New York-based Fairstead has closed on the $16.5 million
acquisition of a 200-unit affordable housing property in Covington, Kentucky.
The company secured $26 million in tax exempt bonds and more
than $1.5 million in Low Income Housing Tax Credits from the Kentucky Housing
Association to preserve the units at Cambridge Square as affordable.
Fairstead said it will invest $12 million to renovate and
modernize the eight two-story buildings that make up the complex.
“The revitalization of Cambridge Square is a perfect example
of how public-private partnerships can help cities modernize and protect their
aging affordable housing assets,” said Bobby Byrd, Senior Vice President of
Acquisitions & Development at Fairstead.
“Fairstead believes everyone, regardless of income level,
deserves a great home and I want to thank the Kentucky Housing Corporation and
Mayor Joseph Meyer for sharing in this belief and helping to reimagine
Cambridge Square. Approaching affordable housing neighborhoods with a
community-first mindset ensures residents will have affordable housing that not
only meets their needs but enhances their overall quality-of-life.”
Originally built in 1979, Cambridge Square comprises 60
one-bedroom, 100 two-bedroom and 40 three-bedroom units all of which serve
low-income residents and families in the Covington area.
Fairstead plans to replace floors, bathrooms and lighting
fixtures in every apartment, and install new kitchen fixtures and appliances,
including microwaves. The plan also looks to address new windows, façade
improvements, and HVAC systems as well as new roofs and hot water heaters.
Improvements will also be made to the community room,
playground, and leasing office, along with overall design upgrades to enhance
the look and feel of the neighborhood.
Finally, the renovation plan includes adding a community
garden, dog park, and new picnic areas to further establish a sense of
community among residents.
“All families deserve to live in a place they’re proud to
call ‘home,’” said Covington Mayor, Joe Meyer. “We’re thrilled that Fairstead
is investing money and energy into updating the Cambridge Square complex in
Covington to elevate its status as an attractive, modern, safe, and affordable
community that contributes to the quality of life of our residents.”
The Low-Income Housing Tax Credit (LIHTC) subsidizes the
acquisition, construction, and rehabilitation of affordable rental housing for
low- and moderate-income tenants. It was enacted as part of the 1986 Tax Reform
Act and has supported the construction or rehabilitation of about 110,000
affordable rental units each year, over two million units in all since its
The federal government issues the tax credits to state and
territorial governments who then allocate them to private developers of
affordable rental housing projects. Developers generally sell the credits to
private investors to obtain funding. Once the housing project is placed in
service, investors can claim the LIHTC over a 10-year period.
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