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.
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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.
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By the numbers…
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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
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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.
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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
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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
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Case Study #1 10th Avenue, Oakland CA
10th Avenue (Eastlake)
Unit mix
– 29 One bedrooms– 5 Two bedrooms– 1 Studio
Purchase Price
– $7.15M
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Case Study #1 10th Avenue, Oakland CA
Location
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Case Study #1 10th Avenue, Oakland CA
Physical Building
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Case Study #1 10th Avenue, Oakland CA
Financing
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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
Case Study #1 10th Avenue, Oakland CA
Challenges
-High prices per unit
-Fast Closing w/ all due diligence completed
-Income verification for welfare tax exemption
-New City Bond Program (KK)
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Case Study #1 10th Avenue, Oakland CA
Key to success
- KK funds
- New City Regulatory agreement
- Welfare Tax Exemption
- Enterprise 1st position loan
- Allowing a subordinate loan
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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
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