Fannie Mae Offers Incentives Tied to Well Being of Tenants

Fannie Mae is offering incentives for borrowers that are tied to providing services that improve the health and well being of residents. From an article in Multifamily Executive:

The incentive, in the form of a lower borrowing rate, is called Enhanced Resident Services and aims to foster services that address the needs of renters and support health and wellness programs, day care, food access, youth and education programming, and job training, according to Fannie Mae. The new offering became available to borrowers on Jan. 15.

“We believe the strength of an affordable rental housing property is directly linked to the health and stability of the people and families who live there,” said Bob Simpson, vice president of affordable and green financing at Fannie Mae, in a statement. “Affordable borrowers have recognized the value of providing enhanced resident services at their properties for years but have been constrained by the inability to ensure a long-term source of financial support. By participating in our Healthy Housing Rewards program, borrowers will save between $15,000 and $75,000 per year. The amounts saved can be used to offset resident-services costs at [the borrowers’] property for the life of the loan, thus ensuring that the low-income residents who live there have access to health care, education, and other community services.”

Fannie will implement Enhanced Resident Services with the assistance of Stewards for Affordable Housing for the Future (SAHF), a nonprofit, multistate group of affordable housing providers that offers initial and ongoing compliance certifications for both the borrower and the multifamily affordable housing property providing the special services. To qualify, at least 60% of the units in the properties seeking the pricing incentive must serve residents earning 60% or less of the area median income.


The Case for Amenities in Workforce Housing

Today’s Wall Street Journal (4/15/15) has an interesting article about “luxury workforce housing” being built in Mount Vernon, NY:

…when completed early next year, 203 Gramatan Avenue, in Mount Vernon, N.Y., will include a host of amenities often found in luxury buildings, even though it will house families and individuals who qualify for affordable housing, which in this case is defined as households with incomes no more than 60% of the area’s median income.

Apartments in the $60 million, 159-unit development will have large floor plans, wraparound picture windows, oak floors, stone kitchen countertops and washers and dryers—features often missing from affordable housing. Shared amenities will include a gym, cinema room, children’s playroom and rooftop terrace…

There is a business reason for adding luxury amenities to workforce housing, Mr. Fine said. He said his firm owns an affordable apartment building in upper Westchester that has never had a vacancy in the 2 ½ years that it has been open because demand runs so high.

Still, the city had to provide incentives to Atlantic and Kenwood to consider the “luxury affordable” model. The inducements included a $3 million subsidized loan to pay for upgraded streetscapes and public improvements. The development also was awarded funds from state and federal low-income tax credits.

Catering to Cyclists

A new trend in apartment development seems to be targeting the cycling crowd. From a story in the Wall Street Journal:

Seattle’s Velo building in Fremont is built right off the Burke-Gilman bike and recreation trail. Opening this weekend, the 171-unit building, like Vélo North Loop, takes its name from the French word for bicycle (the two buildings are unrelated). It offers a bike-maintenance area as well as a bike wash and storage, both in the garage and on the main level. Apartments will also have bike-storage niches.

Jim Atkins, chief operating officer and managing director of Mack Urban, Velo Fremont’s developer, says the building was built with wider hallways and doorways so residents can wheel their bikes to and from their units. Lobby fabrics and floor materials were chosen in part because they could withstand wear from bike tires. Even the artwork in the building has a cycling theme.

Rents in the building range from $1,600 for one-bedroom apartments to $2,495 for two-bedrooms. Mr. Atkins estimates that 85% of renters will be bringing bikes.

Nationally, commuting by bike grew by 62% between 2000 and 2013 in the U.S., according to the League of American Bicyclists. In 2002, there were seven bike-sharing programs world-wide offering subscription-based, short-term bike rentals, according to MetroBike, a bike-sharing consultancy. Today, there are 750…

In some cities, bike infrastructure is prompting real-estate development. Many of the newest luxury apartment and condo buildings in Minneapolis are rising along the city’s Midtown Greenway, a 5½-mile-long bike and pedestrian trail converted from an abandoned rail corridor. Soren Jensen, the executive director of the Midtown Greenway Coalition, says that historically, buildings in the area were constructed with main entrances facing vehicular roadways.

You might think that this doesn’t apply here in the Piedmont Triad, but Greensboro’s Greenway is already generating interest from developers – in fact one of the stops on this year’s PTAA Bus Tour was the Greenway at Fisher Park – and Winston-Salem has a greenway that is partially developed. In fact you’d be hard pressed to find a municipality that doesn’t have the development of walking/biking infrastructure as part of its comprehensive plan. Add to that the demographic trends we’re seeing and catering to the cycling community starts to make all kinds of sense.

Increased Competition, Cost of Turns Good Reasons to Focus on Renewals

According to a recent NMHC survey resident renewal intent dropped from 65% in the second quarter of 2010 to 54.9% in the fourth quarter of 2013. That number could drop further considering there are 240,300 units scheduled for delivery this year, and considering how expensive turns can be – between $1,500 and $2,000 per unit on average – it’s going to be increasingly important for property managers to focus on retention tactics.

Multifamily Executive recently ran a piece about renewals that had some tips and tactics for boosting renewals. Here’s a taste:

Making sure associates are communicating on a personal level with residents is part and parcel to the corporate culture, one of the most important ways the FSSR office touches base, Casio-Smith says.

“You’ve got to follow up with them every chance you get,” she says. “If you know something personal about them, if it’s their birthday or if you know their wife is in the hospital battling cancer, then you should acknowledge that. Or it could be just following up with them on something as basic as service request.”…

And then there are renewal incentives:

Some of the company’s most popular incentives include one-time complimentary house cleaning or valet laundry service. And it’s easy to develop a relationship with the companies offering the cleaning services since they may garner new business from the apartment community through the renewal gifts…

Kristin Stanton, senior vice president of operations at Greensboro, N.C.–based Bell Partners, saysupgrades to homes works in some markets while it doesn’t work in others.

Interior upgrades, such as accent wall paint, upgraded light fixtures or the addition of ceiling fans, seem to be the most popular kind of renovation that people prefer, Stanton says. And if that doesn’t convince someone to stay, there are other upgrade options as well.

Process Begins for Conversion of Old Gibsonville Elementary to Apartments

From a story in the Burlington Times News we get a little background on the planned conversion of Old Gibsonville Elementary to apartments :

Richard Angino, owner and managing member of Third Wave Housing in Winston-Salem, said there will be a lot of paperwork to get through before there will be anything but cleanup in the empty school.

Most important will be the nine-month process of getting the building listed in the National Register of Historic Places.

That makes the building eligible for 20 percent state and 20 percent federal tax credits, according to Preservation North Carolina, the private nonprofit statewide historic preservation organization helping to put this project together…

The old school at 500 Church St. is one of the oldest buildings in Gibsonville and occupies a spot right in the middle of town. Almost everyone who grew up there has a personal connection.

Guilford County Schools used the 40,386-square-foot building from 1923 until a new school came online in 2006. It has been empty since, and falling apart.

The old and new schools are side by side, so the school system wanted something done…

Angino said his rough estimate for the cost of project is $3 million to $4 million. 

NMHC Survey Shows Amenities Increasingly Important

From Multifamily Executive:

To better crack the code on what apartment renters want, the National Multi Housing Council (NMHC) and Kingsley Associates have partnered on one of the largest surveys of apartment resident preferences. The survey was sent to 200,000 residents across the country, and responses were collected from renters in 38 states, covering 84 MSAs and a wide variety of property classes and building types and sizes…

One of the clearest takeaways from the survey results was that the right level and mix of community amenities has become a much more important factor when renting an apartment…

In fact, respondents cited amenities as one of the top three reasons they decided to rent versus own, after location and lack of a down payment. More interesting is that, compared with previous surveys, a larger percentage of respondents in 2013 pointed to community amenities as a top factor, while a smaller percentage indicated the lack of a down payment as such…

Moreover, amenities are even more important for people looking to rent in higher-end communities. More than 75 percent of respondents at Class A properties cited community amenities as a high priority, compared with 58.8 percent in Class B properties and 49.2 percent at Class C properties.

FHA Change Could Encourage Mid-Rise, Mixed-Use Development

From a MultiFamily Executive post:

Before WWII, one of the basic ingredients for an active Main Street was ground-floor retail in residential projects. Federal regulations changed after the war, and for decades the Federal Housing Authority (FHA) restricted the commercial component of a residential project to no more than 25 percent of the gross floor area/net rentable space or gross income from a project. 

“Developers of apartments or condominiums were discouraged from medium-rise mixed-use projects because they weren’t eligible for financing, housing preservation credits, and low-income tax credits,” says John Norquist, president and CEO of the Congress for New Urbanism (CNU) and ECOHOME’s 2013 Vision 2020 chair for Sustainable Communities…

CNU and its partners created the “Live/Work/Walk: Removing Obstacles to Investment” initiative to inspire policy reform. In September 2013, the effort received a significant boost when FHA raised the restriction to 35 percent and up to 50 percent on a sliding scale of factors. CNU is hoping that Fannie Mae, Freddie Mac, and HUD’s 221d4 and 220 programs will follow suit this spring with an increase in percentages. 

“We aren’t advocating that there would be retail on every street—it should be a zoning issue for local governments,” says Norquist. “Raising the cap opens the doors to more efficient, environmentally friendly, walkable centers and expands housing options for lower-income people. It delivers both environmental and public benefits.” 

Economist Argues Against Favoring Homeownership

From the Freakonomics blog:

The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.

For the full story visit

Saxapahaw Rivermill – Lessons in Mixed-Use, Historic Tax Credits and HUD Backed Loans

An interesting story in the Triad Business Journal on the redevelopment of Saxapahaw Rivermill in Alamance County into a mixed-use success story. Here’s a highlight:

During the next decade, with historic tax credits, a mortgage from a Raleigh bank, a federal HUD-backed loan and a good bit of their own money, the Jordans created Saxapahaw Rivermill. They then poured $11 million into the lower factory to transform it into 175 stylish, riverfront apartments and lofts. The units rented quickly after opening in 2006. There’s been a waiting list for years.

Read the whole story here (subscription required).

Rent an Apartment and Share a Car

From the June 15, 2011 Wall Street Journal:

Equity Residential, the country’s largest residential real-estate investment trust, hopes its latest perk for its apartment tenants will drive traffic to its doors.

The company struck a deal with Zipcar Inc. to add car-rental services to more of its apartment communities in New York, Boston, Washington, D.C., and Seattle.

By the end of the summer, more than 100 Zipcars are slated to be parked in Equity Residential communities, giving more than 17,000 residents access to the vehicles, the company says. A small number of the company’s properties already had arrangements with Zipcar, but the program is being expanded and formalized.

Tenants receive discounts on Zipcar’s membership fees and on hourly rates. Neighbors of Equity Residential apartment complexes can also rent the cars.