Case Study

New Life Homes in Tacoma, WA

5 min read

Tacoma Church Supports Vulnerable Populations

Faith-based affordable housing development is on the rise, and a good example of it can be found in Tacoma, WA where Shiloh Baptist Church is turning two parcels of land it owns into 60 units of housing for vulnerable populations.

It’s not the congregation’s first foray into affordable housing, according to Pastor Gregory Christopher of Shiloh Baptist. But the six homes a previous pastor built on two lots across from the church had grown dilapidated, so Shiloh Baptist has torn them down and is replacing them with apartments.

“That way we can provide more housing,” he says. “We thought it was the right time to broaden the vision of the former pastor.”

The church has another piece of property it is looking to develop “within the next three years,” says Pastor Christopher, and the new housing may allow some of the homeless men of the church’s shelter, Shiloh Retreat Center, to qualify for the new units.

Populations to be housed include individuals in recovery for substance abuse, those leaving the criminal justice system, formerly homeless persons, persons with disabilities and veterans earning no more than 30 or 50 percent of area median income (AMI).

Construction is now underway at the project, and the minister says the completion date should be September of this year.

Many Financial Partners
Along with Beacon Development Group, Shiloh has assembled a robust capital stack for its New Life Homes project, including $14.6 million of construction money from KeyBank. Washington Community Reinvestment Association provided a permanent loan of $2.9 million with an interest rate of 6.584 percent. In addition, the project will have substantial subordinate financing from multiple sources, including:

  • $6 million from the Washington State Housing Trust Fund;
  • $4.4 million from the City of Tacoma;
  • $5 million from Pierce County; and
  • A $1.1 million GP Capital Contribution for land.

The KeyBank construction loan, done through its community development and lending investment unit, includes Low Income Housing Tax Credit equity syndicated by National Equity Fund (NEF) through its Emerging Minority Developer Fund (EMDF). (See The Mission Is Most Important.)

Such church affordable housing development is often referred to by the acronym YIGBY, for Yes in God’s Backyard, but it is a decentralized movement varying from development to development. (See Yes In God’s Backyard.)

Pastor Christopher says the 500-member, working-class congregation decided to do the development both to follow the teachings of Christ to help the poor, and “to help lower-income families get affordable housing.”

Beacon Development Group, Seattle, listed the value of the property at $30,101,000 and marked it as “fully funded.” Pastor Christopher recalls the total development cost as more like $34 million.

Schemata Workshop of Seattle is the architect. It describes its task to “design two buildings on sites adjacent to the Church in the Hilltop neighborhood of Tacoma, a historically Black neighborhood experiencing a significant real estate development boom, and therefore susceptible to significant displacement.” 

Pastor Christopher agrees with this. He says Hilltop neighborhood families that have been in the neighborhood for generations have been forced to leave, as rents for a two-bedroom apartment climbed from $700 a month to $2,300. Prices for owning homes have skyrocketed as well.

Separate Sites for Buildings
“The two buildings are located on separate sites and one (at 13th Street) will serve as transitional housing for 20 individuals or families and the other building (on I Street) will serve 40 individuals or families. The zoning, site topography and proximity of power lines informed the conceptual designs,” the architectural firm says.

“Tacoma Housing Authority wants to study the optimal size of the project site to right-size operational costs –requesting conceptual designs that met the maximum building height, as well as options that under-developed the site capacity.”

They will be wood-frame buildings, says the minister, with one- and two-bedroom apartments ranging from 400 to 700 square feet. Amenities will include a community room and outdoor spaces for gardening or meditation. The signing of a management firm is imminent, the pastor says.

 Supportive services will be provided by Believing In Myself Again (BIMA) Services. The Department of Veterans Affairs will provide services for the Veterans Affairs Supportive Housing (VASH) units and coordinate with BIMA. “We will have a case manager working full-time in both buildings,” Pastor Christopher says.

The VASH program is an unusual alignment of two federal bureaucracies for maximum impact. Often called HUD-VASH, the Department of Housing and Urban Development provides housing support (through the Tacoma Housing Authority), and the VA provides supportive services for the vets.

According to New Life Homes partner NEF, “Supportive housing improves employment, mental and physical health and helps people live with stability, autonomy and dignity. And it helps build better communities by improving neighborhood safety and beautifying city blocks with new or rehabilitated properties.”

Shiloh Baptist Church dates to 1953, according to its website. Significant events on its timeline include the $1.2 million construction of a new sanctuary in 1999 and the acquisition of two properties on South I Street that same year.

NEF is Backing Emerging Developers
National Equity Fund (NEF) has created a larger than $100 million emerging developers fund to help generate Low Income Housing Tax Credit equity for these projects. Some of the characteristics are:

  • The developer is majority owned and managed (for profit) or majority governed and/or managed (nonprofit) by an individual(s) identifying as members of one or more racial minority groups that have been historically underrepresented in LIHTC.
  • The developer will have materially participated in the development activities of at least one completed LIHTC development as developer, co-developer or have other transferable real estate development experience.
  • Developers must demonstrate their long-term commitment to LIHTC development.

Fund benefits include:

  • The fund will provide limited guarantee backstops to bridge any gaps between the developer’s financial capacity to provide guarantees and underwriting requirements as needed.
  • The fund will provide LIHTC equity to the approved partnership entities of participating developers.
  • The fund will provide technical support funds to pay for various consultants and/or other professionals who assist with growing the capacity of the developer as needed.
Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.