Columbus, OH. Thursday May 18, 2017. – The Maryland Department of Housing and Community Development (MD DHCD) awarded the Housing Commission of Anne Arundel County (HCAAC) an annual 9% tax credit reservation of $1.5 million, plus $2 million in soft debt financing, to complete the rehabilitation, and addition of new construction units, for Meade Village. We understand HCAAC is the first housing authority in the state of Maryland to receive a 9% award without a co-developer.
To support the completion of this project, National Affordable Housing Trust (NAHT), in partnership with the Housing Alliance Group, HAI Group’s Capital Solution, was awarded a development advisory and project management contract by HCAAC in the Spring of 2016.
Jim Bowman, CEO and President at NAHT had this to say about the new project, “Securing a 9% award for the Housing Commission of Anne Arundel County is a tremendous achievement for NAHT’s Development Advisory Services division.” He continued, “This award demonstrates the high level competency that our Development Advisory Services (DAS) team possesses, as well as, the innovative and forward-thinking nature of NAHT as a whole.”
Originally built in 1971, Meade Village is located in Severn, MD and currently has 200 rental units. Upon the completion of the rehabilitation and construction of additional space of Meade Village, the community will offer 231 affordable rental homes, including a manager unit. Additionally, the property will continue to offer residents and the surrounding neighborhood access to Head Start, and Boys and Girls Club programs.
HCAAC’s receipt of the 9% tax credit award for Meade Village is a key step as Meade Village converts from Public Housing under the HUD Rental Assistance Demonstration (RAD) program. RAD has already injected much-needed private funding, through vehicles such as the Low Income Housing Tax Credit (LIHTC), to restore public housing properties that are aging. The RAD program permits the use of private sector financial tools to attract investors. Public-private partnerships, like the partnership between HCAAC, Housing Alliance Group and NAHT, not only provide new capital; but also introduce private sector expertise into the long-term operation and stewardship of these properties.
“I believe this is a precedent setting. Apparently, this is the first 9% award MD DHCD has made to a RAD project with the Public Housing Authority (PHA) acting as the sole developer” stated Dave Lennon, Director of Development Advisory Services at NAHT. He continued, “HCAAC has a compelling vision and commitment to transform Meade Village. We’re honored to be a part of this landmark project, and hopeful that HCAAC’s success will encourage other Housing Authorities to consider this strategy for the conversion and preservation of its public housing units.”
Brian Robinson, Director of Capital Solutions at HAI Group stated, “Creating communities of opportunity and affordability is a priority for all of HAI Group’s Solutions, particularly Housing Alliance Group. We are excited to support HCAAC’s commitment to preserve and protect affordable housing in Anne Arundel County, Maryland.”
With the help of Housing Alliance Group and NAHT, HCAAC put a competitive package together that persuaded MD DHCD to overcome common concerns of PHAs being the sole owner and developer of these types of properties. Meade Village will have more financial stability and can remain affordable to low-income residents with the support of the LIHTC equity implemented through RAD.
In November 2016, Econometrica, Inc. published an Interim Report of the Evaluation of the First Component of HUD’s Rental Assistance Demonstration, based on analysis of data available as of October 2015. As of that date, RAD had enabled PHAs to complete the conversion of 19,255 units in 185 public housing developments, raising $2.5 billion in funding to meet capital needs, with a leverage ratio of $8.90 to $1.00.
While they may not generate big headlines, programs like these are evidence that smart public-private collaborations can make government work in a responsible cost-effective manner.
Meade Village is scheduled to be completed with its rehabilitation in 2019.
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Lauren B. Williams