one with more than 500 units in Rochester, N.Y.
The firm spent approximately $55,000 per apartment.
Silver Street bought the property from an affiliate of The Michaels Organization. Although the development had been well maintained, its age meant that the 11-story building was in need of physical improvements.
To finance the $32 million project, Silver Street closed a 4% low-income housing tax credit (LIHTC) transaction financed by $15 million in short-term conduit bonds issued by the New Jersey Housing and Mortgage Finance Agency as well as $22.5 million in permanent financing from PGIM Real Estate Finance and Freddie Mac. Silver Street also raised approximately $8.5 million of equity from the sale of LIHTCs and federal energy credits through syndicator Boston Financial Investment Management. The firm also secured a 30-year payment-in-lieu-of-taxes agreement from Neptune Township.
Other partners include The Architectural Team and contractor Procida Construction Corp.
With a growing portfolio of more than 10,000 units, Silver Street has offices in Portland, Maine; Wilmington, N.C.; and Washington, D.C.
