The Metropolitan Atlanta Rapid Transit Authority (MARTA) announced a partnership with Morgan Stanley and National Equity Fund (NEF) to establish the Greater Atlanta Transit-Oriented Affordable Housing Preservation Fund under MARTA’s transit-oriented development (TOD) program.
The fund will be used to support long-term preservation of affordable housing near MARTA rail stations by incentivizing and providing gap funding for owners and landlords of affordable units.
“We are proud to support the partnership between NEF and Morgan Stanley in the formation of this fund that will protect and preserve affordable housing within a mile radius of MARTA’s heavy rail stations,” said Jeffrey Parker, MARTA General Manager and CEO. “The ground-up development of new affordable units takes time, and we wanted to do more in the short term to help. Supporting this effort to preserve affordable units right now makes sense.”
Through the fund financing to multi-family property owners will be provided to help low-income families and individuals stay in their homes, and not be displaced as rents increase in transit-rich neighborhoods throughout the Greater Atlanta metropolitan area.
The fund will acquisition capital for multi-family affordable housing developments near or beyond the end of their initial tax credit compliance period; affordable housing properties that operate under the HUD Section 8 or other federal programs; as well as projects with no current rent restrictions that will become restricted upon acquisition.
Additionally, it will provide high-LTV non-recourse first mortgage debt to finance the acquisition or repositioning of projects in targeted MARTA transit-oriented districts.
“Affordable housing is critical to the well-being of families and communities,” said Matt Reilein, NEF President and CEO. “We’re proud to be part of this important effort to make sure Atlantans can afford to live near public transportation and connect to jobs they might otherwise not be able to access. This fund is about investing in the city’s future.”
NEF is the fund manager, with Morgan Stanley as the sole investor in the fund. Loans made by the Fund to finance the acquisition and recapitalization of affordable housing projects for up to a 7-year holding period that is expected to terminate upon the refinancing or tax credit re-syndication of the project.
“We are excited to work with NEF and MARTA on this important initiative to deploy capital to help preserve affordable homes throughout the Greater Atlanta region,” said Mike Mantle, managing director, head of Community Development Finance at Morgan Stanley.
Morgan Stanley is committing $100 million through NEF to assist regional partners in preserving transit-oriented affordable multi-family housing at risk of the following: market-rate conversion or financial/physical distress; expiring Federal Low-Income Housing Tax Credits (LIHTC) and U.S. Housing and Urban Development (HUD)-funded affordable housing including properties at, or near, the end of the LIHTC compliance period; or properties with or without rental subsidies.
In 2010 the MARTA Board adopted an affordable housing policy that requires 20 percent of residential rental units at MARTA’s TODs be affordable to those earning 60-80 percent of the Metro Atlanta Area Media Income (AMI) and for-sale units affordable to those earning 80-100 percent of the AMI.
In November 2019, the MARTA Board approved the release of mixed-income housing TOD Request for Proposals (RFPs) for stations it owns in Federal Opportunity Zones at Bankhead, Five Points, Vine City, Ashby, H.E. Holmes, West End, and Lakewood/Fort McPherson.
The development potential includes the possibility of 900 affordable units for persons earning 80-120 percent of the median household income by zip code, which allows MARTA to deliver the housing affordability desired by the communities in which its stations reside.
“While MARTA is aggressively supporting the development of affordable housing units on our properties, new development takes time. In a region that consistently ranks among the worst for economic mobility, the quickest and easiest way to have an impact is to preserve existing affordable housing near transit. Transit can be the great equalizer, providing access to education, jobs and healthcare,” Parker said.