Philanthropic initiatives such as the MacArthur Foundation’s Window of Opportunity program offer a distinct advantage in their capacity to function as a nexus for multiple government and private groups.1 For example, as part of this initiative, the MacArthur Foundation has funded preservation compacts in Cook County, Illinois; Massachusetts; and Ohio that address the challenge of preservation by convening and supporting interagency working groups (see “Models for Affordable Housing Preservation”). Perhaps the best example of this innovative approach is the Housing Partnership Equity Trust, a real estate investment trust (REIT) to which the MacArthur Foundation also contributed startup funds.2 This trust, which has raised $100 million from private and philanthropic partners such as Citibank and Morgan Stanley, works with 12 nonprofit housing providers nationwide to acquire and rehabilitate affordable rental housing without relying on public subsidies or low-income housing tax credits. In April 2013, the trust announced its first acquisition: a multifamily development of 128 apartments in Aurora, Illinois, which the nonprofit Mercy Housing Lakefront will rehabilitate. According to Drew Ades, the trust’s chief executive officer, “the underwriting and return structure of [the trust] enabled Mercy Housing Lakefront to make a competitive bid, perform a thorough due diligence process, and ultimately close on the transaction in far less time than is typical of a transaction that would be dependent upon low-income housing tax credits.”3 Ades expects that the REIT’s structure will enable it to take its approach to scale.
- “What’s the Story?” The Preservation Compact website. Accessed 22 May 2013.
- “Housing Partnership Equity Trust.” Housing Partnership Network website. Accessed 4 June 2013.
- MacArthur Foundation. 2013. “Housing Partnership Equity Trust Launches With $100 Million in Funding For Affordable Multifamily Housing,” 29 April press release.
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