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HUD High Performing Agency
Creating Affordable Housing
The San Diego Housing Commission (SDHC) created 810 additional affordable housing rental units in the City of San Diego through public-private partnerships and direct acquisitions as a result of an entrepreneurial investment strategy.
These additional rental units must remain affordable for at least 55 years and may be rented to residents earning no more than 80 percent of the San Diego area median income.
The creation of these affordable rental units was possible because of a September 10, 2007, landmark public housing conversion agreement with the U.S. Department of Housing and Urban Development—the largest public housing conversion ever approved at the time.
The agreement transferred full ownership and operating authority for 1,366 public housing units to SDHC for a nominal price of $1,366.
In exchange, SDHC committed to create 350 additional affordable rental housing units—a number SDHC far surpassed.
In 2009, SDHC launched an innovative Finance Plan and raised $95 million in low-interest Fannie Mae and FHA mortgages by leveraging the equity of its existing properties to create additional affordable rental housing in the City of San Diego.
SDHC invested in six public-private partnerships in which SDHC bought the land and provided a loan and ground lease to the developer.
After a 15-year tax credit compliance period, SDHC will have the option to buy any of the six public-private partnership properties.
In addition, SDHC purchased four properties.
SDHC’s acquisition of Park Crest Apartments in City Heights, a 71-unit apartment complex for seniors, on October 10, 2012, marked the final investment from the Finance Plan.
The four owned assets SDHC acquired can yield more equity through a second wave of leveraging, which will provide additional proceeds for another round of acquisitions when the time is right.
For more details about SDHC's Finance Plan, please read SDHC's "Creating Affordable Housing Through Public Housing Conversion" report.
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