A dozen housing-related nonprofits have joined forces to create a private real-estate investment trust that will acquire apartment buildings across the country and redevelop the properties as affordable housing units, the reports.
The Housing Partnership Equity Trust, which includes Denver-based , in Long Beach, and Las Vegas-based , is the country's first REIT to be owned and operated by nonprofits and the second to focus on affordable housing. To date, it has raised more than $100 million from private-sector investors, including Citi, Morgan Stanley, Prudential Financial, and the and foundations.
Ever since the subprime housing bubble burst in 2007, millions of Americans have been forced out of their homes and into apartments, driving vacancy rates lower. The greater demand for rental housing, in turn, has attracted the attention of developers, but much of what they have built is priced for higher-income buyers. To address the problem and help preserve affordable rental housing across the country, Housing Partnership aims to raise $500 million from institutional investors and will use the funds to acquire and redevelop existing multifamily properties as affordable rental units, taking a small stake in the buildings they purchase and operate.
Cindy Holler, president of Mercy Housing Lakefront in the Chicago area, said the organization plans to acquire properties near job centers, particularly healthcare hubs. "We're looking around hospital systems, which are big job creators," she said. "We want to make sure that the hospital systems have their work force affordably housed."