A new multimillion dollar loan fund aims to preserve local affordable housing that’s at risk of becoming market rate housing or where tenants are at risk of being displaced.
The $11 million fund is backed by the Henry L. Hillman Foundation, The Heinz Endowments, UPMC for You; a Medicaid managed care plan, and Michigan-based Cinnaire Lending, the groups announced last week.
Pittsburgh-based Neighborhood Allies will perform marketing and other functions for the fund.
“As real estate markets across the county continue to improve, we have to stave off displacement of residents who live here, especially those in neighborhoods that have experienced decades of disinvestment and are now poised to help the county grow once again. We believe Pittsburgh Affordability Partnership has the potential to help revive neighborhoods while also ensuring that their future includes affordable housing,” said Rob Stephany, senior program director of community and economic development for the Endowments.
The fund came about after several years of discussion by advocates, Stephany said, as well as research into properties with expiring affordability covenants.
Motivation to create the fund also came about after a recent occasion where local nonprofit developer Action Housing attempted to buy a Penn Hills apartment complex where affordability restrictions were expiring, but was outbid by a for-profit company that could move more swiftly, Stephany said. Affordable developers often must take longer to assemble financing from various sources, including government sources that don’t move quickly. Stephany said this fund aims to be faster and nimble enough to assist affordable housing providers in similar situations.
Stephany said preserving existing affordable housing also makes economic and practical sense, as it is much cheaper and easier than building new housing.
“Developing affordable housing takes so long and it's so expensive. It's very important, but we can only produce so many units a year of new affordable housing,” he said.
