"CDT's investment—our first in Colorado—is part of our larger commitment to ensuring long-term access to quality, safe and affordable housing throughout the country," said Brian Dowling, Senior Vice President of Community Investments at CDT. "Our joint venture with Volunteers of America also serves as a model of how a national institutional investor can partner with a large nonprofit organization to help address the nation's critical shortage of affordable housing."
All of the units in Summit Apartments will remain preserved for families and individuals earning between 50 and 80 percent of the area median income (AMI).
Constructed in 1986, the property was purchased by Volunteers of America in 1993 from the Resolution Trust Corporation using financing provided by Colorado Housing and Finance Authority.
The Colorado Springs Housing Authority was integral to the success of the latest Summit Apartments transaction, having facilitated a tax exemption to the CDT-VOA partnership that expanded and extended the level of affordability at the property. Through partnering with the CSHA, CDT and Volunteers of America were able to increase the level of affordability so that 85 percent of the units serve families at or below 50 percent AMI and 15 percent of the units serve those at or below 80 percent AMI.
"As there is a shortage of affordable housing in our community, the preservation of existing affordable units is critical to our goal of providing quality housing for low-moderate income families," said Chad Wright, Executive Director of the CSHA. "The ability to create strategic partnerships in the pursuit of this goal is essential. This collaboration exemplifies that approach and will benefit families in Colorado Springs for many years."
Civic leaders have identified the lack of affordable housing that accommodates low- to moderate-income residents as a high priority in Colorado Springs and across El Paso County. An October 2014 Affordable Housing Needs Assessment commissioned by the city and county governments shows that:
- About half of renters and a third of homeowners with mortgages in El Paso County are cost burdened, meaning they spend over 30 percent of their income on housing.
- When comparing the distribution of household incomes to the distribution of housing units priced at levels these households can afford, El Paso County has an estimated gap of 24,513 affordably priced units.
Given the high cost of land in Colorado Springs, increasing construction costs, including extension of new public infrastructure and public opposition to new affordable multifamily housing properties, the report recommended that city and county officials "seriously" consider the acquisition, rehabilitation and preservation of its existing affordable housing stock by teaming with a nonprofit developer or entering a limited partnership.
The Summit Apartments transaction with the triumvirate of CDT, Volunteers of America and the Colorado Springs Housing Authority is a strong example of a for-profit, a nonprofit and a public entity working together for the common goal of preserving affordable housing in the community.
CDT invested approximately $2 million into the partnership. CDT and Volunteers of America closed on an acquisition bridge loan funded by CDT in June and then closed on permanent financing in July. The permanent financing provides attractive long-term financing from Freddie Mac through Wells Fargo, National Association.
"We are proud to partner with CDT and the Colorado Springs Housing Authority to preserve and improve the affordable housing opportunities provided at Summit Apartments," said Robert Gibson, Executive Vice President and Chief of Staff for Volunteers of America. "By providing families with the space they need and services that help parents and their children thrive, we help families build communities."
The Community Development Trust (CDT) is a national investor in affordable housing. Working with local, regional and national partners, CDT makes long-term equity investments and originates and acquires long-term mortgages. In its 15 years, CDT has invested over $1 billion in debt and equity capital to properties in 43 states and regions—helping to preserve and create over 35,000 units of affordable housing. CDT is a private real estate investment trust (REIT), a certified Community Development Financial Institution (CDFI), an approved Fannie Mae affordable housing lender and a member of the Federal Home Loan Bank of New York (FHLBNY). As a CDFI and private REIT with a social impact mission, CDT operates as a double-bottom-line organization by utilizing creative financial solutions to provide debt and equity capital to underserved real estate markets, all while seeking attractive returns for shareholders.
About Volunteers of America
Volunteers of America is a national, nonprofit, faith-based organization dedicated to helping those in need live healthy, safe and productive lives. Since 1896, the organization has supported and empowered America's most vulnerable groups, including veterans, seniors, people with disabilities, at-risk youth, men and women returning from prison, homeless individuals and families, those recovering from addictions and many others. Through hundreds of human service programs, including housing and health care, Volunteers of America helps almost 2 million people in more than 400 communities. Its work touches the mind, body, heart and ultimately the spirit of those served, integrating deep compassion with highly effective programs and services.
Volunteers of America has grown into one of the largest and most effective nonprofit housing organizations in the nation. Affordable Housing Finance magazine ranked Volunteers of America as the largest nonprofit affordable housing owner in the country in 2015 in terms of total units owned. Its network of affordable housing now includes 484 properties in 40 states and Puerto Rico, housing more than 25,000 people annually. Its nationwide portfolio of 19,426 affordable housing units includes large urban complexes, small rural developments, elderly housing, multifamily housing and housing for those with disabilities. Additionally, Volunteers of America is one of the largest nonprofit providers of affordable senior housing in the United States and a leading nonprofit provider of skilled nursing care and assisted living for seniors. This comprehensive continuum of housing services responds to the varied needs of individuals and families—from sheltering those without homes to assisting first-time homebuyers. Providing a safe, stable place for seniors, families and those with special needs to live allows Volunteers of America to also offer supportive services in settings where clients and residents feel safe and cared for. The organization is also a proud member of the Partnership for Sustainable Communities, a national nonprofit group dedicated to helping make communities more environmentally, economically and socially sustainable through community planning and development.
Contact: Mike Nowlin
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SOURCE Community Development Trust