Funding - Affordable housing development involves piecing together many different funding sources. IHI applied to the Portland Housing Bureau for $975,000 in January 2011 and was awarded funding in February 2011. This first commitment of funds is critical, not only to get the ball rolling but also to show local support for the project. With the City on board, IHI was able to apply for additional funds from the State. We submitted this funding application to Oregon's Housing and Community Services Department in April 2011, requesting an allocation of federal Low Income Housing Tax Credits (LIHTCs) along with several other state grant sources. On July 22, 2011 the State awarded IHI nearly $8 Million in grants and tax credits to fully fund the project! Once we had tax credits, IHI needed to select a tax credit investor to acquire our tax credits and become IHI's equity partner in the deal. We issued a Request for Proposals to investors interested in the deal and ultimately selected Raymond James Tax Credit Fund as our investor partner. They invested over $8 Million of equity in the project and will own 99% of the property during the LIHTC 15-year compliance period.
Design - IHI worked with Carleton Hart Architectureto design a beautiful new building that will blend into the neighborhood and also energize a vacant stretch of streetscape on Martin Luther King Jr. Boulevard. During the design process IHI's housing development, asset management, and resident services staff work closely with our architects and contractors to solidify our programming goals, building design, and discuss building systems. IHI is working with an environmental consultant to help us maximize our green impact and achieve LEED certification. IHI also works closely with neighborhood associations and local neighbors to solicit their input about design, commercial tenants, and community needs. For example, we increased the amount of glass storefront in the commercial space in response to requests from neighbors for more visibility, accessibility, and the desire for a more "active" street front.
Construction - IHI involves its contractors early in the development process to tell us how much it will cost to build what is being designed, and also to suggest design changes that will result in a better structure and save money. Our general contractors for this project were Walsh Construction Co. and Faison Construction. They worked with IHI and our architects throughout the design process to ensure that The Magnolia got the biggest bang for our buck. We used an energy efficient "super skin" with a brick façade that will contribute to operating cost savings and long term durability. We also chose a PT slab construction type, which means that the second floor is structural concrete with wood framing above. Construction started in September, 2012 (read the DJC story about our construction start) and was completed in September, 2013. You can watch the buildings rise by following our construction in progress pictures on this page!
Lease Up - IHI does not self-manage; we hire professional property managers to handle day-to-day management of our housing, which includes collecting rents, taking care of maintenance requests, and paying the bills. They also handle lease-up, which is a big undertaking and must be completed on a strict schedule to meet tax credit delivery dates. Income Property Management is managing the Magnolia. They began pre-leasing units in July, well before future residents could visit or see an apartment, and finished leasing all 50 units on October 31, 2013 (spooooky!). The Magnolia, with its modern design, high-end finishes (concrete floors, granite countertops, roof decks), and great location attracted nearly 3 applications for every unit and leased in record time. Because one of IHI's goals was to provide affordable housing to people who are quickly being priced out of Northeast Portland, we used a local, grassroots marketing strategy rather than conventional advertising methods. We put up leasing signs on the building and focused our outreach on local businesses, community centers, and partners. We wanted people who already lived and worked in the community to know that an affordable option was available. It worked! The Magnolia is now home to 50 households, most of whom had a connection to the community. And rents are affordable - one-bedrooms started at $499/month, less than half of what is being charged directly across the street.