A neglected affordable housing community has undergone a major turnaround in Buffalo, New York.
Community Preservation Partners (CPP) and Rochester's Cornerstone Group have recently completed an extensive rehabilitation of the 220-unit Ellicott Park Townhomes, preserving the property as affordable housing for years to come.
Built in 1967 on two noncontiguous parcels as part of an urban renewal effort, the development featured 150 Section 8 units across 21 two-story townhouse-style buildings.
The aging development had not seen any notable rehabilitation, building systems were well beyond their useful life, and a number of uninhabitable apartments sat vacant while squatters took over others, says John Fraser, vice president of development at CPP.
As his firm was working on the acquisition, the property failed its federal Real Estate Assessment Center inspection. The development’s deteriorating conditions and expanding scope of work would have scared off many developers, but CPP and Rochester’s Cornerstone dug in.
“The residents deserve better. Buffalo deserves better,” says Fraser. “We were able to go in and use our expertise to leverage the resources needed to turn the property around.”
The veteran developers recently completed renovations at Ellicott Park, including kitchen and bathroom upgrades, new sewer lines, and other improvements. Significant exterior upgrades included window replacements, brick masonry repairs, and a new roof.
The total development cost was about $54.7 million, with a total investment in renovations of $14.2 million. New York State Homes and Community Renewal allocated 4% low-income housing tax credits (LIHTCs) to the project, which generated an equity investment from PNC Real Estate. The Erie County Industrial Development Agency issued tax-exempt bonds and worked with the city on a payment-in-lieu-of-taxes agreement for the property. Ready Capital provided key loans.
The Section 8 contracts were also extended for 20 years under the Mark-Up-to-Market option. In addition to serving as co-developer, Rochester’s Cornerstone has taken over property management at Ellicott Park.
Prior to the acquisition, 70 units lacked formal affordability restrictions and were considered naturally occurring affordable housing. Recognizing that some of the residents in these apartments were likely earning between 70% and 80% of the area median income (AMI), the team used the LIHTC program’s “income-averaging” option that allows some apartments to serve residents earning up to 80% of the AMI instead of the typical 60% threshold.
“Sometimes you have to see the vision at the end and what a property can be,” Fraser says. “… We were able to achieve it. The reward is having a stabilized property where residents are proud to live in and consider home.”