Hewitt Place - How We Did It
The Nuts and Bolts
Hewitt Place was originally developed in 1992 using federal Low Income Housing Tax Credits (LIHTCs). LIHTCs provide a dollar for dollar reduction in tax liability to their buyer, who typically pays less than a dollar for each credit. This creates an incentive for investors to buy LIHTCs from affordable housing developers and generates equity for affordable housing projects. There is a 15-year compliance period for LIHTC projects, during which the investor must remain in the deal and the project must satisfy income and rent restriction requirements. Learn more about LIHTCs and how they work.

In 2007, Hewitt Place reached "Year 15" and the tax credit investor wanted to exit the partnership. IHI wanted to preserve the housing, which could easily have been converted to market rate apartments or condominiums. IHI negotiated to acquire the property for an advantageous price and applied for a new allocation of LIHTCs. The State awarded IHI the credits, but with the economic downturn in 2009 there was very little appetite for tax credits (most investors were booking losses and had no need for a credit to offset tax liability). IHI's investor pulled out of the project and we could not find a new one. Affordable housing projects all over the county were experiencing the same difficulties. To address this problem, the US Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA), creating two programs designed to fill gaps created by the loss of investors. The Section 1602 Exchange Program allows states to return LIHTCs to the US Treasury in exchange for .85/credit, which can be awarded as grants to stalled projects.

IHI returned our LIHTCs to the State and requested $2,734,664 of Exchange Funds for Hewitt Place. We also applied to the City of Portland for CDBG-R funds (another ARRA funding stream) and were awarded $686,494. With new funding sources in place, IHI was finally able to start the project in February 2010. We moved 44 families into hotels (and all of their belongings into storage pods) for one week at a time while we completed the interior work, which included all new flooring. The contractors hummed along, working on four townhomes per week, and completed the interior and exterior work in just under four months.

Housing development is a great economic stimulator! Although the entire project only took four months to complete, the rehab of Hewitt Place employed 99 people.

Reduce, reuse, recycle: In addition to installing Energy Star appliances and lighting fixtures, reducing our water usage by replacing grass with native plants, and using a "smart" irrigation system, we donated all of the old appliances, windows, sliding doors, sinks and faucets to be refurbished and resold. Recycling these items means they did not end up in a landfill.

What was Innovative?
We took a three-bedroom apartment and converted it into a one-bedroom apartment upstairs with community space below. Indoor community space means IHI's Resident Services staff now have a kitchen and can offer workshops, classes, youth activities, and other programs year-round - previously we were limited to summer programming in a tent near the manager's office.