Takoma Park,
Maryland
CPDC's vision for
Essex House was to preserve a source of market-rate
affordable housing, create an apartment living environment
equal to the quality of high-end apartments in the area,
create conditions to encourage a mixed-income and diverse
community, and provide opportunities and support for
resident participation in the development
process.
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Property and Community
Profile
Essex House is a 135-unit high rise apartment building
consisting of 67 one-, 45 two-, and 23 three-bedroom units.
Amenities include large apartments, property-paid utilities,
wall-to-wall carpeting, a camera security system, laundry
room, children's play ground, a pool, parking, and two
community rooms with kitchen facilities.
The demographic profile at Essex House is diverse. Most adult residents are of working age (only about 9% of the adults are senior citizens) and most of their children are young (22% of residents are children 13 years-old and younger). Only 3% are teenagers from 14 to 17 years-old. The resident community is also ethnically diverse. A majority of residents are African-Americans, but African immigrants, Indians, Hispanics, and Anglo-Americans are also represented.
The income distribution of the
resident community is mixed. Fifteen percent of residents
earn more 60% of the area median income while 59% of the
total number of households earn 50% or less of median
income. Most residents' primary source of income is work,
although some receive income supports such as social
security income, disability, and Aid to Families with
Dependent Children. The residents of Essex House have a wide
variety of vocations --some are professionals, teachers,
taxi drivers, service workers, social workers, and small
business owners.
Financing Structure
Essex House was a REO purchase from Freddie Mac. Many other
for-profit developers had reviewed the acquisition before
CPDC. It was purchased by a limited partnership, with CPDC,
Inc., a wholly-owned subsidiary of CPDC, as the general
partner with a one percent interest. CPDC has guarantees to
the limited partner through the partnership agreement, but
has not guaranteed any loans. CPDC was able to bring seven
different layers of financing to complete the development.
The sources included equity from the syndication of
low-income housing tax credits by The Richman Group of
Connecticut; taxable bonds issued by the State of Maryland;
a second mortgage from Maryland's Rental Housing Production
Program; a soft second mortgage from Montgomery County's
HOME and CHIF funds; a forgivable loan from the Federal Home
Loan Bank Board of Atlanta's Affordable Housing Program;
PEPCO rebates for energy efficiency, and equity from the tax
credit investor.
Different financing sources all
require different compliance requirements which need complex
monitoring. The lender/finance compliance generally requires
a certain number of apartments, and in some cases particular
units, be leased to households with specified income levels.
Most of the lenders/finance sources follow the HUD low- and
very low-income standards, but not all. Also, each unit has
a different rental rate as set by the rent control ordinance
of the local jurisdiction. During rent up and in asset
management, CPDC carefully monitors management practices to
ensure compliance.
Construction Management
The renovation of Essex
House included: a new heating ventilation and air
conditioning system; new domestic hot water system; rebuilt
elevator systems and cabs; restoration of trash chute and
new compactor; new roof; decorative metal roof trusses; new
balcony railings; pool deck repair; new children's play
area; restored parking surface; landscaping of site; wheel
chair ramps and wheel chair parking spaces; renovated
laundry facilities; new mailbox room; new community rooms
including kitchen and office and bathrooms; new management
office; new carpeting throughout; plaster repair and
painting of all common areas; new energy efficient windows
and patio doors; new energy efficient interior and exterior
lighting and fixtures throughout; new kitchens including
cabinets, counters, flooring, lights, ventilation, and
appliances; new carpeting throughout units; plaster and new
paint throughout units; bathroom tile and tub repair, new
vanities, floors, lighting, and ventilation; new fire and
smoke alarm systems; reconfiguration of some units to create
wheel chair accessible and visually-hearing impaired
accessible units.
About two-thirds of the apartments
were occupied at the time of acquisition. Renovation of the
apartments was completed while residents still occupied
their units. Temporary CPDC staff, called Resident
Construction Coordinators (RCC), worked on a daily basis
after residents left for work to move resident property from
one area of the apartment to another to allow construction
crews to work. The RCC staff, supervised and monitored by
the CPDC project manager, coordinated with the site
construction supervisor regarding the schedule of unit
turn-over. The construction process in the apartment units
was complicated and required close attention and
coordination with the general contractor, the residents, and
the resident association.
Resident Association Participation
Before CPDC purchased Essex
House the resident association was inactive. During
acquisition, CPDC held many open meetings with the residents
to describe the organization, the construction plans, and
how CPDC would approach long-term ownership. These meetings
allowed CPDC to solicit resident opinion and advice on
building conditions and needs.
After acquisition, CPDC's Director of Human Services and a social work intern from Catholic University worked with the residents to revive the residents association, conduct a community needs assessment, and plan for Essex House community activities to meet those identified needs.
On the development side, the project manager began to meet and communicate regularly with the Essex House Tenants Association and their leadership. Because the renovation occurred with residents still occupying their apartments, there was quite often daily, and always weekly, coordination with the resident association and the residents regarding construction procedures and progress.
Today, the relationship with the
Essex House Tenants Association continues. The focus is now
on opening an after-school
activities center in the
community room, which includes a library, crafts, games, and
computers for school work and educational programs; hiring a
community center coordinator; and connecting with other
service resources already available in the community.
Marketing and Asset
Management
Since interim income was an
important component of the project financing, marketing of
units and retention of residents was very important.
Marketing a property undergoing construction can be
difficult. Management was directed to market aggressively to
all communities through foreign language papers and flyers.
Outreach was conducted in shopping areas and mass transit
terminals; with large area employers such as the local
hospital; and with transitional housing providers and
agencies serving special needs populations.
CPDC continues to closely monitor operations. The complex financing structure requires careful income re-certification, record keeping, and reporting. Operations expenses and practices are reviewed and tracked to ensure that Essex House maintains high maintenance standards and a customer-oriented attitude in a cost effective manner.
