Institutions May Be the Key to Unlocking Affordable Housing Developments

By Margaret Jackson Thursday, November 26, 2020

Partnering with institutions such as churches, synagogues, and even prisons is one way developers can bring affordable housing to markets where land is scarce and expensive.

Striking a deal with an institution can result in affordable housing that’s more suited to families than the small studio or one- and two-bedroom units that are currently being developed, said architect Wendi Shafran, a principal FXCollaborative, which has offices in New York and Washington D.C.

“Thoughtful development creates a sense of community and drives services and sustainable housing,” she said. “Most of the new affordable housing stock is smaller apartments. Over the last six months, the pandemic has really exposed a lot of inequities in affordable housing and how it’s been developed in the past. There isn’t enough of it and we need more of it, but it’s not just about the numbers — it’s about the quality of living. You have to think about people’s health and welfare and what they really need.”

FXCollaborative transformed the historic Navy Brig site, a former prison, into a mixed-use development across from the Brooklyn Navy Yard. The project includes three affordable residential buildings, supportive housing, market-rate townhouses, retail space, and shared green space.

“It wasn’t just about constructing the building — it was about integrating the community and being responsive to their needs,” Shafran said.

Developers who partner with an institution like a church or a synagogue that wants to fulfill a mission to house people often can get the land for less if they build affordable housing.

“In New York City, most lots are taken up,” Shafran said. “A lot of the lots that are left are irregularly shaped or owned by an institution — they’ll give the land to a developer, but they want to have a space for themselves as well.”

Shafran points to the redevelopment of the historic Loretto Heights campus in Denver as a good example of how, with creative financing, old buildings can be repurposed to help fill the need for affordable housing. The development team behind the project includes Hartman Ely Investments, Proximity Green, PNC Real Estate, and the Denver Housing Authority. The former dormitory, chapel, attics, and gymnasium are being converted into 72 affordable housing units for tenants whose income falls in or below a threshold of 30% to 80% of the area median income, which currently is $100,000 for a family of four in Denver.

Denver-based developer Susan Powers, president of Urban Ventures LLC, has partnered with churches and convents to bring more affordable housing to the city. She worked with the Sisters of St. Francis to redevelop the Marycrest convent into a modern, sustainable community that includes a mix of affordable apartments, intergenerational cohousing condominiums and market-rate townhomes. The project also has commercial space for neighborhood-serving retail, a one-acre production garden, community plots, and the Groundwork Greens Greenhouse. Both the greenhouse and the garden sell fresh produce to the neighborhood and Denver businesses, as well as provide job training to low-income youth.

While there was no requirement to build affordable housing in the project’s co-housing section, Powers decided to do it anyway.

“Typically in co-housing, it’s the upper middle class and wealthy people who live there,” Powers said. “I wanted it to be a mixed-income community. We also realized if we didn’t bring affordable units in, we wouldn’t get families.”

Commitment to Affordable Housing

Powers is no stranger to developing affordable housing. Among her first projects was Fire Clay Lofts, a 166-unit condo project completed in 2008. 20% of the units were affordable, even though it wasn’t a requirement.

“We did Fire Clay because we wanted to increase the affordability of living close to downtown,” Powers said. “Instead of affordable housing being something we feared, we looked for ways to create it because we believed in it.”

Creativity plays a huge role in the development of affordable housing. When Continuum Partners CEO Mark Falcone was purchasing land to develop the Museum of Contemporary Arts in Denver, the seller stipulated that he would have to fulfill its commitment to build affordable housing. Falcone wasn’t interested, but Powers said she’d do it for him. Of the 69 units in the resulting Monarch Mills project, 59 are affordable.

“He gave the land to us for free,” Powers said. “You just negotiate to make it viable.”

Now, Powers is working on a project with St. Andrews Episcopal Church. Under terms of the deal, Urban Ventures will have a 75-year ground lease with the church and develop a community for young people facing homelessness.

“The church had been looking for many years for their property to be used for something that is consistent with their mission,” Powers said.

Urban Ventures will apply for low-income housing tax credits in February. If the Colorado Housing and Finance Authority (CHFA) awards the project the tax credits, Urban Ventures will bring in an investor to buy them, which will provide equity to the project. Residents in the project will pay 30% of their income in rent, and a voucher provided by the Denver Housing Authority will make up the rest.

“There’s such a priority now for these supportive housing projects,” Powers said. “The only answer is to keep building and be creative. You can do 35 units here and 35 units there, but the need is in the thousands.”

About the Author

Headshot for author Margaret Jackson

Margaret is an award-winning journalist who spent nearly 25 years in the newspaper industry. She has covered a variety of business topics, including residential and commercial real estate, technology, telecommunications, and cannabis.

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