Enterprise Community Investment Offers Capital For Affordable + Green Housing

Everyone deserves a piece of the "green" pie.  At least that is what Enterprise Community Partners ("Enterprise") is all about.  Enterprise grants equity to non-profits and for-profit developers to build green space for low-income residents.  The catch?  Create sustainability by incorporating green standards in their projects.  Obviously the projects will have to meet certain standards for their tenants (i.e., rental housing projects should have at least 25 units reserved for renters with incomes below 60% of area median income) to receive the funding from Enterprise.  So far, they have set some pretty lofty goals in terms of funding but they are definitely seeing success.  In 2004, they launched the "Green Communities Initiative" aimed at providing more than $550 million to build affordable green housing.  One such project is Broadway Crossing in Seattle (pictured), which is home to 44 affordable apartments in Seattle's Capital Hill.  Found in the heart of a dense, urban neighborhood close to public transportation, Broadway Crossing boasts Energy Star appliances and lighting fixtures, southern and eastern facing units, low-flow water fixtures and green friendly paints, sealants and carpet.  One thing I haven't figured out is Enterprise's business model (i.e., how they generate a return on their investment).  Comments?

Green Communities
Enterprise
Broadway Crossing
Low-Income Built Green

Comments

[green]

how does enterprise generate money?first of all enterprise pays developers a profit,
grants charrets and below market financing.
this is all done in a market that will not rebound until 2009 according to countrywide financial.all homes have fallen in value for the last 2 years and will continue to fall in value.why should taxpayers pay to educate a developer? enterprise is a flawed biz model.
all developers should waive any profit..
sweat equity should be used just like habitat for humanity..there should be a commercial energymortgage.
enterprise uses tax payer financing credits to orginate mortgage and takes fees. on the back of taxpayers...this enterprise is a failure of a company.

[Garrett]

greenxpert,

Thanks for the comment. I have always wondered myself...thanks for bringing up some of these questions...I did a little digging and here is what I found out.

Just to be clear, the low income housing tax credit is a Federal initiative...not an Enterprise initiative. Developers who are planning an affordable housing project come to Enterprise seeking some level of funding. These developers typically have a bank loan already in place; however, they still need additional equity. In order to get those funds from Enterprise, the developer must go out and apply for tax credits on the project. Once they have gotten tax credits, Enterprise helps to facilitate the sale of those credits to investors who will pay cash, creating the remaining equity the developer needs to complete the project.

In terms of waiving a profit...in a low income/affordable housing project, the developer is restricted in the rents (and ultimate cash flow) that he can make on the project. So, by layering in a profit for the developer, he is able to make some money for taking on the risk of the project in the first place. However, the Federal government caps/limits the amount of profit a developer can make...its actually highly scrutinized...I don't think the developer is making out like Donald Trump.

As far as I can tell, Enterprise helps developers raise the necessary cash to complete an affordable housing project. Units in these projects go to those who cannot afford the "market rate" for rentals. So, in my mind, Enterprise is facilitating a process to help those who can't afford it. Yes, they charge fees to structure the deal and get it done, but I don't have any heartburn over that. Seems fair. Enterprise makes money, developers get their deal done and make money, and tenants have another choice for affordable housing. I might not agree with every aspect of Enterprise's business model, but it seems like they are far from a "failure of a company."

[Hamed Elbarki]

I think it's a fantastic idea... kudos to them!

[Schumacher Homes Press]

Custom built homes are the best way to go in my opinion. That way you get exactly what you want from your new home and you won't need to spend all of that extra money on remodeling.

[hypotheek tarieven]

It is great to see such blog.Thanks guys keep going like this.