A lesson in building and protecting affordable housing

Via Verde by Jonathan Rose.

Jonathan Rose Enterprises

Jonathan Rose Companies is one of the largest developers of affordable housing in the United States. Since 1989, the New York-based for-profit developer has delivered more than 100 affordable and mixed-income communities, such as the new 709-unit Sendero Verde in East Harlem, a mixed-income housing project that will house people from all walks of life. income levels, including those who were previously homeless to those with middle incomes. It is the largest passive house development in the country and includes on-site social services and a 20,000 square foot yard.

Another notable project is Via Verde in the South Bronx, a nearly 10-year-old, multi-award-winning, 222-unit building that is primarily low-income rental and 71 middle-income co-ops, and includes a medical clinic and community garden on its 1½ acre site. The pioneering developer made it his mission to build homes for all segments, not just for the lucky few.

“And by the way, just to give you an idea, a family could buy a two bedroom duplex apartment, with washer and dryer, two bathrooms, a really nice apartment, for $ 159,000 [U.S.] with a total cost between the mortgage, the taxes and everything, of $ 1,500 per month as part of the co-op program, then owning an apartment, which is worth a lot more now, ”said founder and chairman Jonathan Rose in an interview last week.

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Sendero Verde by Mr. Rose.

Jonathan Rose Enterprises

Mr. Rose, who was born in 1952, began working for a large, successful family development company founded by his grandfather and great-uncle in 1926. But inspired by the civil rights movement, he decided that he wanted to build ecological housing. and really affordable. He also wanted to grow his business nationwide and form partnerships with cities and non-profit organizations. The Washington-based Urban Land Institute recently awarded Dr. Rose the ULI Award for Visionaries in Urban Development.

“I’m really lucky. I was born with a vocation. I was born into a family of market rate real estate developers who made housing affordable. My dad and uncles, as well as his dad and brother were developers in New York and I loved the idea of ​​building and creating communities, but at the same time, when I was quite small, I was deeply interested in environmental conservation and social issues., “He says .

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A search for more than makeshift housing solutions

Mr. Rose is a developer and town planner, and author of a book on the future of cities, entitled The Well-Tempered City: What Modern Science, Ancient Civilizations, and Human Nature Tell Us About the Future of Urban Life.

He also established the Garrison Institute in a beautiful former monastery, which offers retreats and holds seminars on planetary health.

Jonathan Rose.

Jonathan Rose Enterprises

And he sits on the board of directors of Enterprise Green Communities, which bills itself as “the only national green building program created with and for the affordable housing industry.” He sits on the board of directors with actor Edward Norton. Mr. Norton’s grandfather was urban planner and developer James Rouse, an early inspiration to Mr. Rose because Mr. Rouse also viewed urban development as an achievement of civic values, not just profit margins.

A city, he says, is not just a collection of dense buildings. Useful development becomes part of the community. People need housing, but they also need good schools, access to work and health care, parks and open spaces. He calls them “communities of opportunity”.

“The lack of affordable housing is a symptom of an imbalanced system,” says Rose. “The best solutions are integrated solutions.

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He also disagrees with the ubiquitous refrain that if enough supply at the market rate is built, eventually prices will drop and affordability will be achieved.

“I’ve heard it all my life. Supply is important, but it will not solve the affordable housing crisis, especially in a place like Vancouver, where supply is physically limited. And second, the construction costs are expensive. Affordable housing must be subsidized. Basically, the market cannot build affordable housing. If the market builds a lot more – even if rents drop 10% or sales prices drop 10% – that won’t solve the affordable housing crisis.

Moreover, he adds, affordable housing is not universal.

“The need for affordable housing is extremely diverse, and many of the things are things that the market will not naturally develop. The market alone cannot therefore be a solution. It’s number one.

“We understand more and more a need for supportive housing, housing that comes with some kind of social service, and the market is not going to build that. So there are portions of the market that more supply will resolve, but it’s only a small portion. “

Sendero Verde is a mixed income housing project that will house people of all income levels, including those who were previously homeless to those with average incomes.

Jonathan Rose Enterprises

Government grants are key to its developments, which is typical of how most affordable housing is built around the world, he says. This subsidy can take the form of a government subsidy, or a tax credit, or even increased density.

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“In the last 20 or maybe even 25 years, every piece of rental housing built in New York City has been built with 25% affordable housing because that’s what made developers the most money. It’s called inclusive housing, and he built a special type of housing. … From a social point of view, they integrate very well. You can have a very high end building and if there are nurse aides and teacher assistants, and other people who really need affordable housing, it works. It is part of the toolbox.

It’s just one tool among many, he adds. His company has created five affordable housing preservation funds. The fifth fund closed a year ago, after raising US $ 525 million from around 260 investors which included pension funds, high net worth individuals, university foundations, registered investment advisers and foundations including l The goal was both a solid return on investment as well as social benefits. and environmental returns.

It takes a two-pronged approach, building new affordable mixed-income green housing, and purchasing existing affordable housing, most of which was built in the late 1970s and early 1980s.

“We buy these especially if they are at risk of gentrification, and we are preserving them as affordable, and with all of our projects, both new and preservation, we are bringing social health and education programs to our residents . … New construction takes a lot of risk, collateral and skill, but the way financing works, not so much equity. But buying thousands of existing units takes equity. We therefore raise private equity funds.

Via Verde is an almost 10-year-old, multi-award-winning, 222-unit building that is primarily low-income rental and 71 middle-income co-ops, and includes a medical clinic and community garden on its 1 ½ acre site.

Jonathan Rose Enterprises

“Last year, we completed our fifth private equity fund focused solely on purchasing existing affordable housing. And affordable housing has the characteristic that if you buy in those strong markets, like New York, San Francisco, Boston, Los Angeles, Chicago, the buildings are always full. They have very stable cash flow and make very solid investments, and that’s how we’ve been able to raise funds to do this work, and it’s allowed us as a company to grow and have more money. ‘impact. It takes a long time to build new buildings, and it’s easier to buy and renovate the old ones, so we do both.

It’s a very different model from the usual buying of existing homes and demolishing them to build more density at higher rents.

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“Our mission is to preserve affordability, so we’ve been buying buildings, and we’ve been buying them to be affordable for decades, so there’s no displacement. [of people].

“What we understood is how to finance and how to improve these buildings, so we really understand the subsidy programs and the tax relief programs, etc., to make them financially viable in the long run and keep them affordable. “

Patrick Condon, professor of urban design at the University of British Columbia, originally from Massachusetts, spoke about the American approach to affordable housing in his recent book, Sick city.

“The United States is doing a little better at providing affordable housing,” he says. “Most affordable housing in the United States these days is provided through tax grants to businesses that are ready to create affordable housing. “

“But that said, the level of public support for affordable housing in the United States is only slightly less pathetic than in Canada. The United States fell victim to the same “Reagan / Thatcher revolution” that drastically removed governments around the world from their responsibility to provide housing for the poor or the working class.

“It’s the same problem we have here. With the abandonment of affordable housing by state and federal governments, it is largely up to the communities to deal with it. Here we use things like the [community amenity contribution]. There they use things like inclusive zoning requirements.

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About Robert Valdivia

Robert Valdivia

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