RHLS is wrapping up the legal work with Methodist Services to use the 4% Low-Income Housing Tax Credit (LIHTC) to rehabilitate and preserve the Monument Village apartments. Originally known as the Methodist Home for Children, Methodist Services was founded to care for children orphaned as a result of the Civil War. Today, it provides supportive services and housing to families and children.
Monument Village is located in the Wynnefield Heights neighborhood in Philadelphia. The apartment complex has 60 units of affordable rental housing, including 27 one-bedroom units, 8 two-bedroom units, 20 three-bedroom units, and 5 four-bedroom units across five buildings on the same plot. It is located within walking distance of the Methodist Services where the residents of the complex receive case management services, as well as access to childcare. The individuals and families in residence at Monument Village have all experienced homelessness.
RHLS assisted Methodist Services in the long-term preservation of not only affordable rental housing, but also the operating subsidy for the families that live there. RHLS is providing legal representation and technical assistance to facilitate the preservation of the housing, and to ensure long-term affordability and stability of the 60 units.
Methodist Services received support through the Neighborhood Assistance Program (NAP), a state-level tax credit program that encourages businesses to invest in projects which improve distressed areas. In this case, Methodist Services had support from Aetna Health Care Company on rehabilitation. Additionally, RHLS received funding through a NAP partnership with PNC Financial Services to support the legal services provided to Methodist Services.
For these types of tax credit developments, the original investor for the development will “exit” after the fifteen-year compliance period for affordability. At this point, the nonprofit needs assistance with the process of exiting by the limited partner and restructuring of the financing in order to make the necessary capital improvements. In the case of Methodist Services and Mission First Housing Development Corporation, they have chosen to pursue the project’s long-term affordability by accepting the exit of the current investor and restructuring and recapitalizing the project through the LIHTC.
The 4% credit is an efficient and flexible tool that provides half as much tax subsidy per dollar as the standard 9% housing tax credit that the building was initially developed with but is much is less competitive than the 9% credit. Applications for 4% LIHTC preservation projects are submitted to the Pennsylvania Housing Finance Agency (PHFA) on a rolling basis. RHLS has already assisted Methodist Services in obtaining approval for the 4% LIHTC preservation, but significant legal work remains to implement the preservation.
RHLS assisted Methodist Services as it, together with Mission First, raised an additional $3.5 million in financial support for this project, $2 million from the Affordable Housing Program funds from the Federal Home Loan Bank of New York, and $1.5 million from the City Of Philadelphia to renovate the existing apartment complex to improve its operation, efficiency, and quality of life for tenants.
Dina Schlossberg, Deputy Director and Senior Attorney for Multifamily Housing, and Joe Jampel, Staff Attorney, worked with Methodist Services to preserve the affordable housing at Monument Village.