Due diligence is extremely important when developing a community like the SEASONS, especially to ensure that the retail component is compatible with the residential. One challenge was that construction of both the commercial and the residential components of the project had to take place while the few businesses remained operational.

The network of partnerships and the financing structure to create affordable housing can be intricate. For example, with SEASONS at Ontario, construction financing for the residential component of $3,165,000 was provided by Bank of America Community Development Bank with long-term financing through credit-enhanced tax-exempt bonds of $2,325,000; Edison Capital Housing purchased $2,090,000 Low-income Housing Tax Credits. Overall, the combined project cost approximately $24 million, including $5 million in redevelopment funds, of which $1.5 million was for the commercial side and $3.5 million for the residential side. The city purchased the land and leased it to LINC Housing and also made a loan to be repaid by residual receipts from cash flow.

 
All pieces must be in place
One of the first requirements for building affordable housing is purchasing large sites at a reasonable price. Particularly in the early stages of neighborhood reinvestment, builders need land at prices that offset the construction costs and risks associated with building affordable housing.

There are plenty of sites in city neighborhoods containing abandoned buildings and vacant lots that may be ideal for this type of development, however some of these sites may be encumbered by legal problems like tax delinquency.

Whether building new housing or refurbishing Here are a few key lessons to consider when building affordable housing:

Vision
This may be the most important factor. The ability to envision and communicate the completed project will help with overcoming obstacles and working with local citizens, politicians, government officials and other groups to build the type of community that will provide a wide range of long-term benefits.   Continue »

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