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News from NHC's family of members |
NHC member Housing
Partnership Network (HPN) was recently featured in an NPR story on HPN’s
formation of the first-ever nonprofit real estate investment trust (REIT). The REIT allows investors to pool their funds
to buy property and collect dividends without
any public financing.
Investors are offered modest five to seven percent returns on
their investment and HPN has favored investors’ desire to preserve affordable
housing. So far the REIT has snagged several large-scale investors, including Prudential, Citibank and the John D. and
Catherine T. MacArthur Foundation
to invest $100 million.
HPN and its coalition of nonprofit members hopes that the
REIT will assist in preserving housing units that cater to low and
moderate-income families. The REIT will help HPN to improve the conditions of
moderately-priced apartments that might otherwise be purchased by high-power
developers who would increase rent and force existing tenants out.
“What we're trying to do is keep rents affordable, but also
really invest in the property, really invest in the community and really invest
in the residents," said Drew Ades,
president of Housing Partnership Equity
Trust, HPN’s social-purpose REIT.
Often,
properties are built with rents that cater to low to moderate-income families,
but these lower rental costs are not high enough to fund building upkeep. This
is an issue that many communities with affordable rental housing options are
trying to handle. HPN’s REIT addresses the operating costs associated with
running these affordable housing developments. Our Lifecycle Underwriting Cost Modeling Tool was created to help
developers deal with funding issues using up-front financing for developments.
The tool helps to assess whether or not a property is able to fund its
long-term capital needs.
HPN has purchased properties in California, Illinois and
Virginia. They are in active search of other potential apartment complexes and
are hoping to raise an additional $250 million in investment funds.
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