Leading affordable and workforce housing stakeholder Standard Communities has formed a joint venture with developer Faring to create more than $2 billion of “missing-middle” housing throughout California over the next 18 to 24 months. The joint venture, Standard-Faring Essential Housing, will focus on the new construction of middle-income housing as well as the acquisition and conversion of existing market-rate developments.
Standard-Faring Essential Housing is utilizing California’s public-private partnership structure that was designed to create housing for households with incomes between 80% and 120% of the area median income (AMI). Traditionally, state-administered affordable housing programs have focused on assisting households earning no more than 80% of the AMI, leaving a gap for those who earn too much to qualify for affordable housing but can’t afford market-rate rents.
“By focusing on middle-income housing, California cities can ensure that middle-income families and essential workers, such as first responders, hospital and health care staff, and teachers, can afford to live near their jobs in the communities they serve,” said Jeffrey Jaeger, principal and co-founder of Standard Communities.
The joint venture recently created over 650 dedicated units of middle-income housing in Southern California with a total capitalization of over $400 million. These three transactions have utilized tax-exempt bond financing provided by CSCDA Community Improvement Authority. Upon taking ownership, CSCDA Community Improvement Authority worked with Standard-Faring Essential Housing as the project administrator to immediately lower rents for new residents who qualify with incomes between 80% and 120% of the AMI.
“California is in the midst of a severe housing shortage, and Standard-Faring Essential Housing’s public-private partnerships fill a crucial need for middle-income families,” said Chris Cruz, managing director of essential housing at Standard Communities.
At the end of 2020, Standard Communities did the first deal of its kind in Southern California. It worked with CSCDA Community Improvement Agency, which acquired Renaissance at City Center in Carson, Faring, Stifel, Nicolaus & Co., and the city to transition the mixed-use community from market-rate to workforce housing. Standard’s role as project administrator helped complete the transaction with a capitalization of $78 million in 54 days. Built in 2013, the property includes 150 apartments, a wealth of amenities, and over 12,000 square feet of retail space.
Utilizing the same structure, Standard, CSCDA Community Improvement Authority, Stifel, Nicolaus & Co., Faring, and the city of Glendale teamed to acquire The Link Apartments, a 143-unit mixed-use community built in 2020 in Glendale, and lower rents for new residents. The capitalization of this transaction is over $100 million.
The joint-venture’s second multifamily residential transaction in Carson in six months, the team recently acquired Union South Bay Apartments, a 357-unit mixed-use community completed in 2020. The total capitalization of the transaction is over $220 million.
“The expansion of middle-income housing is critical to California’s future as we prepare to host the Olympics in 2028 and is a key component of the state’s Regional Housing Needs Allocation goals. This new venture with Standard Communities will provide a powerful vehicle to ensure vibrant, mixed-income neighborhoods are accessible to middle-income families and essential workers across California,” added Faring CEO Jason Illoulian.
