A New Partnership to Develop Moderate-Cost Rental Housing in University City
An innovative new partnership to preserve and develop moderate-cost rental housing opportunities for the entire University City community has been announced by Penn and the University of the Sciences of Philadelphia, who joined Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages, and the Trammell Crow Company. "The Partnership for Quality Housing Choices in University City" will focus on improving management and maintenance of rental units. It builds upon the success of Penn's "Community Housing Program," which works to increase homeownership opportunities in University City. First Union National Bank will provide up to $30 million in financing for the partnership.
The Partnership will provide a national model for stabilizing communities around large institutions, especially those communities where rental housing dominates the market. Penn and Fannie Mae launched the effort through an investment of $5 million each, for an initiative with a 7- to 10-year horizon. Fannie Mae funded its investment through its American Communities Fund (ACF), an equity and debt fund that is committed to investing in high-impact redevelopment initiatives that will serve as a catalyst for neighborhood housing and community revitalization. ACF was created in 1996 to provide capital to facilitate hard-to-finance housing and community development efforts. Additional investments in the partnership include $1.5 million from other partners and up to $30 million in mortgage financing from First Union National Bank. Funds from the partners will be used for investments in qualified rental properties. Existing multifamily buildings will be purchased, rehabilitated, and made available for rent. By providing better managed and maintained rental units, new and rehabbed rental housing will be attractive to young families, singles, faculty, and students--anyone attracted to the vitality of an urban, university community.
"The University of Pennsylvania has been a significant force in shaping demand for rental housing in its neighborhoods," said President Judith Rodin. "Now, in partnership with nationally prominent housing finance and service providers, Fannie Mae and the Trammell Crow Company, Penn, along with University of the Sciences, is positioned to strategically manage this demand for the benefit of the broader community.
"The preservation and development of moderate-cost rental housing opportunities throughout our neighborhoods will perpetuate opportunity for the entire community--students, seniors, young families, and the many employees of our local institutions--to enjoy the increasing quality of life in our University City neighborhoods, assuring its economic diversity for decades to come," said Dr. Rodin.
"We at Fannie Mae recognize that not everyone is ready for homeownership, and we want to make sure that those who are not ready have good, decent, and affordable housing options," said Jamie Gorelick, vice chair of Fannie Mae. "The goal of this unique partnership is to stabilize and develop the neighborhoods in University City and to meet the housing needs of all residents in the neighborhood."
The partnership is an integral component of Penn's broad-based effort to work with neighborhood groups, community organizations, and area institutions to stimulate neighborhood revitalization through public education initiatives, commercial and economic development investments, neighborhood-based services, and community housing programs.
"This is our opportunity to participate with the University of Pennsylvania, the Trammell Crow Company, Fannie Mae, and First Union National Bank in a joint partnership that will improve the quality of housing in the University City area," said Philip P. Gerbino, president of the University of the Sciences. "This is something that has been needed for a long time. We are happy that these institutions and organizations have come together to take the lead in this important effort."
A critical component of the rental partnership's success is high quality management services, which will be provided by the Trammell Crow Company, one of the nation's largest rental property managers, said Tom Lussenhop, managing director, Penn's Division of Real Estate.
"Trammell Crow Company takes great pride in playing an integral role in this strategic alliance with the University of Pennsylvania, Fannie Mae, University of the Sciences, and First Union National Bank," said J. McDonald Williams, chairman of the Trammell Crow Company. "This is an exciting opportunity for our organization to further expand our reach and commitment into the University City community in an effort to improve the quality of life and standard of living for the many people who call University City home."
First Union has made a commitment to provide the partnership with up to $30 million in mortgage financing, which is available to qualified investors.
"This mortgage financing epitomizes the type of community impact that First Union's Community Development Lending Group can make," said Jane Henderson, senior vice president and director of First Union's Community Development Group. "This partnership for quality housing is a prototype for future urban revitalization efforts throughout the First Union franchise."
Almanac, Vol. 47, No. 8, October 17, 2000