ebaldc’s housing acquisition fund -...

EBALDC’s Housing Acquisition Fund

An Innovative Pathway to Affordable Housing in Oakland

Jason Vargas, Director of Real Estate11/2018

Who is EBALDC?

East Bay Asian Local Development Corporation (EBALDC)

We build healthy, vibrant, and safe neighborhoods in the East Bay.

A nonprofit community development org. 42 years in Oakland and the East Bay, we:

• Develop and manage affordable rental housing;

• Create retail spaces for local small businesses and community facilities;

• Foster increased economic opportunity for low-income families and individuals.

EBALDC’s Housing Acquisition Fund 2

Oakland’s housing crisis requires immediate action.

Our communities are struggling to stay here.

Speculative developers are acquiring properties and rapidly increasing rents

Public servants, nonprofit workers and service industry workers are moving hours away to find an affordable place to live.

These are the people who teach our children, our artists, our policemen, and restaurant workers.


By the numbers…


Oakland rents surpassed $3,000/month in late 2017

Now is the time for a new approach…

Oakland is losing the diversity and income mix that make it special


Oakland’s African American population decreased from 46% to 23%

Oakland is the fourth most expensive city in the country

Oakland has housing for households with incomes under $50,000 and market rate rents affordable to income over $100,000 and very little in between.

Introducing the Housing Acquisition Fund (HAF)

EBALDC piloted the HAF to preserve Affordable Housing in Oakland and stabilize rents in communities with displacement.


What is the HAF?

The HAF is a program/fund to address the loss of affordable housing by:

Acquiring existing apartment buildings prior to speculative

developers acquiring and rapidly increasing rents

Stabilizing their rents to help residents stay in their homes

Provide a “triple bottom-line” investment to address the crisis

while providing reasonable returns to investors.

– Social, Economic and Environmental


HAF Details

Ownership and financial returns

A limited partnership will be

created between EBALDC and

investor

EBALDC will be the General

Managing Member, and handle

operations (i.e. property

management)

5-7% annual cash return for

investor

Additional return upon sale of

property

10 year hold


Case Study #1 10th Avenue, Oakland CA

10th Avenue (Eastlake)

Unit mix

– 29 One bedrooms– 5 Two bedrooms– 1 Studio

Purchase Price

– $7.15M



Location

Placeholder Presentation Title 10


Physical Building



Financing


Bridge Sources Permanent Sources

$6,435,000 Community Housing Cap $3,797,410 1st. Position Loan (Enterprise)$357,500 NW Capital $5,000,000 City of Oakland (KK Funds)$277,800 TSSF$628,750 GP Equity

$7,699,050 Bridge Uses Total $8,797,410 Permanent Uses Total

Bridge Uses Permanent Uses

$7,150,000 Offer Price $7,699,050 Offer Price$403,950 Closing Costs $210,000 Closing Costs

$261,768 Developer Fee$28,600 Prepaid Expenses $61,592 Prepaid Expenses$81,500 Interest Reserve$35,000 Rehab/Reserve $565,000 Rehab/Reserve

$7,699,050 Bridge Uses Total $8,797,410 Permanent Uses Total


Challenges

-High prices per unit

-Fast Closing w/ all due diligence completed

-Income verification for welfare tax exemption

-New City Bond Program (KK)



Key to success

- KK funds

- New City Regulatory agreement

- Welfare Tax Exemption

- Enterprise 1st position loan

- Allowing a subordinate loan


Thank you for allowing us to share our vision for healthy, vibrant and safe neighborhoods in Oakland.

Jason VargasDirector of Real Estate Development

[email protected](510) 606 -1800


mailto:[email protected]

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