Investing in Your Community, in Your Neighborhood, in Your Future Collaboration in GA preserves 1,362 Units of Affordable Housing BY THE NUMBERS Total Project Cost: $117 million CAHEC LIHTC Equity Investment: $31.6 million Acquisition & Rehabilitation 37 properties (consolidated from 44) 1,362 total units 781 family / 581 elderly 30 counties across the state Talbot Village is a 48-unit rehabilitated community for families located in Talbotton, GA. As the holidays draw near, thousands of residents living in affordable housing in rural Georgia have something extra special to be grateful for this past year – renovated homes. Nearly 16 months ago, WWJ, LLC, an affiliate of Boyd Management, Inc., and Greystone Affordable Housing Initiatives, LLC, closed a $117 million multifamily transaction that positively impacted more than 30 communities in the state of Georgia by financing the acquisition and rehabilitation of 44 USDA Rural Development (RD) Section 515 properties. Now, as 2014 comes to a close, the rehabilitations are complete and residents are settling into their updated apartments. The importance of this deal is multi-dimensional. Construction of Rural Development units peaked in the late 1970s, but recent budgets have seen little funding for new construction. Now, these developments, which have served their tenants well for 20-40 years, need significant capital repairs. With limited new RD housing, it is essential to preserve the existing supply to ensure they are not removed from the affordable housing inventory, leaving tenants in rural communities with limited rental housing options. This deal accomplishes just that by preserving 1,362 units of affordable housing that serve low-income households across the state. Prior to the renovation, Shady Grove, an 18-unit family development in Ellaville, GA, was in need of substantial capital repairs. The financing structure of this project, which included a $31.6 million investment of Low Income Housing Tax Credit (LIHTC) equity by CAHEC, has proven to be vital to the affordable housing industry by serving as a model for similar projects moving forward. “On the surface, this project provided much-needed repairs and upgrades to an aging portfolio; however, this project’s impact goes much deeper in how it affects the industry itself. The entire nature of this deal was innovative, and the many partnerships that have formed pave the way for similar projects throughout the United States,” said Joe Wilczewski, CFO of Boyd Management, Inc. and Managing Member of WWJ, LLC. The rehabilitation plan, which consisted of substantial improvements to both the interior and exterior of the communities, had a positive economic impact in Georgia as well. A majority of the construction costs were spent directly with Georgia contractors on physical goods and improvements, which brought a great deal of revenue into the state. Additionally, during the 16 months of construction, workers stayed in local hotels, ate at local restaurants, and made other local purchases. With the renovation complete, the residents of Shady Grove have a new sense of pride in their community. This deal has positively impacted numerous people, and the effect this collaboration has had on the residents is palpable. For many, a new sense of pride now inhabits these homes. Phone calls, letters, and e-mails from grateful tenants have poured in, and hearing how important this project was to so many people makes all of the years of planning and teamwork well worth it. The Need for Affordable Housing Is Critical Housing Landscape 2014 from the Center for Housing Policy reports that despite improvements in the economy since the end of the Great Recession, “housing affordability remains a severe challenge for millions of working individuals and families.” The housing crisis of 2008 drove more Americans into the rental market, and now the demand for affordable rental housing exceeds the supply. As discussions regarding tax reform continue, it will be important to remember the LIHTC program’s excellent track record and its essential role in developing and preserving affordable housing. What Is the LIHTC? Created by Congress as part of the Tax Reform Act of 1986, the Low Income Housing Tax Credit (LIHTC) generates private capital investment used to finance the construction and rehabilitation of affordable rental housing for households earning 60% or less of the area median income. According to the Joint Center for Housing Studies at Harvard University, the housing tax credit is "widely regarded as the most successful housing production and preservation program in the nation's history.” Since it was enacted, the LIHTC program has led to the development of more than 2.6 million units of affordable housin g. In addition to providing safe, decent, and affordable housing for working-class families and seniors on limited incomes, the economic impact of the LIHTC program is visible in communities throughout the country. The development of affordable housing increases spending and employment in the local economy. The National Association of Home Builders estimates that for every 100 units constructed with low-income housing tax credits, 116 jobs are created and more than $3.3 million in federal, state, and local revenue is generated. Moreover, affordable housing can affect an employer’s ability to attract and retain employees. LIHTC investment plays a significant role in community revitalization, which in turn can improve economic opportunities for local residents. Who Is CAHEC? One of the nation’s leading nonprofit equity syndicators, CAHEC helps finance the development of attractive and affordable rental housing. Headquartered in Raleigh, N.C., CAHEC works with investors and developers in eleven states and the District of Columbia to raise and invest capital in affordable housing, historic preservation, and mixed-use community revitalization projects. Since its founding in 1992, CAHEC has raised and committed more than $1.55 billion toward the development of more than 22,000 units of affordable housing.
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