FAIRFAX, VA—Jefferson Apartment Group is breaking ground on what will be its first 100% affordable workforce housing project here next month.

The $58 million project, called The Residences at Government Center, will deliver 270 units for individuals earning between fifty and sixty percent of area median income. This is JAG's first 100% workforce housing project, Executive Vice President and Partner Greg Lamb tells GlobeSt.com. "We have previously developed properties that had anywhere from 5% to 20% of its units set aside as affordable."

JAG was able to get this project off the ground because of a unique capital structure it developed combining 4% Low Income Housing Tax Credits and 9% Low Income Housing Tax Credits.

It was very difficult to structure the deal, Lamb says, but not because negotiations with the various groups were problematic. The plan originally was to build with the 4% LIHTC program but then macroeconomic developments, such as the specter of inflation and the likelihood that interest rates were going to rise, emerged and the company realized the structure would not generate enough proceeds to build the project. So last year JAG competitively submitted an application for the 9% tax credits. "It was that difference between the 4% and the 9% credits that allows us to round out the capital stack for the project," Lamb says.

The company hopes it will be able to replicate this structure as it pursues other 100% workforce housing deals around the country, he adds. The development will be next to the Fairfax County Government Center, and across the street from the Fairfax Corner Shopping Center. JAG is renting the land from Fairfax County in a 99-year lease.

The Residences at Government Center will consist of two, four-story buildings and an above-grade parking garage with 367 spaces. The buildings are expected to deliver by the end of 2016, with pre-leasing beginning summer 2016.

Instant Insights /

JAG's "Unique" Tax Credit Structure Funds $58M Workforce Housing

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