BBVA Compass’ investment in a newly constructed affordable housing project in Fort Worth was held up as a model of public and private cooperation last week during a VIP tour of the facility.
BBVA Compass is relying on a variety of vehicles — including $16.3 million in federal Low-Income Housing Tax Credit equity, a $17.2 million construction loan, $5.7 million in permanent debt, $1.2 million from the City of Fort Worth and $700,000 from the City of Fort Worth Housing Finance Corporation — to finance the 140-unit development known as Columbia at Renaissance Square.
Fort Worth Mayor Betsy Price praised BBVA Compass for its crucial support in getting the project off the ground when she was giving HUD Secretary Ben Carson a tour of the facility, which is set for its grand opening later this year. Carson visited Columbia at Renaissance Square as part of his listening tour to HUD-financed facilities.
“I am very proud of our work here in Fort Worth,” said BBVA Compass Fort Worth Market CEO Brian Happel, who said he was able to bend Secretary Carson’s ear about the project and the bank’s larger five-year, $11 billion commitment to serving low- to moderate-income areas and its comprehensive financial-education efforts. “And it’s pretty clear that Mayor Price and Dr. Carson and everyone there at Columbia at Renaissance Square felt that it can serve as a model for how to use government and private industry to lift up a community and create opportunities where few existed before.”
Columbia at Renaissance Square is located in the Mason Heights area of southeast Fort Worth. It eventually will have pedestrian-oriented streetscapes, large green spaces and play areas for children, as well as a YMCA facility, a grocery store and health clinics. To qualify, all residents must have incomes no greater than 60 percent of the area median family income. In Tarrant County, which includes Fort Worth, that means qualifying families must have incomes of no more than $45,000, and several units will be set aside for families with incomes that are far less.
BBVA Compass Director of Community Development Capital Keith Burgess, whose team was involved in hammering out the financing details on Columbia at Renaissance Square, said the quality and the level of amenities there are emblematic of the evolution of the approach to the development of affordable housing under the Low-Income Housing Tax Credit, or LIHTC. The LIHTC provides tax incentives to encourage individual and corporate investors to invest in the construction, rehabilitation, and preservation of affordable rental housing for low and moderate-income households.
The Low-Income Housing Tax Credit has brought a lot of oversight and private market discipline. … The end result is that lower-income individuals have better choices for high-quality affordable housing.
“The Low-Income Housing Tax Credit was introduced as part of the Tax Reform Act of 1986, and has become one of the most successful public-private partnerships to ever address housing policy,” he said. “The idea was to encourage private investors to inject cash equity in affordable housing projects in exchange for federal tax credits. Investors are held accountable for maintaining project compliance for 15 years. This has brought a lot of oversight and private market discipline, which has contributed to the success of the program. There are a lot of levers that come into play here, but the end result is that lower-income individuals have better choices for high-quality affordable housing.”
Burgess and his group have closed more than $350 million in loans and another $400 million in equity investments in the past two years, accounting for more than 3,000 units of affordable housing being developed or preserved across the bank’s footprint. The work Burgess’s team is doing also supports the bank’s five-year, $11 billion commitment to create opportunities by lending, investing, and providing services to low- and moderate-income people and neighborhoods.