A Fund Offering Opportunities from the Ground Up

A Fund Offering Opportunities from the Ground Up

In conjunction with Mayor Bowser’s housing initiatives and her commitment to addressing the housing needs in Washington DC, the Neighborhood Development Company (NDC) has uniquely positioned itself to be a part of the solution to the DC housing supply crisis. Since 1999, NDC has identified neighborhoods with a combined need for community, housing, and commerce in which to develop mixed-use multifamily projects that fulfill NDC’s mission and focus of People, Planet, and Profit. With the launch of NDC Opportunistic Real Estate Fund I, LLC, NDC is making its proven model of success available to institutional and accredited investors.

NDC has been delivering excellence to communities and its investors for over 22 years. The focus begins with making a positive contribution to the community by offering affordable housing ownership or rental opportunities in development projects that also address underserved needs like medical or food deserts to better address the needs of these communities.  NDC’s sustainability and environmental commitment includes paying close attention to a variety of design elements that minimize long-term operational cost for renters and owners. NDC leverages its experience to manage cost and mitigate risk to investors with the goal of providing the maximum return. NDC’s confidence in its products is reflected in its commitment to always invest alongside its investors in every development project.

In keeping with NDC’s historical focus on mixed-income housing, the Fund will be meeting an urgent need. The current housing crisis in Washington DC has led to a decade-long government commitment to invest over $1 Billion to develop thousands of housing units, particularly in economically disadvantaged neighborhoods. With this in mind, NDC Opportunistic Real Estate Fund I, LLC, will raise and deploy $100 million over the next 2-3 years, and has already identified 3 seed development projects for its portfolio.

NDC is excited about the opportunity it is presenting with this Fund and how it will have a positive impact on the communities in which it develops. NDC Founder and CEO Adrian Washington believes that “Everyone deserves a beautiful place to come home to. Our goal is to benefit and improve the existing community, helping instead of displacing long-time residents through environmentally friendly and socially impactful development.”

NDC Opportunistic Real Estate Fund I, LLC’s diverse portfolio of investments will provide investors the opportunity to gain favorable returns in socially and environmentally responsible ways and allow them to report an investment that targets each of these issues.

To learn more about the Fund, we invite you to go to our website or contact Claudia Boire at CBoire@NeighborhoodDevelopment.com.

Disclaimer: The information contained herein is provided for informational and discussion purposes only and is not, and may not, be relied on in any manner as legal, tax or investment advice or as an offer to sell or solicitation an interest in the Fund.  This blog may contain statements regarding our intent, believe or current expectorations; actual results may vary in a materially positive or negative manner.

Affordable Housing Trends in 2021

The affordable housing crisis has been an ongoing situation, and the events of the past year have only exacerbated the need. As we move into Q3 of 2021, transition to post-pandemic, it is critical to understand the various factors that are driving and/or influencing the increased call for investment and creativity in the affordable housing market.

The Affordable Housing Crisis

According to Pew Research Council, the gaps between high income, middle income, and low income families have grown significantly in the past several decades. Housing features strongly among the factors contributing and exacerbating this evolution. Studies funded by Habitat for Humanity show that by 2019, among households in the United States, 37.2% of households faced a housing cost burden (spending 30% or more on housing) and 1 in 7 experienced a severe housing cost burden (spending 50% or more of their income). The median income for lower income households also rose slower than the median sale prices for homes and rental rates, exacerbating the cost burden. These persistent changes have increased the need and demand for affordable housing.

In some ways, it has been a simple question of supply and demand. With the increase of income inequality, millions of Americans have been priced out of the housing market. At the same time, land prices and construction costs are continually escalating. This, coupled with increasingly burdensome regulations impacting both the budget and time to deliver new housing, has created our current dilemma of there being insufficient product to meet the current need.

A Growing Problem

The pandemic has been a travesty worldwide, severely impacting economies, families, and our general social fabric, but most especially the most vulnerable elements. The affordable housing sector has been hard hit on two fronts. The cost to end the crisis is a severe financial burden on state and local governments, decimating budgets that would otherwise go towards funding affordable housing. In addition, lower-income households have tended to work in industries hardest hit by the pandemic (i.e. small retail and food services industries) – where employers have been forced to close and lay off employees or remain open and risk potential infection or other repercussions.  This has placed “essential” workers at risk with less than adequate protocols for safety, which results in a high infection rate and job absence or loss as well.  In other words, less money is available to support the very people who are most vulnerable to the personal ravages of the disease. While various government entities have instituted rent moratoria, the underlying housing insecurity has increased.

 Developments in 2021

The factors that exacerbated the affordable housing crisis in 2020 will encounter additional issues in 2021, leading to a potential spike in the problem. Unemployment has continued to rise as businesses fail over the prolonged shutdown. While we have seen innovation and incredible efforts by many businesses, the restrictions on access, competition from increased online retail, and steady decline in consumers due to illness and their own fiscal crisis will feed into the cycle of lay-offs, which will impact the housing market. The time limits on the various rent relief efforts will be reached in 2021, and there is no certainty of a sufficient additional extension of assistance to residents in the face of landlord demands. The pandemic has made it clear that the safety nets in place in the housing market are fragile, and many people are one paycheck away from losing their homes. In addition, affordable housing construction costs and timelines will increase due to labor and material bottlenecks and COVID-induced loss of productivity. Finally, the fiscal crisis faced by state and local governments is continuing to spiral upwards as the costs associated with the pandemic increase, and revenues decrease.

Innovation, Creativity & Working Together

Several steps can be taken to address the looming issues. First, government officials need to hold fast to commitments in their budgets to affordable housing. Second, they need to take a careful look at the regulations and red tape that increase the cost of construction and delay the progress of construction. Third, creativity and partnerships with the private sector need to solve the problem that the norm for affordable housing construction is costly, lengthy and complicated, which makes it difficult to deliver the urgently needed housing. Coming up with new ways in financing, entitlement and construction will be needed to drive forward housing construction.

At NDC, we are committed to working in partnership with communities, the government and the private sector by coming up with innovations that allow us to continue to deliver affordable housing as the need continues to grow. We have multiple projects completed and in development throughout the DC Metropolitan area. Some of our projects include: 1100 Eastern, Park 27, High Street, and 3450 Eads in DC. Collectively, these developments will provide hundreds of low- and moderate-income housing units to the area.  Our innovations are based on increased efficiencies, stakeholder unification and several decades of experience in the space. Mindful of the crisis, we see ourselves focusing on continued efforts to deliver relief to the people most impacted.

 

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