Renovated Cedar Street Apartments Provide Affordable Housing in Washington, D.C.

Renovated Cedar Street Apartments Provide Affordable Housing in Washington, D.C.

Located in the historic Takoma neighborhood of Washington, D.C., Cedar Street Apartments faced extensive damage from a microburst storm in 2016 that destroyed the roof in the middle portion of the building and led some tenants to move offsite. The landlord at the time installed a new roof, but rather than renovating damaged units, the landlord placed the building up for sale. Under the District of Columbia's Tenant Opportunity to Purchase Act (TOPA), administered by the city's Department of Housing and Community Development (DHCD), tenants have the right of first refusal to purchase their building if it is for sale. TOPA ensures neighborhood stabilization, safeguards against displacement, and helps tenants achieve homeownership. In 2017, existing tenants at Cedar Street Apartments organized to form the Cedar Street Tenants Association (CSTA). Under TOPA, CSTA transferred its rights to purchase to Joseph Development Inc. (JDI), which acquired the property in 2018. JDI partnered with nonprofit affordable housing developer Wesley Housing, which is the long-term owner, manager, and social services provider for the property. JDI completed the renovation in December 2021 and held the grand opening and ribbon-cutting ceremony in March 2022.

Tenant-Centered Development Process

In 2017, CSTA began interviewing several developers to assess options and identify a developer to renovate the building that would be most compatible with the objectives of the residents. After numerous meetings, the tenants chose JDI because of its commitment to maintain the building's affordability, guarantee all residents the right to stay or return to the building, and raise enough capital to comprehensively renovate the property. Gerry Joseph, president of JDI, explained that his firm's experience of collaborating with tenant associations under TOPA as well as work experience with a nonprofit community preservation development corporation cemented the tenants' decision to select JDI. As Joseph explained, the tenants "had lots of options and, to their credit, they ended up selecting us and our plan, [which] involved maximizing the affordability of the building over the long term."

When JDI acquired the property in 2018, nearly two-thirds of the units were vacant, with storm damage leaving some units in poor condition and others completely uninhabitable. Some tenants had already moved out before JDI acquired the property, whereas others chose to move out just before renovations began. JDI and CSTA reached an agreement to issue a $15,000 dislocation payment to each tenant who decided to move permanently offsite. At the time JDI presented the dislocation offer, more than a year had already passed, and many residents had already resettled elsewhere and opted not to return.

JDI began the renovations in the wing of the building that was initially vacated because of storm damage and relocated existing tenants into those units once they were complete. Although some tenants chose to remain in their relocation unit, others stayed only temporarily until their original unit was renovated. No tenants who wanted to remain at Cedar Street during the renovations had to move offsite, Joseph explained. Cedar Street Apartments currently is fully leased. The development is attracting more families with children, because the renovated building has more family units than its original layout did.

Affordable Apartments in a Neighborhood of Opportunity

Cedar Street Apartments offers 30 apartments consisting of 1 three-bedroom, 15 two-bedroom, and 14 one-bedroom units. Three units were designated as permanent supportive housing for residents earning at or below 30 percent of the area median income (AMI). A total of 22 units are affordable to tenants earning at or below 60 percent of AMI, and 5 units are affordable to original tenants earning between 60 and 80 percent of AMI. Under an agreement with the city, whenever tenants move out of these 5 units, Wesley Housing will lease the units to tenants earning at or below 60 percent of AMI.

The renovated units and common spaces offer residents several amenities. The units come with new ENERGY STAR^® kitchen appliances, fixtures, and finishes as well as in-unit controls for heating and air conditioning. Heat and hot water are included in the rent. The project also includes some green features, such as solar panels and energy-efficient lighting, appliances, and air conditioning. The building has a new parking lot, communal laundry room, fire alarm system, and secure access. Some units offer screened-in porches, and residents can also access onsite bicycle storage. The community room serves as a meeting place for CSTA as well as informal tenant gatherings.

The building is within walking distance of several neighborhood amenities, including the Takoma Metro Station. Recreation centers, community centers, a public library, schools, restaurants, and retail are also nearby. Wesley Housing has an onsite resident services coordinator who helps tenants navigate the job market and find resources to pay their rent. In addition, Wesley Housing offers year-round programs for residents who need education and health and wellness resources. Residents with special needs also can access case management and supportive services, and additional services are planned, said Joseph.

Financing Development

The $14 million project received funding from several sources, including the city, federal low-income housing tax credits, federal historic tax credits, and a private bank loan. In fall 2018, JDI applied for funding from DHCD's Affordable Housing Preservation Fund (managed by the city's Local Initiatives Support Corporation), which provides short-term loans to finance the predevelopment and acquisition of multifamily properties consisting of more than five units in which half of the households earn no more than $77,600 for a four-person household. Cedar Street Apartments became the first project financed using the preservation fund, with JDI receiving $4.5 million to acquire the building. "We were fortunate and appreciative that the city really stepped up and provided the resources that were needed to make it happen," said Joseph. Cedar Street Apartments also received an award of approximately $434,000 in 9 percent low-income housing tax credits, which helped raise about $4.3 million in equity. The property's location in a designated historic district made it eligible to receive a $1.25 million award in federal historic rehabilitation tax credit equity. Bank of America was both the construction and permanent lender as well as the equity investor for the project.

Preserving Affordability

The success of Cedar Street Apartments can be traced to successful partnerships among the tenants, JDI, Wesley Housing, and the city. Under TOPA, the tenants could have selected a cash-out option from a developer wanting to convert the apartments to condominiums or market-rate housing. Instead, said Joseph, the tenants "sacrificed what could have been a financial gain for a goal of preserving the housing as affordable." This project demonstrates the power that tenants can have in ensuring access to affordable housing in their community. Not only did the tenants organize to form CSTA, but they also were highly selective in choosing a developer that would address their concerns about overdue maintenance and preserving affordability. Transforming the neglected building required strong tenant organizing as well as city resources to bring the project to fruition. Tenants identified the need to preserve affordable housing in a high-opportunity neighborhood, which will ensure that existing and future low-income residents at Cedar Street Apartments can access community amenities and services.