| Bridge Housing Corp. recently partnered with the City of Milpitas to build the 306-unit apartment complex called Montevista. More than half the units were rented to people with incomes less than 60% of the median area income.
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Bridge Housing Corp., the San Francisco based non-profit home builder, was recently selected by the California Pension Fund (CalPERS), to manage $100 million in cash earmarked by the fund for urban infill development in Northern California.
With home prices in the Golden State rising beyond the reach of the incomes of many potential home buyers, the deal is a tangible result of an ongoing, high-profile campaign being waged by state and local officials looking for ways to stem a severe shortage of affordable housing. It also signals a high degree of confidence by CalPERS in Bridge to continue its success in putting together the partnerships that annually add about 1000 affordable shelter units to the state.
"These investments hold potential to deliver superior returns for our Fund and its members while fueling the growth of jobs, businesses and better communities in our state," says William D. Crist, president of CalPERS Board of Administration. He noted that the $100 million partnership is part of larger CalPERS commitment to increase its investment in the state of California by $1.1 billion, primarily in new real estate and private equity investments.
Equity positions from pension funds are rare in the world of non-profit home building and are virtually unheard of at this level of commitment, says Bridge CEO Carol Galante. Bridge and CalPERS have partnered on a number of projects dating back to 1995. In those cases, CalPERS provided various loan packages, not equity investment, she notes.
"We are proud of our relationship with CalPERS," notes Galante. "Together we have demonstrated that pension funds can make market returns while investing in affordable housing. So the timing is perfect to take that commitment and experience and extend it to the Urban Infill Program."
Galante says Bridge''s strategy for using the funds will focus on providing "early stage, phase capital" for the development of affordable housing along with mixed-income and mixed-use developments, particularly in areas that the current economic boom has left behind. Founded in 1983, Bridge has completed developments in more than 40 California communities.
A positive upshot for for-sale builders who operate in Northern California is an open invitation by Bridge to find ways to partner on new projects that require an element of below market rate housing.
"From my perspective, we are very interested in getting (for-sale) builders interested in participating with us," notes Galante. "If they are thinking of a project or have some land in an urban infill location, it would be very interesting to work with them."
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