Major investments by Wells Fargo, Invest Atlanta and the Annie E. Casey Foundation will allow more than 50 families, couples and individuals to occupy and own renovated former foreclosures in an area that received national attention for the impact of the housing crisis.
In a public-private-nonprofit partnership, the three entities are providing close to $2.5 million for the rehabilitation and resale of 53 homes in the Pittsburgh neighborhood near Turner Field, adjoining the Atlanta BeltLine.
Wells Fargo is investing $1 million, Invest Atlanta $700,000, and the Casey Foundation will provide $750,000 over three years.
“This is an important step forward in transforming Pittsburgh into a vibrant, thriving community for kids and families,” said Ryan Chao, vice president for civic sites and community change at the Casey Foundation, which initiated the project. “Much remains to be done, but our momentum is strong.”
The Pittsburgh area has been part of the Casey Foundation’s work in Atlanta for more than a decade. In 2001, Casey — started by the founder of Atlanta-based UPS — began working in five distressed neighborhoods near the stadium to increase opportunities for children and families living in those communities.
Three other recent steps signal the rebirth of the Pittsburgh area. With the support of Casey, the Pittsburgh Community Improvement Association is in the process of renovating and selling 33 homes. The Casey Foundation recently issued a request for proposals to redevelop a 31-acre parcel on University Avenue into job-generating facilities or an industrial or office park.
Finally, Casey has just received additional funds to redevelop the 53 homes from the federal HOME Investment Partnerships Program, provided through the Georgia Department of Community Affairs and the city of Atlanta.
To renovate and sell the homes, Casey has contracted with the REAL Group as developer. Developers Denis and Philippe Pellerin, the nonprofit SUMMECH, headed by Janis Ware, and realtor Masharn Wilson comprise REAL.
“Having more than 50 families, couples and singles move into these newly renovated, energy-efficient homes will create a critical mass of activity,” Denis Pellerin said. “This will attract more redevelopment and give people confidence that Pittsburgh can fulfill its potential as a thriving neighborhood.”
The work will be done in phases over three to five years. Work on the first homes has begun, with those expected to be on the market in late spring. The homes will be marketed to prospective homeowners with a variety of income levels at prices below the market rate to make them affordable.
The investments by Wells Fargo and Invest Atlanta will be used as a revolving fund, which means the money will be recycled as houses are sold, and the cumulative investment will greatly exceed the $2.5 million.
Wells Fargo’s investment is first of its kind in the Atlanta area
Wells Fargo’s $1 million is its first equity equivalent investment, known as an EQ2, in the Atlanta area. The investment carries a below-market interest rate of 2 percent and will be repaid over a number of years.
Wells Fargo’s Community Lending and Investment group makes EQ2s on a limited basis to nonprofit community development partners that are working to expand affordable housing, job creation, and economic development in the communities where the company does business.
“We call this patient capital,” said Atlanta senior community development officer Pamela Cross. “It’s especially attractive to us because of the proximity to the BeltLine, in which we are heavily involved. The Casey Foundation has done so much already. Our contribution is actually small considering the scope of this, but we know that by working together we can make a huge difference.”
Wells Fargo is also the only lender that has agreed to provide mortgages for the 33 homes being sold separately by the PCIA. To make these houses affordable, the association is using a community land trust model under which buyers pay only for the structure and the association retains the land.
Invest Atlanta’s capital jump-starts the first 12 homes
Invest Atlanta’s loan of $700,000 comes from its Housing Opportunity Bond program. Funds will be used on 12 of the 53 homes, with the money revolving to renovate additional homes as they are completed and sold. This effort supports several goals identified in the city of Atlanta’s housing strategy for neighborhoods like Pittsburgh. These include increasing home ownership within vulnerable communities, improving the quality of the existing housing stock, and removing blighted properties.