Jonathan Rose Companies said it entered a deal with Citigroup to launch a $75 million affordable housing fund — the largest in the history of the development firm — which will focus on redeveloping and building new properties in New Jersey, Connecticut and Washington D.C.
Jonathan Rose, president of the Manhattan-based firm, said his firm plans to redevelop existing multi-family rentals or build new green housing from the ground up.
Citigroup has an existing affordable housing partner with a rival developer in New York, but has been looking at expanding investments in these communities under the federal Community Reinvestment Act, which encourages banks to expand credit into low-income communities when they open new bank branches or merge with other banks.
Rose told The Real Deal that despite the economy showing signs of a rebound, there is a “tremendous demand“ for affordable housing in these markets, which continue to have high unemployment levels.
The developer is targeting projects needing $25 million to $50 million in capitalization, with a particular emphasis on Section 8 projects or projects that might be about to exit existing affordable housing programs.
Citi Community Capital, the community development financing arm of Citigroup, has invested about $9.4 billion in local communities across the country, resulting in the creation and renovation of 57,000 affordable housing units.
Citi has worked with Rose in the past, as a lender and investor at the YMCA Residences for Women, in White Plains, which offers 193 units of affordable housing for single and low-income women.
Rose said his firm is in talks on several potential projects in Connecticut, where his firm has an existing office, and is in talks on potential sites in New Jersey. Rose is working on the master plan for the city of Newark.