New Regional Financing Tool for Affordable Housing Preservation
GCC is excited to share that a new regional financing tool for preservation is available! In the last month, Enterprise Community Loan Fund (ECLF) and the Low-Income Investment Fund (LIIF) launched the Bay Area Preservation Pilot (BAPP). BAPP provides financing for the acquisition and preservation of affordable, transit-oriented housing in neighborhoods significantly affected by gentrification. The $49 million fund is made possible by $10 million from the Metropolitan Transportation Commission (MTC) and $39 million from ECLF and LIIF.
The displacement crisis in the Bay Area is severe – over 62% of low-income households are at risk of or are currently experiencing displacement, according to UDP. Preservation is a solution because it ensures existing affordable housing remains affordable. Long-term affordability allows residents to maintain neighborhood ties and continue to thrive, and affords that opportunity to future tenants.
GCC played an instrumental role bringing together diverse public agencies, advocates, and developers to collectively design BAPP. Once a preservation financing plan was place, we organized a successful advocacy campaign in which city leaders and equity advocates asked MTC to provide seed funding to make the design a reality.
Prior to BAPP, GCC conceptualized the Transit-Oriented Affordable Housing Fund (TOAH). TOAH was relaunched in late 2018 to better address the current economic, fiscal and political environment and provide the flexible products and streamlined processes required to accelerate equitable transit-oriented development (TOD). GCC sponsors the $40 million fund, which continues to provide financing for affordable housing, community services, and other neighborhood assets near transit lines. While TOAH supports the acquisition and development of TOD projects, BAPP is uniquely focused on preservation.
BAPP provides up to 10-year term loans for a maximum of $7 million each to nonprofit developers and joint venture partnerships. The fund gives these mission-driven developers, who might otherwise not have access to valuable properties near transit, an opportunity to compete for market rate housing with affordable rents. The funds must be leveraged five to one and deployed in Transit Priority Areas and Priority Development Areas.
This financing model will help developers acquire properties quickly and cover acquisition and other costs while also ensuring rent remains affordable for communities most at risk of displacement. Once a property is purchased using a BAPP loan, developers will have up to 10 years to ensure residents maintain their housing and to devise a financial plan to ensure long-term affordability of the property. This can be done by securing Low-income Housing Tax Credits (LIHTC) and other state and federal affordable housing financing.
LIIF and ECLF hope that BAPP will highlight the power of public sector investments in transforming housing opportunities for the Bay Area’s most housing-vulnerable residents. They estimate between 200 and 400 homes will be removed from the market and be positioned to maintain permanent affordability. If the pilot is successful BAPP can be scaled for even greater impact.
Check out ECLFs website for more information.