April Housing’s Alice Carr and Perica Bell On Scaling Affordable Housing
The heads of the Blackstone-backed company use resyndication and other tools to create and preserve homes nationwide
BY CATHY CUNNINGHAM SEPTEMBER 3, 2024
It’s been an active summer for many in the commercial real estate industry, and April Housing is certainly no exception.
The Blackstone (BX) portfolio company announced it had completed resyndications at four of its Texas communities last month, preserving the affordability of those communities’ 898 units for at least another 30 years.
The transaction is just the latest move in April Housing’s broader strategy to preserve affordability across its entire 70,000-unit portfolio. The Los Angeles-based company is only two and a half years old, launching in February 2022 with the goal of expanding Blackstone’s efforts in creating and preserving affordable housing — and it’s already making significant strides forward in furthering those goals.
“Blackstone and April Housing have made a very public commitment to preserving affordability in this important housing portfolio that we own,” Alice Carr, CEO of April Housing, told Commercial Observer. “Both Perica [Bell, April Housing’s head of preservation] and I are long-term participants in the affordable housing industry. It’s something we both feel really passionate about, and so to be at the helm of a company that is really focused on affordable housing and preserving affordable housing is just so important for both of us. We just closed those four deals in Texas, but we are really just getting started.”
Carr describes the speed at which the April Housing platform was built, and the strength of its capability to both deliver and preserve units at the rate it has been doing, as “unprecedented.”
“We’re excited about what we’ve built, but we’re even more excited about what’s coming next, and the future of our program,” she said.
Texas hold ’em
The term “resyndication” essentially means the allocation of further low-income housing tax credits. In the case of the four Texas deals, it’s tax-exempt bond financing that’s made possible through multiple stakeholders, such as the federal government and local and state agencies.
“You’re basically taking all of these developments that were financed with low-income housing tax credits back through the program,” Bell said. “That way, you’re preserving the affordability and also able to make additional meaningful investments into the properties on behalf of the residents. But by that design, every resyndication involves multiple stakeholders, including the residents.”
Residents’ input and approval is key, because while the resyndications preserve affordability at communities, they also allow for substantial improvements to take place — from complete unit renovations to roof replacements, facade repairs and new green spaces — meaning residents typically have to move out for a couple of weeks.
As part of April Housing’s Texas transactions, residents will be temporarily placed into alternative housing convenient to where they work or where their children go to school, and placed back within one or two weeks of their newly renovated unit being completed.
An important part of Bell’s role is the legwork that she and her team do with residents before closing on these deals that make headlines via, for example, town hall meetings. There, the April Housing team meets with residents to address their concerns, go over what the plan is, and convey that April Housing has a full understanding of their needs during the renovations.
“Resyndication is the most prolific way to preserve affordable housing,” Carr said. “It’s the most prolific way that you can achieve two goals that are intertwined. You’re able to extend and preserve affordability, and there’s the preservation of the physical asset.”
Looking at April Housing’s overall portfolio, with 400 communities across the country that were built with low-income housing tax credits, there are restrictions in place to keep the rents affordable, but those restrictions expire. Bell and her team perform in-depth analyses around exactly when those restrictions will expire, and then pair those communities with the available preservation tools and various ways to renovate the properties and extend their affordability — but all this is achieved “under a ticking clock,” Carr said.
Thankfully, they’re not alone in understanding how critical the task of preservation is, because companies like April Housing are addressing a stubborn dearth in the country.
“The demand far exceeds the supply,” Carr said. “So, while that’s good for an owner or an operator of a large portfolio, I think both Perica and I would agree that finding ways to continue to chip away at the affordable housing crisis is on both of our minds. We participate in various advocacy groups, and we’re both very involved in industry conversations around what tools are available and how to advocate for more tools.”
Out of the advocacy and the conversations come ideas.
“We’re talking to multiple people and entities about what we want to do and what we want to accomplish, and what we found is that people are interested in preservation,” Bell said. “People understand that preservation is a part of the broad spectrum of providing affordable housing for everyone. [The U.S.] hasn’t been keeping up with supply overall, and so preservation is one of the most efficient ways as well to protect the overall supply. Many of our stakeholders jump on that fact, and onto what we want to do in terms of scaling this and making this a really large impact nationally.”
High stakes
Carr has been with the company since the beginning. Before joining April Housing, she was the head of community development banking at J.P. Morgan Chase, and, before that, she was a managing director at Citi Community Capital. She started her career at Low Income Investment Fund, a nonprofit community development financial institution focused on affordable housing and small business lending.
“As someone who’s been in affordable housing my entire career, I was very excited to join forces with Blackstone to create this extraordinary company that owns 70,000 units of housing across the country, and to make a bold commitment to preserving the affordability at those units,” Carr said of her pull to April Housing in 2022, adding that she was also intrigued by the chance to switch roles in the affordable housing realm. “I had worked in banking and I understood finance around affordable housing, but this was an opportunity to come in and work with Blackstone to create a best-in-class owner and operator of affordable housing.”
The company has spent a lot of time and energy accomplishing that accolade, from building out its technology to consolidating its property managers to expanding the April Housing team. In fact, it’s hired 70 people in the last two years alone, bringing its headcount to 100.
“What excites me the most is being laser-focused on being that best-in-class owner and operator for the residents — who are really at the heart of what we do — and our commitment to preservation,” Carr said. “Secondarily, our amazing industry-leading commitment that we were able to make with the support of Blackstone, which I think is the largest commitment to affordability made to date, is really exciting.
“We will continue to ramp and scale,” she added. “We’ve already invested up to over $100 million in new construction of affordable housing, and will continue to grow our portfolio. It’s such an exciting company to be part of, because the sky’s the limit and we have such a commitment from this incredibly strong and committed shareholder.”
For Bell, who joined from MUFG Union Bank, where she led LIHTC debt and equity originations, Blackstone’s “big public commitment,” and how early it demonstrated it with respect to preserving affordability, carried a lot of weight in her decision to join April Housing.
“For me, the prospect of being able to do this work that I do at scale within affordable housing was key,” she said. “I think in order to solve the affordability challenge and the housing availability challenge, to the extent that you can do it at scale, is where you’re going to have the largest impact — that’s really what intrigued me and it’s what gets me out of bed every morning today.”
Bell and Carr say the true reward comes down to the experience of residents.
“It’s not just about preserving the affordability for tens of thousands of people across the country, but also improving the property conditions for the people living in our homes. It’s really a dream job to be able to do that at scale,” Carr said. “There’s so many challenges in it, it’s difficult work. It’s commercial real estate, but with lots of bells and whistles attached. Sometimes that’s fun, sometimes that’s just plain challenging, but it’s so rewarding.”
Federal Reserve Chair Jerome Powell indicated an interest rate cut was on the way in late September, and — just like for the rest of the industry— that’s good news for April Housing.
“We are obviously very focused on what’s going on with interest rates,” Carr said. “It affects our business as we’re always looking for new investments for our company, and interest rates affect how we invest. The capital markets play a role in our growth opportunities, so we’re carefully watching what happens.”
April Housing has the resyndication of these four Texas developments under its belt and is on track to close an additional six more. “We’re headed towards 10 deals in the inaugural year here of our real estate syndication platform,” Bell said. “It’s amazing, and we look forward to a very robust and busy end to 2024.”
Part of that busy end, and beyond, will come via other tools and avenues, too.
“We have a large portfolio that’s aging, and has preservation needs,” Carr said. “So, in some ways, we have a built-in pipeline for ourselves for the foreseeable future. We definitely have our hands full, and we’re excited about that. Where resyndication isn’t a tool that works, we’ll be looking for other preservation opportunities to partner with state agencies, local investors, whoever is interested in preservation. We’re committed, and we also have Blackstone’s commitment.”
