Avinity and Presbyterian Homes & Services (PHS) have announced plans for a joint venture to preserve and expand affordable senior housing. Avinity and PHS are both faith-based, non-profit providers of senior housing and services based in the Twin Cities. Effective June 1, 2019, PHS will acquire a 50% membership interest in Avinity.
Dan Lindh, CEO of PHS noted that, “Minnesota is experiencing a loss of affordable senior housing while the number of seniors needing this housing is growing rapidly. Avinity is a high quality provider with a strong track record and portfolio of affordable and moderate-rate senior housing. Our joint venture creates a scalable platform to preserve and expand affordable housing, which we believe is one of the greatest needs for Minnesota’s future.”
Avinity CEO Denyse Ethridge added, “We are pleased to report that our Avinity partnership has received a $200M commitment from a mission-minded private capital source to help finance and launch this initiative to make a difference in our communities.” She continued, “Our joint venture creates a significant opportunity to grow the mission and brand of Avinity while leveraging the common vision, values and management systems of PHS. We expect this affiliation will be seamless for current residents and Avinity employees who continue to be the hands and feet of our mission.”
Minnesota Housing Partnership reported in 2017 that 61% of senior renters in the Twin Cities are “cost-burdened” spending more than 30% of their income on housing. The same report projects that the region’s senior population will more than double with a growth rate of 123% over the next twenty years. At the same time, the Metropolitan Council has reported that the 7 county metro area experiences a net loss of around 1,300 units of naturally occurring affordable housing (NOAH) each year since 2010. Around 10% of new housing units are affordable, but this is less than the number of units that lose their affordability through sales and redevelopments.
Lindh explained, “Most new affordable housing relies on securing government support like HUD 202 financing and/or tax credits to make the construction budget work. However, as federal and local government housing budgets tighten, the difficulty of scraping up sparse credits while construction costs continue to rise makes this model almost impossible to scale.” He added, “Our aim through Avinity and our capital partners is to add 15,000 affordable senior apartments over the next 15 years through development and/or the purchase of existing properties to preserve their affordability. Achieving this outcome will likely meet only 10-15% of the emerging need. In addition to providing housing, we will also offer customizable health and wellness options, like those offered through our Optage® home and community services and Genevive primary care to meet the broader needs of older adults in their own homes.”