$58 Million Housing Impact Fund Acquires First Property, Preserving 144 Affordable Apartments for Next 20 Years
Also partners with city and county to create new subsidy providing rental assistance for the most needy in our community
CHARLOTTE, N.C. (Dec. 17, 2020) – The Housing Impact Fund, in partnership with Ascent Housing, today announced its purchase of Lake Mist Apartments, a 144-unit property off Archdale Drive and Old Pineville Road in south Charlotte. In keeping with the Fund’s mission to preserve affordable housing in our community, the property will carry a 20-year deed restriction that ensures the apartments will be accessible to the most vulnerable in our society.
Under the deed restriction, all apartments will be reserved for households earning 80% or less of the Charlotte Area Median Income, or AMI: 30% of the units will go to residents earning 30% AMI or below; 5% will be held for those at 50% AMI or less; 45% for those at or below 60% AMI; and the remaining 20% of the units will go to those at or below 80% AMI.
In addition, the Fund has partnered with local housing assistance program Socialserve, along with Mecklenburg County and the City of Charlotte, to introduce a new rental subsidy. Financed by taxes to be collected on the property, the program will support the 30% and under AMI residents – those earning less than roughly $20,000 annually – who currently have no form of rental assistance.
The Fund, which was created last month thanks to $58 million invested by a number of socially minded individuals and corporations, strives to address housing insecurity while facilitating economic opportunity and upward mobility in Charlotte. This first acquisition is part of the Fund’s plan to convert an estimated 1,500 apartments into affordable housing utilizing a strategy called Naturally Occurring Affordable Housing (NOAH) preservation through the purchase and rehabilitation of existing apartment communities in neighborhoods with access to jobs, transit, healthcare, educational and retail services.
“This highly desirable area of south Charlotte, with easy access to the light rail, shopping, restaurants and other services, has seen the purchase of several other apartment complexes by private equity firms in recent years,” said Nelson Schwab III, who along with fellow Carousel Capital founding partner Erskine Bowles serves as a Managing Member of the Housing Impact Fund. “As a result, rents in this submarket have increased 34% the past five years. Our purchase, and the deed restriction, will help ensure that moderate-income residents can continue calling this neighborhood home for the next 20 years.”
None of the existing residents will be displaced from the 13-acre, 35-year-old property as a result of the sale. The Fund plans to invest nearly $2 million in upgrades to the community, with the work being led by minority-owned contractor R.J. Leeper Construction. S.L. Nusbaum Realty, a 114-year-old firm that manages more than 25,000 apartment homes spanning the East Coast, will handle property management duties.
With the average rent in Charlotte rising more than 40% during the last decade – significantly outpacing wage growth – many households have been forced to move as a result of an eviction, foreclosure, rent increase or other financial challenge. Affordable housing can stem that tide, and NOAH preservation is particularly effective because it repurposes existing housing inventory at a lower cost and shorter timeframe than new construction.
In fact, a number of local real estate firms are supporting this mission by investing nearly $3 million combined in the Housing Impact Fund: Beacon Partners, Collett, Crescent Communities, Marsh Properties, MPV Properties, Northwood Ravin, Pappas Properties, Proffitt Dixon Partners and SunCap Property Group.
“NOAH projects like the Housing Impact Fund’s purchase of Lake Mist Apartments fill a critical void in Charlotte’s complex housing landscape,” said Todd Mansfield, chairman and CEO of Crescent Communities. “As our population grows and more development occurs, Crescent and eight other local real estate firms are proud to invest in the Housing Impact Fund’s efforts to safeguard affordable housing in close-in neighborhoods so that our community’s prosperity can be shared by all.”
Charlotte-based Truist Financial is the Housing Impact Fund’s lead investor, committing $15 million to be used as equity in purchasing identified apartment communities. Other corporate contributors include Atrium Health, LendingTree and Movement Mortgage. The Fund also benefits from a $20 million carveout from the Charlotte Housing Opportunity Investment Fund (CHOIF), a private-sector housing investment fund launched by the Foundation For The Carolinas and managed by Local Initiatives Support Corporation (LISC), a national nonprofit with a local office focused on building economic opportunity and investing in communities of opportunity in Charlotte.
“Affordable housing is the key to opening the doors to economic opportunity,” said Ralphine Caldwell, executive director of LISC Charlotte. “With nearly four out of five Charlotte households earning below $50,000 experiencing housing insecurity, we are excited to be invested alongside key partners that enable opportunities to remove this roadblock to upward mobility.”
In addition to other property acquisitions, Schwab says the Housing Impact Fund’s 2021 plans include the launch of its supportive service platform, which will assist residents in the areas of workforce development, college and career readiness, financial literacy, health and wellness, and education.
For more information on the Housing Impact Fund visit www.ascentrealestatecapital.com/ascent-housing.
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Barry Finkelstein Mark Ethridge
LGA on behalf of HIF Ascent Housing