Affordable Housing Finds Green Dollars

When Blue Sea Development completed the South Bronx’s 64-unit Morrisania Homes community in August 2007, it marked the first affordable housing development in New York state to receive the LEED for Homes designation. Financed by the New York State Affordable Housing Corp., the project, which features two- and three-family homes, met U.S. Green Building Council standards for water efficiency, sustainable site planning, energy materials and resources, and indoor environmental quality and design process. Morrisania Homes’ achievement represents the push to develop housing that is affordable yet environmentally sustainable.    Also taking part in the movement is Capitol Hill Housing, which utilized low-income-housing tax-credit funding from Enterprise Community Partners Inc.’s Green Communities initiative to develop Broadway Crossing, a 44-unit green affordable housing project in Seattle. The city in 2002 enacted SeaGreen, a program that mandated that a project meet certain sustainability guidelines to receive city funds. Enterprise Community has modeled its guidelines on that program and on LEED, from which Broadway Crossing is also attempting to gain silver certification. “Since we were headed in that direction anyway and were using Enterprise as an equity source, it made sense (to apply for LEED certification),” said Betsy Hunter, director of real estate development for Capitol Hill Housing. Washington state’s Evergreen Sustainable Development Standard Criteria has replaced SeaGreen in an indication of the growth of green affordable housing programs.    Indeed, in today’s uncertain credit markets, a green project may even give a developer a leg up on the competition for funding, especially in the affordable housing sector, which relies heavily on outside financing for development, an especially important part of the equation. “There is a good amount of interest in green projects by investors, so green might be an advantage when finding funding sources,” said Dana Bourland, senior director of Enterprise Community’s green communities initiative. “Green projects are seen as lower risk because of the savings (from efficiency),” she explained. “Long-term managed green developments tend to have more secure operating costs.”    Bruce Mast, development director for Build It Now, a non-profit organization that promotes sustainable development, agreed, noting that a slowdown in investment in affordable housing rental projects has not followed the credit-crunch-induced decline in for-sale properties.    One developer recently secured financing for a major green affordable project. In mid-March, non-profit developer Coachella Valley Housing Coalition broke ground on a $90 million green affordable housing development in La Quinta, Calif. Dubbed Wolff Waters Place, the project was funded by a combination of $30 million in financing from the city’s redevelopment agency and $43 million from Citi Community Capital and Wells Fargo Community Development Corp.For more on green affordable housing, see Sector Scene in the June 2008 issue of CPN or search this site for key words “Aim to Sustain” in quotation marks.