“Affordable Housing Comes to U Street with the Funding of Portner Flats”

portner flats rendering

From a press release:

“On July 7th, the District of Columbia Housing Finance Agency (DCHFA) closed on the financing of an affordable housing development in one the District’s most sought after neighborhoods, the U Street Corridor. The Agency issued $27 million in short term DCHFA tax exempt bonds providing a portion of the funding for the acquisition of Portner Place and construction of Portner Flats (1440-1450 V Street, NW) located in Ward 1, one block west of The Frank D. Reeves Municipal Center at 14th and U Streets, NW. Blaylock Beal Van, LLC underwrote and sold the bonds in the publicly offered transaction. In addition to the bond financing, $14.5 million in equity was raised by Boston Financial Investment Management for this development through the syndication of low income housing tax credits allocated by DCHFA. Prudential Mortgage Capital Company underwrote the mortgage and is the permanent lender for the FHA insured transaction. The DC Department of Housing and Community Development (DHCD) also provided $2.4 million in subordinate financing for this project.

“This neighborhood is emblematic of how housing costs in D.C. have risen to levels beyond the range of many low and moderate income residents. This transaction doubles the number of affordable units at this location in the U Street Corridor; seamlessly integrating 96 units of green, amenity rich affordable housing with high end market rate apartments and retail,” stated Todd A. Lee, Acting Executive Director, and DCHFA. “People at all income levels should have the opportunity to live in thriving, transit oriented mixed-use neighborhoods.” Portner Place LLC’s (a partnership comprised of Somerset Development Company and Jonathan Rose Companies) development plan for the property preserves and expands the number of affordable units at the site. The buildings that once held the 46 unit garden style apartment units have been demolished and the tenants who desire to return have been temporarily relocated. The $53.1 million redevelopment will feature a newly constructed eight story building with 96 units. The project will consist of a mix of 23 studios, 25 one bedroom, 36 two bedroom, and 12 three bedroom apartments.

The new building will house individuals and/or families making 60 percent or less of the area median income (AMI). Fifty percent of the units will be subsidized by a HUD Section 8 contract, with approximately 70 percent of those units reserved for the families who were temporarily relocated. Portner Flats will be served by an underground parking garage with 31 reserved spaces for residents. The project will also include interior court yards and playgrounds, a business/computer training center, EnergyStar appliances including in-unit washers and dryers, and a green roof. Just across the courtyard, 288 units of market rate housing will be built making this slice of U Street an example of what can be accomplished when public and private entities think outside of the box in an effort to help solve the affordable housing crisis in the District.

Through its Public Finance division, DCHFA issues tax-exempt mortgage revenue bonds to lower the developers’ costs of acquiring, constructing and rehabilitating rental housing. The Agency offers private for-profit and non-profit developers low cost predevelopment, construction and permanent financing that supports the new construction, acquisition, and rehabilitation of affordable rental housing in the District. ”

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32 Comment

  • Awesome. I was hoping this wouldn’t be another luxury building with very few (if any) affordable units.

  • $43.9 million in bonds, equity and subordinated debt to build 96 affordable housing units? Maybe my math is wrong but that’s an average of $450,000 per unit.

    • Doesn’t that sounds right? “36 two bedroom and 12 three bedroom units” built to regulated standards

    • +1, at the $53MM project cost cited by the article, that’s about $550k per unit, which is what a trophy luxury apartment building in the neighborhood might sell for.

      • +1, came to say the same thing, averaging about $552,000 per unit with over half the units studios and one bedrooms. And further ongoing taxpayer subsidies through Section 8 for half the units. Isn’t there a more efficient way to provide solid, affordable housing?

    • It’s possible (probably likely) that this includes other costs like acquisition, demo and relocation, right?

    • The press release says 96 affordable housing units PLUS 288 market-rate units. I assume the cost numbers are for the whole project.

      • Nope. But still a reasonable cost number.

      • No, the $53 million is for the 96-unit affordable housing building (of which, it seems about $44 million was paid for by the city). The 288-unit market rate building is going in across the courtyard and costs presumably a lot more, but is not paid for by the city.

      • You would be wrong to assume that.

    • Also note — there were apparently people living in subsidized housing at this location before being relocated, and they will be moved back after the project is done:

      “Fifty percent of the units will be subsidized by a HUD Section 8 contract, with approximately 70 percent of those units reserved for the families who were temporarily relocated.”

      So, 35% of the overall affordable housing units are simply replacing affordable housing that was already in the area. The $43.9 million is actually building only about 63 new units, and is replacing another 33 or so that were already there.

  • I wish my tax dollars would be used to maximize the return on investment in one of the District’s most sought after neighborhoods, the U Street Corridor.

    This location is perfect to doing just that, and that money can be stretched further to rebuild other gentrifying neighborhoods such as the Capitol Gateway development on East Capitol, Kenilworth Avenue development, Fort Lincoln, Fort Dupont, etc.

    Money from this project could be used as down payments for residents to become homeowners.

    Moving people back to a newly gentrified area may sound nice, until they are told of new rules (no smoking outside, keep the noise down, no loud talking in the hallways, etc) which leads to complaints from the neighbors who end up paying market rate.

    These new neighbors will, no doubt, end up on the tenant association board, and will write the rules to work in their favor–including a nuisance rule whereby any neighbor who garners a certain number of credible complains can be forced to move, or any neighbor who has the MPD reported to their unit will have 60 days to find a new place.

    • It’s really weird to me that you assume people who need affordable housing won’t be able to following the building rules?

      • The truly overwhelming body empirical evidence.

      • And even if they did have difficulty following rules… the subsidized-housing building and the market-rate building are going to be separate. (Perhaps a bit like the NYC apartment building that was roundly criticized for having a “poor door.”)

        • I recall reading that the relocated of this community were surveyed and they preferred having a separate entrance; and to be grouped together to maintain the sense of community that they had established over the years.

        • According to the WaPo article, the residents of the original subsidized housing wanted to be in a separate building. As opposed to what happened in NYC where the “poor door” was the idea of the developer.

        • Fair enough. Thanks for the backstory, Honest Abe and Anonymous.

    • – I don’t favor using tax dollars to pay for anyone’s down payment to become a homeowner. One of the reasons for the last housing market crash was the faulty assumption that everyone should be a homeowner. Everyone should not be a homeowner. Everyone can’t afford to be a homeowner. It costs more to afford a home that just being able to pay the down payment on the mortgage. Buying a home is just the beginning of the parade of expenses associated with homeownership.
      – I don’t assume that the people who lived in the building that sat on this site before smoked in non-smoking areas, were noisy, or talked “loud” in the hallways. Or at least that they were any more prone to these behaviors than people who live in market rate apartments. I guarantee that the market rate tenants of the adjacent building will have enough complaints about their market rate neighbors to keep themselves busy.
      – I too find it weird to assume that people who need affordable housing can’t be good neighbors.

      • I think you’re under the misimpression that only poor people default on their mortgages or make lousy decisions with their money. Whether you like it or not, your tax dollars subsidize all homebuyers via the massively regressive mortgage tax deduction. For whatever reason, my rent isn’t deemed worthy of a tax deduction, but any interest I pay on debt to purchase my “luxury” condo is free and clear of taxation.

    • The buildings are separate. The market rate building fronts U Street, and that is where their entrance is. The Portner Flats are on V Street, as well as their entrance.

      So no.

  • There was a housing development on this site with 48 Section 8 units. The new project keeps the same number of Section 8 units but adds 48 more “affordable” units. Note that the definition of “affordable” is households with incomes 60 percent below the area median income of $109,200 – or $43,680. So this is not necessarily a “low income” development. Part of the funding for the new affordable building is coming from the sale of the adjacent property facing U Street, which will be the site of (what else) new luxury housing.

    https://www.washingtonpost.com/news/where-we-live/wp/2016/07/11/bucking-bent-toward-the-upscale-developers-to-offer-96-affordable-rentals-in-d-c-s-trendy-14th-street-corridor/?hpid=hp_local-news_wwl-affordable-437pm%3Ahomepage%2Fstory

  • People are so damn negative here.

    The will be 96 more apartments that non-rich people can live in than there were before. This is great.

    • Agreed. The last thing DC needs is one more “luxury” complex with roof-top pool doggy spa, and retail space for the latest overpriced restaurant or gelato chain.

    • The negativity is coming from the realization that if it wasn’t costing over half a million dollars per unit to provide 96 apartments, perhaps we would be about to provide affordable housing for much more than 96 households at the same cost. Wouldn’t that be even better?

      • And that new housing would go where? Anacostia? Definitely somewhere on the other side of the river, right? As opposed to allowing the people who have been living in this neighborhood to continue to live in this neighborhood.
        I don’t hear any of the complainers volunteering to have a Section 8 or even an “affordable” housing development put up in their neighborhoods.

      • But that’s how much it costs to build units like this! Sorry, but if you think people are purposely spending more money than they need to, you’re delusional.

        • The actual construction may cost that much, but I can assure you that U Street corridor land is much, much more expensive that parcels elsewhere. If you have a $55 million budget and units cost 500k/per, you can build many more units if your site acquisition costs are $8 million vs. $24 million.

          • +1 If the site were not in such a “hot” area, but still in an accessible bus and metro area, then we could build more affordable housing units for more families. Wouldn’t that make more sense?

          • “If the site were not in such a “hot” area, but still in an accessible bus and metro area, then we could build more affordable housing units for more families. Wouldn’t that make more sense?”
            —-
            No. The Section 8 buildings that sat on that site predate the mega development that has taken place in the past 10 years or so. The whole point of this is to allow people who lived through the bad years of this community to benefit from its revitalization. Gentrification doesn’t have to mean moving everyone who can’t afford the new luxury condos and rentals to the poorer, less developed parts of town.

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