CommonBond Communities recently purchased two existing apartment buildings in the Twin Cities and is preserving them as affordable housing options for residents.
Pine Point, a 68-unit apartment building in Coon Rapids, Minn., and Rainbow Plaza, a 108-unit building in Anoka, Minn., were part of CommonBond’s initiative to preserve affordability without government subsidy. CommonBond will buy properties sometimes referred to as naturally occurring affordable housing (NOAH) with a goal of minimizing rent increases and resident displacement. CommonBond is able to accomplish this by achieving a price below the appraised value, and/or with financing with low-cost sources who are interested in the mission of affordable workforce housing. An article about these two acquisitions recently appeared in the Star Tribune.
“The sale and the ability to retain these units as affordable offerings wouldn’t have been possible if it wasn’t for the forward-thinking and generosity of the previous owners,” said Deidre Schmidt, CEO of CommonBond. “Marilyn and Jack Washburn, and their daughter, Rhonda Charboneau, the original owners and managers of the buildings since the 1980s, approached us directly to consider the purchase and agreed to a below-market price allowing us to retain affordable rents.”
The previous owners took note of CommonBond’s first NOAH acquisition of the Boulder Ridge property in Apple Valley, Minn. in August 2016, when the Maryland-based Enterprise Community Loan Fund and an anonymous local foundation provided financing that allowed CommonBond to keep rents stable. The Pine Point and Rainbow Plaza sellers were motivated to pursue a similar approach when selling – even at a time when for-profit owners are aggressively purchasing properties like this, making updates, then significantly raising rents – adding to the affordable housing crisis.
“We just feel it’s the right thing to do,” said Jack Washburn, a Champlin, Minn. resident in his 90s. “The Twin Cities is in short supply of affordable places to live, so as we passed ownership on, it was a priority for us to work with an organization like CommonBond – making sure they didn’t suddenly become high-end properties and displace current residents. This is our way to give back to the community and do the right thing for many years to come.”
CommonBond plans to update the buildings over the next two years by making improvements to the common areas, management offices, laundry rooms, and to the units themselves. We are grateful for financing support from Freddie Mac, Mercy Housing, NHT-Enterprise, and NorthMarq Capital.