Getting affordable housing units online for low-income residents is difficult — and the process behind construction has undergone change since the late 1990s.
The Santa Fe Civic Housing Authority — an independent nonprofit that works to ensure rental units remain affordable in the city — has sought out limited partners for projects in the push to get units online. In these cases, the authority serves as the “general partner” and has less than a 1% ownership stake in many properties in its portfolio.
The quasi-governmental organization has an annual budget of around $15 million, Executive Director Ed Romero said, with about $10 million in grants and the other $5 million from a combination of federal contracts and tenants’ rent payments.
Among the properties in the housing authority’s portfolio are Española Public Housing, which spans 178 units; Villa Hermosa, a 116-unit public housing community in the St. Francis Drive corridor; and Phase 2 of the Tierra Contenta project, which has 80 units. In the town of Bernallillo, it also controls the 96-unit Village in the Bosque.
Romero noted the authority has fewer units on the east side of Santa Fe, a historic area with more stringent restrictions for construction. The nonprofit’s affordable housing projects in Santa Fe have land-use restrictive agreements, or LURAs, guaranteeing they receive a specific number of Low-Income Housing Tax Credits from the federal government over a specific time period.
The model is one in which housing authorities have converted public housing stock to project-based rentals, leveraging federal government programs that allow them to convert public units to Housing Choice aid vouchers to ensure affordability for low-income residents. The investor in these projects assumes the role of limited partner and receives tax credits in return.
“The way the tax credit project works is you have a deal in which you bring on an equity investor,” Romero said. “The equity investor gets credits, plus they get 99% of the income and losses of a property for the next 15 to 30 years, depending on how long they want to stay in the project.
“But what they bring to it is 70% of the capital that is required to remodel the apartments,” he said, “and it’s a structure that HUD turned to back in ’97, ’98 when they stopped funding the construction of affordable housing.”
