You can add financing to the litany of challenges being faced by affordable housing developers. From the Wall Street Journal:
Rising interest rates are undermining efforts to build more affordable housing, creating larger funding gaps for an industry already grappling with cuts in government subsidies and rising construction costs.
This year’s climb in borrowing costs—coupled with expectations that they will keep rising—has driven down the amount of debt used to fund affordable housing deals, said Michael Novogradac, managing partner of Novogradac & Co., an accounting firm that specializes in affordable housing…
The permanent debt rate—a measure of the long-term debt projects pay to lenders—was 4.18% for a Bridge project completed in the Mission District of San Francisco in 2016. This year, a proposed development less than a mile away, with the same developer and a similar amount of debt, closed at a rate of 5.06%. The fed-funds rate rose about 1% in the interim…
Affordable housing, which constitutes about a quarter of all new apartment construction in the U.S., is already facing a number of difficulties, including a decline in government subsidies and rising construction costs.
757 North Apartments in Winston-Salem are due to open on July 1, but you can get a sneak-preview by checking out a slideshow on the Triad Business Journal’s site. Here’s some more info from the accompanying article:
“The amenities are typical of new construction for multifamily communities,” Nelson said. “We tried to create all the amenities we think working professionals use.”
Nelson said Laurel Street worked for more than a year on the development with Goler Community Development Corp., which is also an investor in the 2.2 acre project, and the city of Winston-Salem.
Laurel Street bought the property from Goler, which is trying to revitalize the Goler neighborhood, once considered the downtown for the city’s black community.
Rents at 757 North range from $740 to $1,550. Nelson said 25 percent — roughly 29 units — are set aside for renters making 80 percent or less of Winston-Salem’s median income, with rents ranging from $740 to $850, Nelson said.
The city of Winston-Salem approved a $1.25 million subsidized loan to be repaid over 20 years as well as a $325,000 land grant.
Affordable Housing Management, Inc. has begun construction of a 16-unit community in Greensboro:
Affordable Housing Management, Inc. (“AHM”) announced it recently began construction on Hope Court, a 16-unit supportive apartment community located near the intersection of Gate City Blvd. (High Point Rd) and Holden Road. The property will offer one, two, and three bedroom non-smoking apartments affordable to individuals and families earning below fifty percent (50%) of Area Median Income. Six units will be reserved for households with a disabled or formerly homeless member…
Hope Court is funded by the City of Greensboro, the North Carolina Housing Finance Agency (NCHFA) – Supportive Housing Development Program, and AHM. Additionally, grants were provided by Federal Home Loan Bank of Pittsburgh, Wells Fargo Foundation, Community Foundation of Greater Greensboro and the Lookout Foundation.