First Development Under N.Y.’s Medicaid Redesign Program Nears Completion
Affordable Housing Finance
By Donna Kimura
Creston Avenue Residence draws a link between housing and health care.
The New York development is the first housing project financed under the state’s Medicaid Redesign Team (MRT) Housing Capital Program. Under this innovative program, savings from the state’s Medicaid program is being used to help finance supportive housing.
State officials say that stable housing with strong social services is one of the most important determinants in long-term recovery and sobriety. Housing can also reduce expensive trips to the emergency room and hospitalizations. As a result, the MRT program aims to improve services while cutting Medicaid costs.
For developers, the program is an exciting new funding stream that comes from outside the traditional housing programs.
Scheduled to open in September, the Creston is a $24.1 million project in the Bronx. MRT funds are covering a little more than 10 percent of the development costs.
“Without the gap financing, which amounted to about $2.6 million, there would be no way that we could have made this happen,” says Robert Sanborn, founder and partner of The Housing Collaborative, the New York-based developer behind Creston. Earlier in his career, he was the founding executive director of A Community of Friends, an affordable housing developer in Los Angeles.
He calls MRT a grassroots effort. “The innovation, the ideas came from the advocates,” says Sanborn. “The policymakers embraced it and saw the value of it because it was articulated properly.”
The firm is at work on another project, the 82-unit Webster Green, also in the Bronx. There, the MRT program will finance about 21 percent of the project’s developments costs.
Other developers are working on several other MRT-funded housing developments.
First, all eyes will be on the 66-unit Creston. About one-third of the apartments will be supportive housing for high-need Medicaid users while two-thirds will be affordable housing.
The project is being developed in partnership with Volunteers of America-Greater New York, which will coordinate resident services at the development.
The 10-story development is also notable for its design.
At other developments, the supportive housing units are often grouped together on one or two floors. At Creston, the supportive housing apartments are integrated with the other affordable apartments. There is a mix of studio, one-, and two-bedroom apartments.
“We’re also trying to do a sustainable building on all fronts,” says Fernando Villa, project architect and associate principal at Magnusson Architecture and Planning.
His design maximizes sun exposure, and all the apartments have large windows. This is particularly important when working with studios and smaller apartments, he says.
In addition, a photovoltaic solar system is expected to reduce common area electric costs by nearly 90 percent. Creston also features a rainwater harvesting system for irrigation and a rainwater containment system to manage flow back into the public system. The system complies with the city’s new Department of Environmental Protection codes. The team is aiming for LEED Platinum certification.
In addition to the MRT funds, Creston is financed with low-income housing tax credits (LIHTCs) and tax-exempt bonds. Red Stone Equity Partners provided about $12 million in LIHTC equity, which is about 50 percent of the project’s development costs. Bonds from the New York State Housing Finance Agency provided about $11 million in construction financing and $2.7 million in permanent financing. In addition, $4.6 million in financing came from a Homeless Housing Assistance Program grant from the New York State Office of Temporary and Disability Assistance.
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