As federal subsidies for affordable housing have declined, cities and developers across the nation are being forced to find innovative financing methods to create mixed-income communities. In one prime example, Bethesda, Md.-based developer EYA, teamed up with the City of Alexandria, Va. and the Alexandria Redevelopment and Housing Authority (ARHA) to create a successful public-private partnership for a redevelopment financed exclusively by market-rate land value and Low Income Housing Tax Credits.
Creative Financing
In the late 1980s ARHA acquired the 152-unit Glebe Park apartments using HUD-insured financing. By 2006, Glebe Park was more than fifty years old and had been plagued by a series of floods and physical problems that left more than 100 of the units uninhabitable. Faced with an uninhabitable stock of affordable housing units burdened by a mortgage, ARHA selected EYA to form a public-private partnership to redevelop the property. The mortgaged property became phase 1 of a six-phase one-for-one replacement effort in which ARHA offset the cost of redeveloping Glebe Park by also redeveloping James Bland, a more valuable piece of land perfectly situated between Braddock Metro station and the Potomac River. The James Bland property provided the necessary land value to offset about $10 million in losses that EYA incurred to rebuild the 194 ARHA units at Glebe Park and pay off the community’s mortgage debt.
Today, James Bland is known as Old Town Commons, a five-city-block vibrant new neighborhood in the heart of Old Town Alexandria, Va. The community includes 155 market-rate townhomes selling for up to $1 million and 76 condominiums more moderately priced from $350,000-$550,000. One-third of the housing at Old Town Commons is public housing serving low-income families–a ratio that in EYA’s experience was acceptable to buyers of market-rate homes.
Stacking Up Success
Old Town Commons is located in a historic district, and it was imperative that the new development be seamlessly woven into the architectural and contextual fabric of the community. So instead of building large public housing buildings, EYA built stacked apartments among its market-rate historic townhome designs, making them indistinguishable from the market-rate homes. The affordable homes blend beautifully with the historic rowhome community and increase density without increasing the perception of density.
The More We Get Together
From concept to the building permit phase, EYA, city staff and ARHA met with local civic associations and resident groups to ensure the proposed plan was consistent with the Alexandria’s master plan and to address resident and neighborhood concerns. These meetings built public consensus about density, height, open space, parking, historic context and the like.
In order to create a viable mixed-income community with attractive market-rate housing, the total number of housing units on the site was doubled and sixty of the existing affordable housing units were relocated. The new development, consisting of three- to four-story townhomes and four- to five-story multifamily buildings replaced what had been a development of two-story barracks-style buildings. The team worked to build public support for a new Small Area Plan that provided the necessary zoning flexibility to allow these increases in height and density. As a part of the process, they used image boards and photography to demonstrate how the height and density would feel at street level, making the scale of the project easier to comprehend.
The Payoff
Old Town Commons covers five city blocks, and EYA began construction of one or two blocks each year beginning in 2010. Sales of the market-rate homes have been more brisk than anticipated and sales prices have increased 20 percent since the project opened.
Today, these LEED-certified homes are combined with public parks and courtyards to provide a pedestrian-friendly, transit-oriented community with an improved quality of life for all its residents. Old Town Commons provides a global model for public-private partnerships in which public agencies can harness real estate land values for redevelopment efforts.
By Brian (AJ) Jackson, Senior Vice President of Land Acquisition and Development & Partner, EYA
