Article by Hank Long in Finance & Commerce.
Last July when CommonBond Communities paid $16.3 million for the 112-unit Boulder Ridge apartments in Apple Valley, it marked the nonprofit housing provider’s entry into the market-rate multifamily category.
The St. Paul-based organization — which owns and operates more than 100 properties offering affordable housing in Minnesota, Wisconsin and Iowa — purchased the 15-year-old market-rate complex without government subsidies, but intended to keep any potential rent increases below the growth rate of the overall market.
The acquisition — partly funded by social impact investors — represents a new effort being made to help curb the rate of rising rents in “naturally occurring” affordable housing across the Twin Cities.
This summer CommonBond is set to close on at least two more market-rate complexes that will total about 170 units, said CEO Deidre Schmidt.
“We consider these upcoming acquisitions as offering deeper affordability than the Boulder Ridge deal,” Schmidt said in an interview Tuesday. “That means the rents will be affordable for those at 50 or 60 percent of area median income, but we will be able to do it without the government subsidy.” Schmidt said she wasn’t able to name the properties before the deals close.
Those pending acquisitions come at a time when nonprofit housing providers, government entities and some private sector social impact investors are working together to shore up a shrinking pool of “naturally occurring” affordable housing across the Twin Cities.
In the coming weeks the Greater Minnesota Housing Fund will launch its $25 million NOAH (Naturally Occurring Affordable Housing) Impact Fund. Both for-profit and nonprofit housing providers will be eligible for NOAH Impact Fund assistance in acquiring multifamily complexes across the seven-county metro area. The program is expected to preserve 1,000 naturally occurring affordable units in the metro area during the next 2½ years, said Warren Hanson, president and CEO of Greater Minnesota Housing.