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Wednesday, July 30, 2014

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Cascade: No. 54, Spring 2004

MEND Pursues Transit-Oriented Housing Development Strategy

Prior to joining MEND in November 2001, Matthew A. Reilly was senior vice president of community development finance at First Union National Bank (now Wachovia Bank). Before entering banking in 1986, he served as director of real estate development for New Community Corporation in Newark, NJ.

MEND, an experienced nonprofit housing developer in Burlington County, NJ, since 1969, has started to develop housing near stations on the light-rail line that runs from Trenton to Camden.

MEND has developed 320 rental units and five for-sale units for low- and moderate-income residents of Burlington County since it was launched by several Moorestown, NJ, churches. Today it manages 251 rental units. MEND has a staff of 10 in project development, property management, maintenance, and finance, and a 2004 budget of $2.3 million. Five of MEND's 15 board members are residents of MEND-owned apartments.

For 35 years, MEND pursued an "in-fill" housing-development strategy. (In-fill refers to development on small, underutilized land parcels in developed neighborhoods.) Its apartment developments average nine units and often involve the adaptive re-use of existing structures, such as a public grammar school, a firehouse, or a police station. MEND wants its housing to be sensibly located and appropriately scaled; in other words, the housing should blend in, architecturally and functionally, with the surrounding community.

In the summer of 2002, a student intern provided through the New Jersey Department of Community Affairs' housing scholars program (funded by Wachovia Bank) began research on potential affordable- housing development opportunities along the new light-rail line. Transit-oriented development seemed to make a lot of sense for MEND's clients. Some of the older New Jersey towns along the Delaware River appeared to present excellent opportunities for new housing in the vicinity of the light-rail stations, and organizations such as the Delaware Valley Regional Planning Commission were promoting transit-oriented, high-density, mixed-use development around the stations. MEND thought these opportunities would mesh very well with its in-fill approach to affordable-housing development. As a result of its research, MEND identified the towns of Delanco and Riverside as good candidates for housing development.

In January 2003, MEND acquired 10 units of affordable rental housing in Delanco on Burlington Avenue, the town's main thoroughfare. The development is a combination of new construction and the adaptive re-use of a former mixed-use commercial building. The site is located within half a mile of new light-rail stations in both Delanco and Riverside. The apartments have been 100 percent occupied since the day MEND took title to the property. Financing for the $1 million project was provided by a local developer in connection with Delanco's affordable housing obligations under New Jersey's Council on Affordable Housing (COAH). Other financing sources were Burlington County and Commerce Bank, N.A.

MEND will break ground in the spring of 2004 for five new for-sale units, also in Delanco. One of these houses will be across the street from the rental-housing development that MEND acquired in January 2003. The other four units are being built along Rancocas Creek, which separates Delanco and Riverside. These houses will be a short walk-just one-third of a mile-from the Riverside light-rail station. These new houses will have three bedrooms and a basement. Estimated sale prices will range from $72,000 to $98,000 and the houses will be affordable to families earning between 45 percent and 60 percent of area median income. Project financing and sale price write-downs will be provided by COAH-related contributions from a large national developer and Burlington County. A local bank is also expected to provide some interim construction financing for the project, which will have a total cost of approximately $750,000.

MEND firmly believes that transit-oriented affordable-housing development is the smart way to go. There will be many opportunities for this kind of development in Burlington County in the years to come.

For information, contact Matt Reilly at (856) 722-7070, ext. 12, or mreilly_mend@hotmail.com; www.mendinc.org.