The Housing Partnership Equity Trust (HPET) is a social venture REIT that owns and operates multifamily buildings in partnership with 12 of the Network's high-performing housing operators/members. It is the latest social venture start-up incubated by HPN, with initial capitalization of $100 million from the MacArthur Foundation, the Ford Foundation, Prudential Life Insurance and Citibank.
HPET provides a ready source of long-term equity investment that will enable its 12 members to quickly and efficiently acquire and operate a portfolio of market- affordable apartment units across the country and preserve them as affordable and workforce housing.
HPET has streamlined the capital-raising process by which affordable housing units are acquired by nonprofits, reducing transaction costs as well as the time it takes to close on a transaction. This cost reduction is intended to translate directly into lower rents as well as additional cash flow that can be distributed to investors.
HPET represents a fundamental shift in both the way housing preservation is financed and in the way nonprofit real estate operators build their balance sheet and their capacity to expand their mission.
Typically, preservation transactions are financed through project-specific subsidies and investments from a wide range of tax incentives and subsidy programs. While this approach maintains a strong focus on the performance of individual properties, it makes it difficult to efficiently manage operations, raise capital, and fuel growth and innovation.
Properties acquired through HPET will not rely on property-level subsidies; nonprofit operators will have the ability to build cash and liquidity through efficient operations, better aligning incentives and allowing nonprofits to increase their capacity and provide an alternative investment channel to social-impact investors.
Acquisitions funded by HPET will target properties with access to public transportation and other community amenities. Capital improvements will be made to lower operating costs and utility expenses.
The 12 non-profit members of the HPET include: AHC Housing, Inc.; BRIDGE Housing Corporation; Chicanos Por La Causa; Community Preservation and Development Corporation; Eden Housing; Hispanic Housing Development Corporation; Homes for America, Inc.; LINC Housing Corporation; Mercy Housing; Nevada HAND, Inc.; NHP Foundation; NHT/Enterprise Preservation Corporation.