Published on February 1, 2024 at 6:13 pm
The Jacksonville Housing Authority this week inched closer to buying more “moderate-income” apartment units on the city’s west side.
By incurring debt in the form of revenue bonds, the agency is expected to raise enough funding so it can buy Westwood Apartments, off Normandy Boulevard.
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During a meeting Tuesday of JHA’s Board of Commissioners — when the CEO of the affordable housing agency abruptly gave his notice to resign — the board also approved issuing the $47 million in revenue-based bonds to acquire and renovate the 256-unit complex at 1171 Lane Ave. S.
“It’s debt,” explains agency spokesman John Finotti. “Bonds are debt. They’re sold on Wall Street to investors.”
Typically, Finotti says, investors tend to be large insurance companies or mutual funds, or perhaps larger companies. After the investors buy up the bonds, the influx of cash will be used to acquire and renovate the apartments. Then, over time, those investors are paid back using revenue from renting out the apartments.
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“Those people who move in and lease rentals generate revenue, and some of that revenue will be used to repay the bonds,” Finotti says.
He says the agency is able to do this because back in 2022, it received an A+ credit rating from S&P Global Ratings “based on the authority’s stable outlook and experienced management.”
On Tuesday, Housing authority Vice Chair Heather Horovitz thanked outgoing CEO and President Dwayne Alexander for his leadership in allowing the agency to use the debt option.
“This would allow us to do more creative things moving forward, acquiring properties,” Horowitz said at the meeting. “It’s really the first step in what is going to be a number of great steps toward being able to finance additional units.”
The authority has previously taken on debt for rental assistance projects with the U.S. Housing and Urban Development Department using private borrowers and the Jacksonville Housing Finance Authority, says Robert C. Reid, an attorney who consulted on the deal. But he says the new bond issuance is different.
“This will be the first direct issuance of debt by the housing authority to the general public,” he told commissioners at the meeting this week.
The housing authority has been working since at least 2021 to acquire and rehabilitate more units in its stable of low- to moderate-income housing in Duval County.
“This is a significant development for the Jacksonville Housing Authority,” said Alexander. “Public housing authorities are going to need to look for new ways to finance the acquisition of new housing stock if we want to meet the growing need for safe and affordable homes for our low- and moderate-income families.”
The agency offers approximately 2,000 public housing and 1,000 affordable housing units to low- and moderate-income residents at developments and homes around Jacksonville, and also manages federal housing dollars for about 8,500 housing-choice vouchers.
While Alexander on Tuesday announced his intent to step down from leading the housing agency, he provided 30-days’ notice and said he aims to see the acquisition of Westwood Apartments through.
The resolution allowing the bond issuance designated Alexander as the point of contact for the sale.
