Michael Costa’s career could have been drastically different. With three offers to play professional baseball coming out of high school, he instead opted to go to college and get a full education.
That may be baseball’s loss, but it’s very fortunate for the thousands of low- and moderate-income families and seniors he’s helped house.
Costa, president and CEO of Gardena, Calif.–based Highridge Costa Cos.—Highridge Costa Housing Partners and Highridge Costa Investors—has been involved in the development of over 40,000 units of housing throughout his nearly 40-year career.
“Mike is not only an influential advocate, practitioner, and pillar of the industry, but he’s utilized his knowledge and expertise to finance, construct, and operate tens of thousands of affordable rental housing units throughout the country, making a quantifiable difference in the lives of hundreds of thousands of people in need,” says Thomas Erickson, senior vice president at Highridge Costa Cos.
Costa got his start in the real estate industry fresh out of California Polytechnic State University with Calmark.
He began to focus on affordable independent senior housing in the early 1980s and helped to create 10,000 units of senior housing under the firm’s Heritage Park program. For eight years, he was president of Calmark Multi-Homes, helping it to become one of the nation’s largest builders of independent senior apartments.
In 1994, Costa was asked to create and lead Kaufman and Broad’s new multifamily company, the first chapter of several that would lead Costa to where he is today.
While initially nervous about being part of a big public institution, Costa soon found the benefits of the banking relationships and lines of credit the big builder could offer, allowing him to spend more time on getting better sites and more developments into the pipeline.
He also learned the syndication business and started to sell its low-income housing tax credits directly.
“We were the first developer in this game to sell our won tax credits in 1996,” he says. “It became a really unique company. We had in-house syndication, in-house asset management, in-house construction, and a couple of bankers to run our financing. It was a one-stop shop in this tax credit business.”
The company then went through many iterations, but Costa was the one constant, remaining at the helm.
In 2000, apartment developer Don Simpson bought the company and renamed it Simpson Housing Solutions. Eight years later, Costa formed a partnership with MacFarlane Partners to acquire the Simpson affordable housing portfolio; however, the economic downturn derailed that plan. Citi Community Capital, which had provided a loan to buy the Simpson portfolio, began a “negotiated foreclosure” that gave Costa the right to buy and hold on to the properties.
In 2010, Costa partnered with John Long of Highridge Partners and Citi to preserve the properties that he and his team had developed since 1994.
Under the company’s various identities, Costa helped develop a portfolio of over 27,000 affordable housing units throughout the United States and Puerto Rico. Highridge Costa Cos. ranked No. 13 on affordable housing finance’s Top 50 affordable housing owners list this year, with 13,720 units in 131 developments as of Jan. 1.
The company continues to ramp up its development activities, with an emphasis on building a portfolio and a team in Texas.
“I love the challenge,” Costa says. “When you look at developing market rate, it’s a lot simpler. It’s about focusing on what’s existing in the market and how you can position yourself versus the approval process and the financing. [In affordable housing], we still have to focus on positioning communities in the right locations and making sure we have the right amenities, plus the tremendous effort to get approvals and multiple layers of financing. It’s incredibly challenging but very rewarding to make that work.”
For Costa, it’s also rewarding to hear what stable affordable housing means to its residents. “Where else can you get that genuine thanks for what you do?” he says. “That drives me a lot.”
He also prides himself on helping groom the next generation of affordable housing developers.
“We’ve taken so many kids out of college, brought them into the company, and taught them the development process. The project manager manages the development from day one through lease-up and permanent loan conversion,” he says. “I lose a lot of them, but I can’t tell you how many people who have left that are now in the industry running another company or have their own firm.”
Costa also advocates for affordable housing programs on the state and federal levels. He’s active in the California Housing Consortium, the California Council for Affordable Housing, and the NAHB’s Multifamily Leadership Board. In addition, he recently finished a seven-year chairmanship for Rise Financial Pathways, a Community Development Financial Institution that provides lending opportunities and training for underserved South Los Angeles residents and small-business owners.
“Mike was one of the first private developers to build quality affordable housing in California on a large scale, even before there were widespread public assistance programs,” says Frank Cardone, president of Related California Affordable, who got his start in the affordable housing industry at Calmark from Costa. “He’s provided, and continues to provide, strong leadership in the industry and has been a mentor to many who have themselves gone on to make significant contributions to the affordable housing industry.”
Costa, 61, didn’t totally retire his glove and bat. He still competes in national softball tournaments. He also enjoys spending time with his three children and playing golf.
