Opportunity Around the Edges

3 min read

It’s funny to think that there are niche opportunities in affordable housing.

When mining the publications of other multifamily and commercial real estate organizations for new ideas and insights, I frequently learn that they are exploring tax credit development as a niche opportunity. That’s why I always enjoy brainstorming for TCA’s annual “Niche Development” issue. When we get together for our editorial meeting it’s always fun and sometimes surprising to discuss outside-the-box topics and example projects.

Ours is a remarkably creative business, and we try to highlight innovative approaches to tax credit development that have not hit the mainstream. Just as beauty is in the eyes of the beholder, so too are the niches at the edges of our industry. With a little luck, the right opportunity, some innovative thinking and/or a well-timed policy change, these outliers can develop into a new industry.

This month I’d like to highlight a couple of these interesting “outliers.” I’m not sure that they will ever get to scale, but I hope they do!

Reclaiming a Blighted Neighborhood

In partnership with a local nonprofit, Gorman & Company, Inc. recently broke ground on the seventh phase of a scattered-site neighborhood redevelopment initiative in Milwaukee. Leveraging low-income housing tax credits and local resources, the project includes the rehabilitation and conversion of boarded-up foreclosed homes into high-quality rental housing, together with infill new construction on vacant lots. The initiative also provides training for chronically unemployed individuals in the construction trades.

Leveraging New Rental Assistance on Older Properties

In partnership with the St. Francis Foundation, a local nonprofit, the Vesta Corporation will be renovating a 47-year-old Section 202 elderly supportive housing property in Mayfield Heights, Ohio. The project will leverage a federal Senior Preservation Rental Assistance Contract (SPRAC), a new type of project-based rental subsidy program targeted to “old” unassisted Section 202 Direct Loan properties.

Vesta Corporation, one of only 12 developers nationwide to be awarded a new SPRAC, is innovating a new form of public-private partnership for an aging and at-risk portfolio. More than 200 properties developed before 1974 are eligible for this program. The vast majority of the owners, like the St. Francis Foundation, need a creative partner to help them navigate their options. SPRAC, if adequately funded by Congress, will facilitate large-scale opportunities to facilitate many more joint ventures, resulting in dramatic physical improvements and much-needed security for residents through this rental assistance contract.

You’ll find other interesting examples of niche development in this month’s issue. While not all of these may be your cup of tea, I hope they inspire some creative thinking. To paraphrase Paulo Coehlo, the Brazilian novelist and lyricist, searching can be as interesting as finding.

Thom Amdur is Associate Publisher of Tax Credit Advisor and Executive Director of National Housing & Rehabilitation Association