Introduction to Haven Housing Initiative
BH Properties is expanding its area of expertise beyond market-rate developments across the country. The Los Angeles-based developer is launching Haven Housing, a standalone multifamily investment platform that will acquire and operate older income-restricted apartment buildings and workforce housing communities, CoStar reported. BH is known for owning, operating and repositioning value-add properties in several states, with the new venture focusing on high-growth Western U.S. markets.
Launch and Initial Plans
To kick things off, Haven Housing is starting with 2,500 units under its management and is looking at 100-plus-unit, garden-style properties in markets in Arizona, California, Colorado, Nevada, Oregon, Texas, Utah and Washington. Specifically, it’s targeting properties that were developed under the federal Low-Income Housing Tax Credit program and have reached the end of their 15-year compliance periods. BH Properties plans to renew affordability contracts and renovate properties to create more long-term value.
Leadership and Strategy
Driving the new initiative is Connor Mortland, serving as managing director and head of affordable housing acquisitions for BH’s new arm. “Haven Housing allows us to operate with clarity and focus in the residential sector,” BH Properties’ president, Jim Brooks, said in a statement, per Connect CRE. Mortland will bring “both leadership and depth to this platform” with a “proven track record in sourcing, acquiring, and managing affordable communities.” BH is the latest investment firm to pursue this strategy of acquiring affordable apartment complexes rather than building new developments.
Market Context and Opportunities
Last year, Standard Communities acquired a $1 billion portfolio of 60 affordable apartment complexes in four states last fall, CoStar reported. The company’s multifamily portfolio includes about 30 properties. Western states like Arizona and Colorado have recently passed or proposed legislation incentivizing the preservation of expiring affordable housing stock. In Phoenix, for example, the Housing Phoenix Plan, established in 2020, aims to create or preserve 50,000 homes by 2030 using methods like landlord incentives and expansion of rental rehabilitation programs.
Challenges and Projections
In total, more than 520,000 affordable housing units are set to lose their tax credit protections between 2025 and 2038, CoStar reported, citing Yardi Matrix data. Another 330,000 units will see their extended-use agreements end in that same period. More than 520,000 federally subsidized affordable housing units are set to lose their tax credit protections between 2025 and 2038, with another 330,000 units exiting their extended-use agreements in that same period, CoStar reported, per Yardi Matrix. California, Texas, Florida, Ohio and North Carolina are expected to see the highest number of expirations.
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Conclusion
The launch of Haven Housing by BH Properties marks a significant step in addressing the affordable housing crisis in the United States. By focusing on acquiring and renovating existing income-restricted properties, Haven Housing aims to preserve and expand affordable housing options in high-growth markets. This initiative not only underscores the company’s commitment to affordable housing but also highlights the growing trend among investment firms to prioritize the preservation of affordable housing stock.
FAQs
- Q: What is Haven Housing?
A: Haven Housing is a standalone multifamily investment platform launched by BH Properties to acquire and operate older income-restricted apartment buildings and workforce housing communities. - Q: What markets is Haven Housing focusing on?
A: Haven Housing is focusing on high-growth Western U.S. markets, including Arizona, California, Colorado, Nevada, Oregon, Texas, Utah, and Washington. - Q: How many units is Haven Housing starting with?
A: Haven Housing is starting with 2,500 units under its management. - Q: What is the significance of the 15-year compliance period for properties developed under the Low-Income Housing Tax Credit program?
A: Properties developed under this program reach the end of their compliance periods after 15 years, at which point they may lose their tax credit protections, making them targets for acquisition and renovation by Haven Housing to preserve affordability.
