Freddie Mac White Paper Examines Residential Economic Diversity in High Opportunity Areas

Investments in California, Maryland and Minnesota Boost Economic Diversity Where Quality of Life and Rents are High

MCLEAN, Va., Dec. 13, 2019 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released a  white paper with three case studies examining markets identified as high opportunity areas by state governments, and how these markets foster opportunity for residents by providing access to education, jobs, health care, and transportation. Freddie Mac’s research analyzes properties in San Francisco, Baltimore and Minnesota’s Twin Cities markets, and explores replicable financing approaches used by these properties that can be leveraged in other markets to create and preserve affordable housing across the country.

“States have a significant degree of discretion in how they allocate Low-Income Housing Tax Credits (LIHTC) based on their Qualified Allocation Plans (QAPs),” said Steve Guggenmos, vice president of Multifamily Research and Modeling at Freddie Mac. “Through these QAPs, states define areas they view as high opportunity. Our research examines the different ways in which three distinct markets foster opportunity for residents in high opportunity areas, where creating or preserving affordable housing can be especially challenging.”

2698 California Street Apartments in San Francisco
In San Francisco, the job growth has far outpaced the creation of new housing with 8.5 new jobs created for every new housing unit. The dwindling supply of available housing and inability to create new housing fast enough makes preserving the current supply of affordable housing even more important. The 2698 California Street Apartments complex is located in the state-designated high opportunity area of Pacific Heights, which provides residents with access to high educational and economic opportunities where affordable housing is in short supply. By leveraging a 4% LIHTC, a local subsidy, and debt from Bank of America and Freddie Mac, the property was able to undergo a Rental Assistance Demonstration (RAD) conversion. The RAD conversion of the entire San Francisco public housing portfolio is a model that can be replicated in other cities as they embark on their own large-scale RAD conversions.