Simpson Retags 116 Units as Affordable

PHOENIX-Simpson Housing Solutions LLC of Long Beach, CA has completed its first market-rate to affordable-rent conversion after investing $11.5 million into the plan and capping one year of work on the 116-unit Village Square Apartments.

Simpson acquired the complex a little more than a year ago. It has developed other affordable complexes in the area from the ground up, but Village Square at 14014 N. 32nd St. is its first renovation of an existing complex in the region.

Michael Costa, Simpson's president, says Village Square met the parameters needed for an affordable housing development, which is why it was acquired in the first place. "We first want to make sure we have a solid structure and this had it," he says. "Second, because we're converting a market-rate product to affordable units, we pay attention to existing income levels and the market. Often, as was the case here, 80% of the existing tenant base and their income levels fit what we were trying to accomplish." As a result, he continues, the community remains stable after the conversion.

Costa says Simpson has a presence in 34 states and Puerto Rico, but the strong presence in Arizona was built into strategic planning within the past year. "We retargeted our efforts to the western United States, including California, Arizona, New Mexico, Colorado and Nevada," he says. "We have a focus on Arizona that's different from previous years."

Village Square, which has just reached 94% occupancy, will remain in Simpson's portfolio as a long-term hold. "We hold each of our communities for a minimum of 15 years," Costa says, noting HUD requires long-term holds for affordable housing developers to obtain low-income tax credits and financing from the government. "But we could hold it beyond that," he adds. "This is a solid property."

Village Square Apartments features one- and two-bedroom units, ranging from 620 sf to 1,209 sf. The monthly rents range from $479 to $712.