N.J. nonprofit finds strength in partnering

The Moorestown nonprofit agency had a track record in the community. The development company had money, a large staff of professionals, and a construction partner.

So the two linked up to create a recently opened affordable-housing development off Evesham Township's Sharp Road, fringed by wetlands, trees, and a lake, with freshly trimmed lawns and children bicycling the streets. The $20 million development is the largest undertaken by the nonprofit, Moorestown Ecumenical Neighborhood Development Inc.

Forty years after MEND began its mission to provide affordable housing, the group is using the joint-venture model to heighten its ambitions.

Consider that the 104 units in the Evesham project, MEND's only completed joint venture, account for more than one-quarter of the total 365 units it manages for families, seniors, and disabled people. And the agency is teaming up again with its Evesham partner, Conifer Realty, for a senior development set to break ground soon in Medford, and consulting with the company in a smaller capacity for a low-income project in Deptford.

Such partnerships are not uncommon, but they represent what some hope is the future of affordable housing by offering a way to accomplish more than one entity could do on its own. That is particularly true in the souring economy, in which traditional funding sources are drying up.

"More and more affordable-housing projects are being built using this model. . . . As long as it seems to be successful, I think whether the credit market loosens or not, it's a way to get it done in a much more efficient manner," said Joseph V. Doria Jr., commissioner of the New Jersey Department of Community Affairs.

Joint ventures are being undertaken in communities from Camden to Cape May, guided by the reasoning that for-profit companies have better access to capital while nonprofits can leverage their ties to the community for such projects. More broadly, municipalities statewide are scrambling to comply with the latest round of regulations that call for building 115,000 units of affordable housing by 2018.

Matthew Reilly, president and chief executive officer of MEND, said Evesham had approached his organization about developing the project to meet its obligations under New Jersey's affordable-housing requirements.

"However, the financing and the development of affordable housing is getting more expensive and more complicated every day, and it's becoming increasingly difficult for nonprofit organizations to put the financing together for these projects," he said.

One problem is a softening market for low-income-housing tax credits administered through the New Jersey Housing and Mortgage Finance Agency using federal funds. The program is a major way of financing affordable units.

The agency awards tax credits on a competitive basis to affordable-housing developers to sell to private investors. That helps cover their project costs. But the price of tax credits is falling, and there are fewer investors. And as the program becomes more competitive, projects must be further along to participate, said Angela Goode, director of technical assistance and training at the Housing and Community Development Network of New Jersey.

MEND has nevertheless been successful in using the tax credits to finance the Evesham project and a 36-unit housing development for seniors in Medford, for which ground is to be broken in September.

"We have a stronger financial background; we have access to bank loans," said Charles Lewis, vice president of land development for Conifer, which specializes in affordable housing and owns and manages more than 9,000 apartment units in five states. "So I think if you take our financial strength and ability to get loans and outside capital and [MEND's] local contracts, that's a good combination."

The nonprofit agency was founded by nine churches in one of South Jersey's most affluent communities in 1969. It was six years before the New Jersey Supreme Court's landmark ruling - involving neighboring Mount Laurel - that towns were obligated to provide low- and moderate-income housing.

The organization solicited private donations to build its first apartment building on Beech Street in the 1970s. Since then it has drawn on a vast array of funding sources, including the tax-credit program, the Federal Home Loan Bank, Section 8 rent subsidies, and funds from the state's Council on Affordable Housing.

Today, Reilly oversees a staff of nine in the construction and rehabilitation of housing units. After developing hundreds of units in Moorestown, MEND completed a 10-unit development in riverfront Delanco in 2003. Evesham was its second project outside Moorestown; developments in Pemberton Borough and Southampton are in the pipeline.

The Evesham project sits on 48 acres, near the township's border with Mount Laurel and Moorestown. MEND is managing the buildings, which opened to occupants this year; rents range from about $350 to $850. Several roofs are outfitted with solar panels.

Brothers Mike and Dan Dugan, whose main income is government disability checks, are grateful for their two-bedroom apartment there after experiencing how difficult it was to find an affordable place to live in the South Jersey suburbs. A number of complexes had income restrictions, said Dan Dugan; others wouldn't accept the option of his other brother and sister-in-law cosigning.

The pair, in their 50s, were among the 2,000 people to apply for the Sharp Road apartments.

"This was like a blessing," Dan Dugan said.

Tamika Tokley, 42, moved from a three-bedroom rental home in Camden to a two-bedroom apartment at the Evesham complex with her 6-year-old granddaughter.

"Everything about it is just a step up," she said. "The relocation to Evesham, the fresh air you breathe in - it's just a different environment from the city to a suburb."