The NHP Foundation & TOPA: A Mutually Advantageous Partnership Case Study: Woodmont Crossing Apartments
What is TOPA? In the past two decades, Washington, DC has benefited from a period of urban renewal unparalleled in the United States, adding more than 130,000 new residents since 2000. This surge in population has boosted the city’s economy as well as its cultural, sporting, and educational institutions. However, this rich period of expansion has brought
inevitable growing pains, most significantly a severe shortage of safe, affordable housing. The country’s affordable housing shortage has been felt most acutely in the District of Columbia. But longtime residents of the District have a tool at their disposal to combat displacement while at the same time improving their quality of living. The Tenant Opportunity to Purchase Act of 1980 (TOPA) affords tenants living in the District of Columbia unique rights to gain control of their housing circumstances. TOPA regulations give residents and tenants’ associations a first shot at purchasing the building in which they are renting. The TOPA process is structured with specific procedures which ensure tenants have enough time to assemble the right financing, negotiate a fair contract, and settle with the landlord on the sale of the property.
Washington, DC is unique among American cities in offering its residents an effective vehicle to gain more control over their housing via TOPA. However, many jurisdictions, under pressure from residents and tenant advocacy organizations, are currently considering laws similar to TOPA in order to combat displacement of longtime residents. With its long and successful history of positive engagement with tenants’ associations under TOPA, The NHP Foundation (NHPF) has the experience and know-how to make TOPA transactions work for residents, developers, and the District. In addition, NHPF’s drive to invest according to the latest standards of environmental, social, and governance (ESG) principals makes TOPA transactions in the District an opportunity for both residents and developer. The NHP Foundation’s TOPA Properties NHPF’s involvement with TOPA began in 2015 with the purchase of Parkchester Apartments, a valuable source of affordable housing in Southeast DC. The acquisition and subsequent rehabilitation of Parkchester Apartments was the first of seven properties that NHPF in partnership with various tenants’ associations and invested residents of these communities, has preserved for generations of future District residents. Following the success of Parkchester, two additional properties, Benning Heights Apartments and Woodmont Crossing Apartments, were similarly purchased through TOPA and renovated to residents’ specifications. Currently, NHPF is involved in the renovation of two additional properties purchased through TOPA: Takoma Place Apartments and Anacostia Gardens Apartments. Lastly, NHPF acquired two other valuable affordable housing communities via TOPA, Columbia Heights Village Apartments and Ridgecrest Village Apartments. Initial planning and outreach with the tenants’ associations at these communities has begun in order to determine exactly what rehabilitation and improvements will best benefit residents. In total, 1,301 units have been preserved as affordable housing owing to the unique partnerships created when tenants’ associations exercised their rights and selected NHPF as their trusted developer partner. “TOPA is such a valuable vehicle for both developers and residents who want to retain control over their homes. Affordable, quality rental apartments which may have turned into market-rate, luxury units can instead be preserved for low and middle class residents of the District, who are then actively involved in decisions which improve their quality of life through the rehabilitation process,” says Mansur Abdul- Malik, Vice President, NHPF, and a key figure in several TOPA transactions. To better demonstrate the complexities of how NHPF manages a TOPA transaction, we are narrowing our focus to a single property that best demonstrates the process in a step-by-step approach—from project inception to purchase to rehabilitation—in order to show how these important partnerships benefit all parties involved. Case Study: Woodmont Crossing Woodmont Crossing Apartments, a 176-unit garden-style apartment complex in Southeast Washington, DC, was approaching the end of its initial Low Income Housing Tax Credit (“LIHTC”) compliance period at the beginning of 2017. Woodmont Crossing’s LIHTC status made the community an attractive property for redevelopment, ensuring the preservation of affordable housing in the area. The Woodmont Crossing United Tenants Association asserted their rights under TOPA and began a competitive selection process to determine which developer would best suit the needs of the community. Four initial bids were narrowed down to two, with NHPF eventually selected in May 2017 to become the new owner of the property and to begin a comprehensive renovation. TOPA regulations required the Woodmont Crossing United Tenants Association to post a $1.2 million deposit to preserve their right of first purchase, which NHPF provided as a show of commitment to
Woodmont Crossing Apartments
The result of TOPA: new kitchens for Woodmont Crossing residents
the Tenants Association. Woodmont Crossing was officially acquired for approximately $25 million in February 2018 and construction started on an $18 million rehabilitation of the property shortly thereafter. Rehabilitation of the property was substantially completed by December 31, 2018 and included:
• A 1,500 square foot addition to the club house • Replacement of water heaters • Replacement of HVAC units with state-of-the-art systems • Replacement of all lighting with LED fixtures • Increase in the size of the “tot lot” and addition of new equipment • Replacement of balcony decks on 15 apartments • Replacement of kitchen cabinets and countertops • Replacement of kitchen appliances with Energy Star models • Installation of over-the-range fire extinguishers • Replacement of interior doors, balcony doors, and main entry doors • Various upgrades to bring the property into compliance with the Americans with Disabilities Act
What would the alternative have been for the residents of Woodmont Crossing without TOPA? In other circumstances, the residents would have had no say in the selection of a new owner of their homes, and no influence over the scope of renovation to the property.
“TOPA offers the chance to preserve and upgrade affordable housing that otherwise would have gone to a conventional buyer who planned on putting perhaps $5,000 or so per unit into rehabilitation,” opined Neal Drobenare, Senior Vice President, NHPF, who continued, “We, on the other hand, put approximately $30,000 per unit into the renovation of the property while achieving a $2 million developer fee for ourselves. Woodmont Crossing is the definition of a win-win partnership.”
Using TOPA also meant that residents were able to address with the developer, in real time, if certain aspects of the renovation were not meeting their expectations. This constant flow of communication between resident and developer made for a more holistic project, where decisions were always made in consultation with residents and never imposed from above. Through this process, an enduring trust was built between residents and developer. Longtime Woodmont Crossing resident Nathan El Kebe echoed these sentiments: “My unit looks wonderful. Not only am I quite satisfied with the design and improvements, I also felt well cared for and respected during the process.” Added fellow resident Nancy Bogan, “The updates to our building are great and it’s hard to express the feeling we get from living somewhere so new and fresh, that we had a hand in creating.”
Residents garden on Earth Day at the newly expanded Club House at Woodmont Crossing
Woodmont Crossing provides an ideal example of how NHPF’s commitment to investing according to ESG principles contributes to a positive return on investment while maintaining project sustainability, ethical standards and community development, and inclusive governance.
• NHPF installed state of the art HVAC systems, water heaters, energy star rated kitchen appliances, LED lighting, as well as new windows and doors • The installation of new equipment at the property resulted in more efficient energy usage and a reduction of resident utility bills
• Addition of 1,500 square feet to the community club house has allowed for expanded resident services programing and other community events • Extensive rehabilitation has improved quality of living conditions for existing residents, at no increase in rent • Substantial investment benefited local Community Based Enterprises (CBEs) involved in the rehabilitation, many of which were minority- and women-owned (MWOB)
• NHPF’s holistic approach to development combined with the TOPA process meant residents were integral to decision making throughout the rehabilitation process, further building trust between residents and NHPF
Conclusion Powerful partnerships are realized when everyone has a “hand in creating.” NHPF and Operation Pathways both recognize the strength that comes from collaboration with the residents of our communities. It is through this mutual respect that resident voices are heard and important housing goals can be met and exceeded. TOPA is an important tool of collaboration that will continue to provide housing opportunity for communities in need.
122 EAST 42ND STREET, SUITE 4900, NEW YORK, NY 10168 • 646.336.4940 1090 VERMONT AVENUE, NW, SUITE 400, WASHINGTON, DC 20005 • 202.789.5300 150 N. MICHIGAN AVENUE, SUITE 2800, CHICAGO, IL 60601 • 312.216.5103 nhpfoundation.org
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