On Tuesday, April 13, the Fairfax County Board of Supervisors authorized the issuance of tax-exempt multifamily housing revenue bonds by the Fairfax County Redevelopment and Housing Authority (FCRHA) in an amount not to exceed $20 million to help finance the development of 120 senior independent living apartments. The units, part of the One University development in the Braddock District, will benefit older adults aged 62 and up whose combined household income is no more than 60 percent of the Area Median Income (AMI).
“Tax-Exempt Revenue Bonds” A debt investment in which bond holders/purchasers (private individuals, commercial banks, etc.) loan money to the FCRHA for a specified purpose. Revenue bonds are supported by the revenue generated from the property. The bonds are “tax-exempt” because they are not subject to federal, and in some cases, state and local income taxes. These bonds are different from the “General Obligation” bonds issued by the County which require approval of voters through a ballot referendum.
“With this action, this Board is maintaining an unprecedented pace in advancing affordable housing opportunities to support our vulnerable neighbors,” said Board of Supervisors Chairman Jeff McKay.
“The project at One University demonstrates our commitment to innovative design and creative financing to provide housing options for seniors, families, and students in the heart of Fairfax County,” added Braddock District Supervisor James Walkinshaw.
The One University development refers to a 10-acre property located adjacent to the campus of George Mason University in Fairfax. The property is owned by the FCRHA and currently includes 46 affordable townhomes and office space for the FCRHA. The proposed development – effected under the Public-Private Education Facilities and Infrastructure Act of 2002 – will quintuple the number of affordable homes available on the site for households with incomes at 60 percent of AMI. The development will include 120 units of senior independent living as well as 120 multifamily units.
“The FCRHA is committed to using all resources at our disposal to ensure that our most vulnerable neighbors have access to the dignity, security, and stability that comes when they are able to live in a home that they can afford,” said FCRHA Chairman Melissa McKenna. “With the investment of public land, local housing dollars, and the issuance of these revenue bonds, One University is another excellent example of our use of a healthy mix of local resources to move these developments from concept to reality in areas of opportunity all throughout Fairfax County.”
The One University project is expected to close on financing in the Summer of 2021.
Revenue Bonds and Affordable Housing
Tax-exempt bond financing has long been a valuable financing mechanism to support the acquisition, new construction and/or rehabilitation of affordable housing developments by helping developers obtain below-market interest rate mortgages. FCRHA revenue bonds have been successfully used in a number of recent affordable housing endeavors, including:
The Ovation at Arrowbrook (274 units multifamily rental housing with a range of affordability from 30 to 60 percent AMI)
The renovation of the Murraygate Apartments (200 units of multifamily rental housing all available to households earning 60 percent AMI or less)
The Residences at Government Center (270 units of multifamily rental housing affordable to households earning 60 percent AMI or less)