RHLS served as counsel to the City of Bridges Community Land Trust, a nonprofit community land trust focused on creating and preserving permanently affordable housing in the Pittsburgh region, in a federal New Markets Tax Credit (NMTC) transaction that closed at the end of January. City of Bridges received an $8 million allocation from the program that will allow them to develop 15 homes in rapidly gentrifying neighborhoods in Pittsburgh including Hazelwood, Garfield, Fineview, Polish Hill, Troy Hill, and Lawrenceville.
The work will include ten new construction homes as well as five homes that will be rehabilitated over the next seven years. All of the homes will be sold to homeowners below 80% Area Median Income (AMI) and will remain permanently affordable through the Community Land Trust (CLT) model. Affordable homes are badly needed in all the neighborhoods – in one of the neighborhoods, Garfield, the median single-family home price has more than doubled since 2020!
The NMTC program has some similarities to the Low Income Housing Tax Credit (LIHTC), in that an investor receives the tax credits in exchange for investment in the project, but many differences, too. NMTCs can be used to support a broad range of development initiatives – using NMTCs for affordable housing is rather unusual! A national consultant, Smith NMTC, who specializes in using NMTC for affordable housing helped to shape this deal and shepherd it through closing.
This transaction was very complicated; it included multiple lenders and other parties to the transaction, and numerous legal entities connected to the various parties. As local counsel, RHLS Associate Staff Attorney, Kelly Propkop reviewed, commented, and provided legal opinions on the enforceability of all loan documents, participated in weekly calls, and provided Pennsylvania-specific legal advice on the transaction.
City of Bridges received support from PHFA, the lending partners at Dollar Bank, the tax credit investor U.S. Bank, and philanthropic partners Hillman Foundation and Heinz Endowments.