Aeon has acquired 10 properties to preserve the affordability of 768 apartments in the Twin Cities region.
The $77 million transaction marks the largest acquisition in the 31-year history of the nonprofit developer, owner, and manager of affordable homes. The purchase also represents the first project funded by Greater Minnesota Housing Fund’s (GMHF’s) recently formed NOAH Impact Fund, a $25 million equity fund established to preserve NOAH (naturally occurring affordable housing) properties in the state. The fund provided nearly $8 million to the recent deal.
Enterprise Community Investment also worked with BMO Harris Bank to provide a combined $12.65 million in private equity.
Other key partners in the project include Bellwether Enterprise Real Estate Capital, Bloomington Housing and Redevelopment Authority, and the St. Paul Housing and Redevelopment Authority.
Affordable housing organizations have looked to preserving NOAH properties as a way to stem the tide of rising rents.
Since 2000, the number of Minnesotans considered cost-burdened by housing—paying more than 30% of their income for housing—has increased 69%. Nationally, nearly one-third of all households are cost-burdened. This situation forces lower- and middle-income residents to choose between rent or groceries, medical bills, and child-care expenses, according to Aeon.
“That’s why Aeon was determined to keep these properties affordable,” says Alan Arthur, Aeon president and CEO. “This purchase with GMHF, Enterprise, and our other partners is a model for how communities can work together to preserve affordable homes. Saving our existing stock of affordable homes is as important—if not more urgent—than developing new ones.”
The properties are in Bloomington, Brooklyn Center, New Hope, and St. Paul and were purchased from the same owner, Hillaway Investments.
All of the acquired apartments are NOAH properties and did not have restrictions on them prior to the sale. However, AEON plans to place rent and income restrictions at 60% of the area median income on the homes to ensure their long-term affordability.
“This project was an incredible effort with Aeon demonstrating the courage and leadership to step up and take it on,” says Rachel Robinson, NOAH Impact Fund manager. “We are proud to be a part of the preservation of one of the largest portfolios of unsubsidized affordable housing in the Twin Cities with our new NOAH Impact Fund resources, thanks to our partners in the banking, agency, and foundation community.”
Steven Scott Management, a Twin Cities–based property management firm, will manage the properties.