This article was sponsored by Nuveen Real Estate, and appeared in the A-Z of Responsible Investing special section in the November 2019 edition of PERE magazine.
Housing insecurity is pervasive in the US, with nearly 19 million low-income families living their lives homeless or paying at least half of their monthly income on housing. For such families, having a safe, healthy, affordable home represents much more than just shelter; it is the foundation for access to jobs, good schools, public transit, healthcare and other essential elements of a successful life.
Yet, there is a shortage of 7.2 million affordable and available rental homes for extremely low-income renter households, according to an April 2019 report from the National Low Income Housing Coalition, which found that no US state has a sufficient supply of such housing options.
Enterprise Homes, a non-profit affordable housing developer, is part of the Enterprise Community Partners family of companies. It combines community planning, financing, construction management, and marketing experience to create and preserve high-quality affordable, mixed-income and market-rate housing. Over 30 years, the non-profit has developed more than 6,500 homes throughout the mid-Atlantic region.
In pursuing its mission, Enterprise Homes acts as a balanced and responsible investor, drawing on relationships with public and private financing entities. It takes its fiduciary responsibility seriously, from risk evaluation to the returns – both financial and social impact – to investors.
In 2016, Nuveen formed a joint venture with Enterprise Homes to purchase and preserve the affordability of a 4,000-plus unit housing portfolio in America’s mid-Atlantic region. Built and renovated under the Low Income Housing Tax Credit (LIHTC) program, the properties include 27 senior housing communities in Maryland and eight family properties across Pennsylvania and Virginia. The properties’ 4,300-plus low-income tenants earn less than 50-60 percent of their area’s median income and pay no more than 30 percent of their income on rent. All properties offer social services and many have received quality and energy efficiency upgrades based on the Enterprise Green Community Standards, which promote the health and wellbeing of affordable housing tenants.
Nuveen contributed $50 million to fund the joint venture with Enterprise Homes, sustaining a relationship that stretches back to 1994, when TIAA invested in an Enterprise-created LITHC fund. The new JV represents a rare opportunity for scale in high-quality affordable assets, including a high concentration of senior properties.
Through this partnership, significant affordability benefits have been achieved:
- 3,473 deeply affordable units preserved
- 4,308 tenants housed, all of whom are underserved
- 30 percent or less of tenant income spent on rent
- 22-year extension of affordability restrictions.