USA Properties Fund has become a partner in two affordable apartment communities in Reno, Nevada, ensuring that low-income residents can remain in their homes and benefit from a major rehabilitation of the properties.
The firm is the new partner and manager of Carriage Stone, a 55-and-older apartment community, and the former Dakota Crest community. Community Services Agency Development Corp., a nonprofit with 13 affordable apartment communities in Reno, is the other partner.
USA Properties, one of the largest affordable apartment companies in the West, doubles its number of properties in Reno with the partnership.
The communities will share the Carriage Stone name after being packaged together in order to receive Nevada Housing Division-awarded bonds for the purchase and rehabilitation of the properties. Under the agreement, the 132 combined apartments will remain affordable housing for decades.
“Reno, like most cities in the West, is facing a critical housing shortage, especially when it comes to affordable apartment communities,” said Geoff Brown, president of USA Properties in Roseville, California. “We saw the incredible need to keep the apartments affordable, while also enjoying a great opportunity to expand in Reno and Nevada.”
The apartment communities are less than a half-mile apart, close to shopping centers, restaurants, health care providers—including Renown Regional Medical Center and the VA Medical Center—and the Riverwalk District along the Truckee River.
“The apartment communities are in the heart of everything,” said Steve Gall, executive vice president of development and acquisitions for USA Properties. “It’s in an up-and-coming area in the MidTown neighborhood.”
The central location coupled with the booming demand for housing that has prompted record-high rents in Reno caused some residents and housing officials to worry whether their homes would remain affordable.
“Unfortunately, many of the existing affordable housing projects in the region are being sold to for-profit investors after the affordability period ends, and rents are then brought up to market rate,” said Leslie Colbrese, CEO of Community Services Agency Development Corp. “The affordable housing sector is losing more properties than we are developing, and it’s tough to keep up with the private-sector in terms of buying power.”
The affordable to market-rate movement has forced many low-income tenants to pay much higher rents or scramble to look for hard-to-find, lower-priced housing. For example, low-income residents applying for Community Services Agency’s affordable apartment communities have at least a two-year wait, Colbrese said.
“We need more affordable housing not soon, but now,” she said.
Rents for Carriage Stone are below the 30% threshold—and significantly less than nearby market-rate properties. And the apartments will “remain affordable for another three decades and will not be brought to market rate and further diminish our already scarce supply of affordable housing,” Colbrese said.
In addition to ensuring that low-income residents have affordable housing, USA Properties and Community Services Agency will spend at least $7.9 million for the rehabilitation of the apartment communities—or about $60,000 per unit.
New energy-efficient appliances, LED lighting, low-flow showers and toilets, and numerous other improvements are planned for the units. The apartment communities will also get new heating and cooling systems, new roofs and other upgrades, such as improvements to the fitness room, the library, and the TV room at the senior apartment community and new furniture and outdoor play equipment and upgrades to the swimming pool at the other property.
The rehabilitation effort will be completed over an 18- to 24-month period.