L&M, Citi team up for $150M affordable housing fund

June 04, 2013 09:00AM

A joint venture between L&M Development Partners and Citi Community Capital has created a $150 million fund for affordable housing projects that will buy and renovate buildings for low-and-middle-income residents without government support, the Wall Street Journal reported.

The fund is a departure from how developers normally take on affordable housing, an area traditionally bolstered by government loans and tax breaks.

“We’re not spending a lot of taxpayer capital,” Ron Moelis, chief executive of L&M Development Partners, told the Journal, adding that government wouldn’t be “intervening in a heavy-handed way.”

The strategy could be risky, as L&M is eyeing distressed or at-risk buildings and investing heavily in renovating them, but Moelis said it would be akin to the socially conscious investment seen in other industries.The fund, known as NYAH II, has closed on its first purchase, a Washington Heights project on Pinehurst Avenue, and has several more in the works.

NYAH II preceded by a 2010 affordable housing joint venture between Citi Community and L&M which bought more than 4,7000 housing units in the New York area, including Ocean Village, a $140 million, 1,093-unit complex in the Rockaways. The venture bought Ocean Village shortly after Sandy and has planned extensive renovations. [WSJ]Hiten Samtani