A Mix of Funding Brings LEED Platinum Certified Housing Development to Philadelphia

The Paseo Verde housing development – dedicated at a ribbon-cutting ceremony earlier this week – seems to have something for everyone: energy-efficient design, a transit location nearby, a health center, and a mix of low and moderate-income housing. In fact, it is the nation’s first development to be certified LEED for Neighborhood Development, or LEED-ND.

Located just outside Temple University’s campus in North Philadelphia, the development holds 67 moderately priced housing units ($1,155-$1,450 per month) and 53 rent-controlled units for families making under $68,000 a year. A health center with on-site nurses and managed by Public Health Management Corporation (PHMC) is on the premises. The green design features, to name just a few, include a storm water management system, solar panels and high-tech energy efficient thermostats.

How was this possible? How were the developers able to include both a sustainable design and low-income housing units? Both are considered an expensive addition to any development, let alone one in a depressed neighborhood.

Paseo Verde is located directly east of the Temple University SEPTA Station.

A mix of funding

What is immediately clear is that the project received a wide array of funding. The state, private sector and a number of local and federal development agencies all contributed to the $48 million project. Around $12 million came in the form of grants, while the rest came from tax credits provided by organizations such as the Philadelphia branch of the Local Initiatives Support Corporation (LISC) and bought by investors such as JPMorgan Chase & Co.

New Market Tax Credits and Low-Income Housing Tax Credits paid for the lion’s share of the project’s costs.

Some of the smaller funders include local unions who provided tax credits for the use of union labor in construction, discretionary funding from Senator Bob Casey and former Governor Ed Rendell, and a grant from The Reinvestment Fund for energy-efficient amenities and design features.

A complete list of funders from a press release sent out by the project’s nonprofit developer, Asociación Puertorriqueños en Marcha (Association of Puerto Ricans on the March):

Image via APM press release

But what exactly attracted so many funders? Andrew Frishkoff, executive director of Philadelphia LISC, explained that funders were in part attracted because of the developers’ experience with community development.

“You have a combination of a nonprofit developer with a good track record of affordable housing, plus a for-profit developer with a good track record of affordable and very green, environmentally-friendly housing. Those are the first two ingredients that helped attract funders who are really interested in affordability for low-income people and funders who are interested in the environmental element,” Frishkoff said.

APM spearheaded the project in partnership with the New York-based real estate firm Jonathan Rose Companies. The Latino-based APM has been in the community for 20 years, developing affordable housing and helping residents achieve financial security. Jonathan Rose Companies has built a reputation as a firm committed to green development in low-income neighborhoods.

But the reputation of the developer’s was just one the project’s appeals, Frishkoff said. He added that by including amenities that addressed a number of major social issues, such as sustainability, health and affordability, the project was able to attract funders with a range of interests. “With all those things together, you are able to attract funders who might not just be interested in a single affordable housing project,” he said.

Interior view of a unit at Paseo Verde. (Image via APM)

APM was committed to this idea from the beginning.

“In order to build this, we needed to have programming and things that are attractive to the community and funders,” said Nilda Ruiz, president of APM. She explained that APM made a point to be responsive to some of the city’s current goals, including greening and renewable energy.

“In 2008 when the Mayor started talking about making Philadelphia the greenest city in the country, we took the challenge,” Ruiz said. Soon after, APM began incorporating sustainability goals into its work in affordable housing and community development. This follows APM’s long tradition of providing a mix of services.

But even with Paseo Verde’s success, Ruiz is unsure this type of project is likely to happen again. In part, the “walk around money” or discretionary funds that  made up much of the $12 million in grants are harder to come by now, according to Ruiz.

“I keep thinking there won’t be another one like this again,” she said. “Its a tough one because of all the layers of financing.”

Frishkoff also thinks it is difficult for a single project to address so many issues at once and also secure sufficient funding. Not every neighborhood needs a multi-service, multi-income facility, he said.

“If I were talking to another neighborhood group, I would say that you want to address what the community’s priorities are and it’s great if you can have some of those priorities met at a single location, but its much more about how the neighborhood as a whole addresses those needs,” Frishkoff said.

Funders need to understand that any project, whether its a large-scale development or a few units of affordable housing, do not exist in a vacuum but are a part of broader “tapestry that the community is weaving,” Frishkoff said.