Real Homes for the Homeless

Industry Insights

A sea change may be coming in the way the homeless are being housed.

While there’s still a need, especially in cold weather, for the traditional shelter with cots and curfews, a new emphasis on permanent, supportive housing is taking this kind of living option away from the shelter model into the realm of for-profit real estate development.

Hunt Capital Partners is on the leading edge. The Los Angeles-based syndication unit of the Hunt Companies is a big capital markets player. It has raised more than $1.5 billion in Low Income Housing Tax Credit equity for affordable housing projects, some of which target permanent solutions for the homeless.

HCP recently announced the closing of $4.2 million in LIHTC equity for the construction of Rhododendron Place in Vancouver, Washington. The project will consist of newly built studio apartments, with 23 of them set aside for homeless people. Half of the total will go to very low-income residents, with incomes up to 30 percent of area median incomes; the other half, to low-income renters with incomes up to 50 percent AMI.

While the overall homeless population has declined since 2010, new research puts the current total at 661,000 nationwide. That’s 100,000 higher than the official number from the Department of Housing and Urban Development.

Projects like the one in Vancouver are designed for the special needs of homeless people. For example, they rarely have much in the way of furniture, so the units will come with some basic furnishings -- a single bed frame, mattress, side table, desk and chair. Supportive services will also be offered through Columbia Mental Health Services.

“These include child and family services, youth services, mentoring, drug and alcohol treatment, employment services, medical, supported housing and treatment programs, to name a few,” according to Dana Mayo, Hunt Capital executive managing director.

Mayo says: “Our investment in this development will provide affordable housing for the homeless and equip them with resources to help break the cycle of poverty.”

The total development cost for the project is $7.78 million. Hunt Capital Partners “syndicated” the complicated tax credit deal, meaning it found investors who could use a tax break to get one by investing in low-income housing. Investors can either be a single entity or a consortium of investors. In this case, it was a multi-investor fund.

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