MTC Contribution Keys New Affordable Housing Fund
The Metropolitan Transportation Commission (MTC) has approved a $10 million anchor commitment through its Transportation for Livable Communities program to establish a new $50 million revolving loan fund for affordable housing developers to finance land acquisition in select locations near rail and bus lines throughout the Bay Area.
Other investors in the Bay Area Transit Oriented Affordable Housing Fund include Morgan Stanley and Citi Community Capital, each of which provided $12.5 million; The Ford Foundation and Living Cities, a collaborative of foundations and financial institutions, which invested $3 million each; six community development financial institutions (CDFIs), which combined to contribute $8.5 million; and the San Francisco Foundation, which provided $500,000 plus the 2007 seed funding to develop the fund’s business plan.
San Francisco-based Low Income Investment Fund (LIIF) will serve as the manager of the Bay Area Transit Oriented Affordable Housing Fund. Loans will be originated by the six participating CDFIs, which include LIIF, the Corporation for Supportive Housing, Enterprise Community Loan Fund, Local Initiatives Support Corp. (LISC), the Northern California Community Loan Fund and Opportunity Fund. The Silicon Valley Community Foundation provided a $100,000 grant to support the Bay Area Transit Oriented Affordable Housing Fund.
Brigitt Jandreau-Smith, Chief Lending Officer for the Corporation for Supportive Housing, said, “CSH is proud to be an originator for the Transit Oriented Affordable Housing Loan Fund. We are dedicated to finding innovative ways to foster the development of supportive housing, and this fund will jumpstart communities’ ability to create projects in transit-rich locations where they can serve the most vulnerable Californians.”
MTC staff estimates developers can use the Transit Oriented Affordable Housing Fund to help finance the acquisition of at least 20 to 30 acres around the region, which will support development of 1,100 to 3,800 units of affordable housing, depending on the density of construction. LIIF expects to close the first deal for the new fund later this spring, with a $4.8 million loan to Tenderloin Neighborhood Development Corp. (TNDC) to finance the acquisition of a roughly 22,000 s.f. parking lot at the corner of Eddy and Taylor Streets in San Francisco on which the firm plans to build a 14-story, 150-unit complex expected to include affordable family apartments as well as ground floor retail space to which TNDC hopes to attract the Tenderloin’s first full-service grocery store. The project has received significant support from the San Francisco Mayor’s Office of Housing.
“MTC is a grant-making agency, and the funds we allocate typically get spent only once,” commented MTC Executive Director Steve Heminger. “This new affordable housing fund not only gives us four-to-one leverage with private capital, but allows our initial investment to be spent over and over again in the form of new loans.”
“We’re filling a critical void in the affordable housing finance market by making it possible for developers to do what they call ‘land banking,’” explained MTC Chair and San Mateo County Supervisor Adrienne Tissier. “Once developers start tapping the fund to secure sites, they will still need to go through local approvals processes and to line up construction financing. So it may be years rather than months before the new housing units are brought on line.”
All loans made through the Bay Area Affordable Transit Oriented Housing Fund will be for projects located in neighborhoods designated by MTC and the Association of Bay Area Governments (ABAG) as a Priority Development Area. The fund, which will operate for at least 10 years, is modeled on similar funds established in recent years in Denver, Los Angeles, Minneapolis, New Orleans and New York, which in aggregate total more than $350 million and have been used to leverage hundreds of millions of additional dollars from commercial lenders, investment funds, foundations and public agencies to support affordable housing development.
MTC will make its initial $5 million contribution to the Bay Area Affordable Transit Oriented Housing Fund once its funding agreement with LIIF is signed. This is expected to happen within the next month. MTC’s second and final $5 million contribution is slated for July 2011.
“Equitable transit-oriented development is one of LIIF’s key strategies to help low-income families lift themselves out of poverty,” said LIIF President and CEO Nancy O. Andrews. “We are thrilled to be working on the Bay Area Affordable Transit Oriented Housing Fund with MTC and all the other fund partners. And we cannot think of a better project for the fund’s first loan than the Eddy & Taylor Family Housing, which will bring much-needed housing and retail to this community.”
“We are honored to celebrate the launch of this fund,” said Dr. Sandra Hernández, M.D., CEO of The San Francisco Foundation, the community foundation of the Bay Area. “This fund will strengthen our entire region by creating more walkable and bikable neighborhoods with work, fresh food markets, and public transportation, close to home. Quality living without cars. The San Francisco Foundation is proud to be a part of the Great Communities Collaborative, and the joint vision to create affordable, healthy communities.”
Lori Chatman, president of the Enterprise Community Loan Fund, another of the participating CDFIs, declared, “Enterprise is thrilled to be a part of this fund because it will place much-needed housing and services near transit. Ultimately, people will have greater access to jobs and enjoy health and environmental benefits, all because they’re able to live on transit lines and in a home they can afford.”
Stephanie Forbes, Executive Director of Bay Area LISC, said, “If the Bay Area is to grow smart, making existing neighborhoods more sustainable means creating a place with more housing choices, more businesses, more fresh produce and services that support the very diverse population of residents, visitors and commuters in ways that complement the existing neighborhood fabric. Bay Area LISC is thrilled to join with MTC and our nonprofit lender colleagues to provide community developers with a flexible tool to support the neighborhood infrastructure in the region’s diverse communities.”
MTC is the transportation planning, funding and coordinating agency for the nine-county San Francisco Bay Area. MTC created the Transportation for Livable Communities program in 1998 to fund small-scale, community and transit-oriented projects that improve neighborhood vitality.
