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August 9, 2023

“The Real Deal” reports on  EPG/ASFM partnership to purchase affordable housing in Dallas & Houston.

Elizabeth Property Group/ASFM-financed acquisition of six affordable housing buildings. “This was an opportunity to, at scale, address affordability or the preservation of affordability in several markets,”

Elizabeth Property Group’s Tisha Vaidya and the Woodglen Park Apartments at 6800 South Cockrell Hill Road in Dallas (LinkedIn, My Woodglen Park Apartments)

By Erick Pirayesh, The Real Deal, Published July 14, 2023 | 7:05 P.M.

Dallas-based Elizabeth Property Group made its biggest play yet with a 1,444-unit acquisition across six affordable housing properties in Texas. 

The entirely woman-owned firm that focuses solely on affordable housing acquisitions acquired the apartments in Houston, Dallas-Fort Worth, Beaumont, Huntsville, Bryan-College Station, and Wichita Falls, according to a media release. Elizabeth Property partnered with American South Fund Management, a mezzanine lender for real estate projects located in emerging low- and moderate-income neighborhoods, according to its website.

Financial details of the acquisition were not revealed. All units will continue to be affordable  through 2042 and 2043, the release stated. The developments are 94 percent occupied and located in low or moderate-income areas with an average poverty rate of 36 percent, according to the release. Renters income must be less than 60 percent of the area median income to qualify for affordable units.

The specific properties acquired are: Willow Green in Houston, Woodglen Park in Dallas, Pine Club in Beaumont, Ridgewood West in Huntsville, Saddlewood Club in Bryan and Tealwood place in Wichita. Elizabeth Property Group has plans for significant maintenance and renovation projects at each of the acquired properties.

“This was an opportunity to, at scale, address affordability or the preservation of affordability in several markets,” Tisha Vaidya, co-founder of Elizabeth Property Group, told The Real Deal. “We’ve been doing a bunch of transactions, mostly single property, in different markets. So this will really impact a lot more families than we’ve been able to before.”

Vaidya said the firm, which was founded in 2020, has a mission to increase and maintain affordable housing opportunities but investing in the sector does have benefits from a tenant and leasing perspective.

“It is a pretty sticky tenant base. You’re not going to see a lot of turnover that you would from a market rate deal,” Vaidya said. “If you can create an environment in a community where there is high quality housing, good services, good management and a good environment, people will stay for a really long time. I think that’s something that’s really unique and special about affordable housing.”

Each of the acquired property was developed and subsidized with the low-income tax credit which is a federal subsidy that finances low-income housing. It allows investors to claim tax credits on their federal income tax returns for building affordable housing. In recent years, allegations have surfaced of fraud and misuse of the low-income tax credits.

American South Fund Management has made 22 investments in Texas, Georgia, Florida, Alabama, North Carolina, South Carolina, Louisiana and Arkansas totaling $96 million. The company has invested in 5,000 units, with 80 percent considered affordable.

Dallas City Council approved a new affordable housing plan focused on mending racial disparity this April. The plan targets disinvested areas with poor infrastructure, inadequate affordable housing and communities affected by segregation calls for increased production of for-sale and for-rent housing designated for low- and middle-income residents. Though the new policy didn’t include any specific plan for attaining funds and had no budget or production goals included.

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