Call this a tale of two apartment communities.
Both serve moderate-income families, primarily Latinx, in Marin County, California, the nation’s costliest jurisdiction. One property demonstrates how a mission-focused buyer, syndicator, and seller can preserve moderate-income housing despite hostile market conditions. The other…well, let’s just say it shows how the flipside works to deplete valuable moderate-income housing.
“We attempted to preserve a 99-unit NOAH (naturally occurring affordable housing) property,” explains Jet Doye, director of development for BRIDGE Housing, a 40-year-old nonprofit affordable housing developer serving California, Oregon, and Washington. “We were outbid by an opportunistic private equity company.”
You can guess the outcome. Within weeks, residents were asked to vacate their homes for a major renovation and market-rate positioning.
Few communities can sustain this kind of workforce housing loss, so preserving clean, safe housing for families earning 80% to 100% of the area median income (AMI) is now a key housing strategy. It’s led to a dual-track strategy: Advance traditional low-income housing tax credit-based projects while protecting existing NOAH and regulated inventory.
Few understand this challenge better than Daryl Shore. “We must continue to build affordably priced units while we preserve existing affordability. We can’t afford to continually lose regulated and NOAH properties to market-rate interests,” says Shore, head of structured finance for the National Equity Fund (NEF), one of the nation’s largest and oldest nonprofit, mission-driven housing tax credit syndicators.
Working with Shore and his team at NEF, BRIDGE Housing successfully concluded the purchase of a pair of side-by-side apartment communities jointly called Terra Linda Northview. Terra Linda Northview represent 125 affordable housing units. The enabling capital was secured through a $250 million set-aside for project-level affordable and workforce housing financing from NEF and Morgan Stanley. City and county agencies also added funding along with a new regulatory agreement that ensures all 125 apartments stay restricted at 80% of the AMI for 99 years.
“The acquisition is a pioneering case study for the preservation of workforce housing,” Doye says. “NEF and Morgan Stanley supported us with the flexibility and speed required to quickly capitalize on this acquisition opportunity.”
The freedom to swiftly seize opportunity helps level a playing field that often tilts against affordable housing objectives. “It’s tough to compete against developers with deep pockets and are not mission-driven. Affordable housing developers can now confidently consider opportunities knowing they have the financial muscle to execute rapidly, too,” Shore says.
It's a powerful equalizer. “This game-changing commitment gives us speed, flexibility, and a sharper competitive edge to accelerate our delivery of quality, affordable housing,” affirms Ken Lombard, BRIDGE Housing president and CEO.
It’s a game-changer for Terra Linda Northview families as well. Plans are underway for $10 million in interior and exterior facility improvements. And that’s just the beginning: BRIDGE Housing is eyeing similar opportunities in Northern California’s San Mateo County and elsewhere.
Learn how you can sharpen your competitive edge and advance your affordable housing mission.