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NALHFA Member Spotlight: Housing Opportunities Commission of Montgomery County

Posted By Administration, Thursday, July 11, 2019
Updated: Thursday, July 11, 2019

During its 2019 Annual Conference, NALHFA presented the Housing Opportunities Commission of Montgomery County with the Multifamily Excellence award in recognition of The Lindley.

 

In Montgomery County and across the nation, rents continue to outpace wage growth, particularly for the lowest-income workers. Nowhere in the country can a family afford to rent a modest, two-bedroom apartment on the minimum wage. In Montgomery County alone, the median household income is $103,178 while the average annual income for HOC customers receiving housing subsidies – most of whom work or are seniors or persons with disabilities – is $18,600. Furthermore, as government resources for affordable housing development disappear, both subsidized and naturally-occurring affordable housing options have become increasingly scarce. As a result, many low- and moderate-income households are forced to seek housing options in far-flung parts of the county without suitable public transit options or connections to high-performing schools.


In response, HOC looked for more sustainable alternatives to fund affordable housing development through an innovative financing strategy for The Lindley in Chevy Chase, Maryland. With The Lindley, HOC became the first Public Housing Authority in the country to include private foundation capital as a source of equity while also maintaining principal control and ownership of the property. Furthermore, the development of the Purple Line light rail connecting Montgomery and Prince George’s Counties presented an opportunity to increase affordable units near a future transit hub, connecting residents to community resources, high-performing schools and employment opportunities.


Maintaining a shared dedication to increasing affordable housing, HOC partnered with Bethesda-based residential developer EYA to increase density at the property. Selling a portion of the original site to EYA and consolidating the low-rise garden apartments into a 200-unit high-rise building allowed HOC to leverage the value of the land in highly desirable Chevy Chase, Maryland. Furthermore, HOC embarked upon a partnership with the Morris and Gwendolyn Cafritz Foundation to include private equity as a source of development funds. The Lindley is the first mixed-income affordable housing property in the nation to use private foundation funding as a source of equity.


While partnerships are pivotal to the sustainability of affordable housing finance and development, HOC maintains as a guiding principle that ownership by Public Housing Authorities or other mission-driven, nonprofit developers is key to ensuring affordability for the long-term. To ensure the retention of affordable units, it was critical for HOC to maintain ownership of The Lindley. These unconventional and crucial public-private partnerships helped ensure successful execution and delivery of The Lindley to the Chevy Chase community.

 

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