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Creative Smart Growth Strategies

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One of the biggest advantages of smart growth – housing built in walkable neighborhoods located near mass transit, grocery stores, and shops – is that it creates desirable communities and draws homebuyers. A National Association of Realtors survey found that more than half of respondents preferred a smart growth neighborhood to a suburban subdivision.

But smart growth demand also can have a downside – limited housing stock and high development costs — which makes building transit-oriented affordable housing particularly challenging.

But it doesn’t have to be that way.

In Arlington, Va., AHC Inc. has a track record of using creative ideas to build affordable housing in dense urban areas, where land can be expensive and scarce. Some of its approaches – from land swaps to creating land – could be replicated elsewhere as well. AHC’s experience provides examples of how affordable housing can be a key part of a smart growth strategy, helping to reach the goal of creating communities that are diverse, as well as desirable.

Here’s a look at some of AHC’s projects and strategies – and some of the challenges overcome.

 Swapping Land

Community concerns about density and building heights are a common challenge in smart growth areas. To move forward such a stalled project, AHC engineered a land swap with a prominent developer to reconfigure a multi-pronged project that included affordable housing along with high-end townhouses and 450,000 square feet of office and retail space. The land swap moved the townhouses next to existing single-family homes and nestled AHC’s 90-unit, four-story building closer to the retail and commercial spaces. AHC’s building, The Jordan, which encloses a welcoming courtyard, is separated from the larger buildings by an urban greenway.

 Using Nontraditional Spaces

With space at a premium in Arlington’s dense Metro Corridor, AHC transformed a parking lot next to an existing affordable garden-style apartment complex (Woodbury Park) into twin nine-story buildings – one affordable and one market rate. The condo (The Park at Courthouse) helped subsidize the affordable housing apartments. A passerby couldn’t tell the difference in the buildings, which are connected by a brick-lined courtyard. The end result: On a site just 1/4 mile from the Courthouse Metro Station, AHC created The Frederick with 108 affordable apartments, a 4,300-square-foot community center with onsite Resident Services programs, underground parking, and play areas for children.

 Photo: Twin buildings – one affordable (The Frederick on the right) and one market-rate (The Park at Courthouse on the left). 

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AHC Posts $331M in Development in 2014

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As housing costs escalate and the number of affordable apartments dwindles, AHC is working hard to create innovative partnerships and financing opportunities to preserve and develop housing opportunities in the VA-MD-DC region.

In 2014, AHC’s multifamily development team closed on eight transactions with a total development value of $331 million and containing more than 1,400 units — pushing AHC’s total multifamily portfolio above 6,500 units.

AHC also has two affordable apartment projects under construction – the 83-unit Shell in Arlington is opening its doors to families this spring, and the 78-unit Jackson Crossing in Alexandria (opening late 2015).

Underscoring the complexity of today’s housing market, no two developments were alike.

AHC’s 2014 projects include the acquisition of six existing rental communities containing 975 apartments, construction of 76 rental townhomes, and the redevelopment of an existing AHC-owned, 364-unit, historic property.  The apartments are primarily located in the metro region’s high cost-of-living rental submarkets in Arlington, VA and Montgomery County, MD, along with developments in the District of Columbia and Baltimore.

The projects utilized a variety of financing strategies, reflecting the challenges involved in assembling funding in the current marketplace. Several transactions were completed with innovative financing structures that relied heavily on market-rate tools and deal structuring techniques.

The properties provide homes for households with a variety of incomes, ranging from conventional affordability levels (50% and 60% Area Medium Income) to workforce housing (80% AMI) to full market-rate homes.

 Photo: The Shell in Arlington opens its doors to families this spring.