Somerset Moves Forward with Major U Street Affordable Housing Project
Somerset Development expects to close on a $21M loan today, Bisnow has learned exclusively, clearing the path for it to construct a 366-unit, mixed-use development at one of the highest-profile intersections in DC.
Near the corner of 14th and U streets NW, Somerset is developing two attached buildings. One, on which principal Jim Campbell is closing with EagleBank, is eight stories and 96 units of affordable housing, which will house the residents of the 48-unit Section 8 housing project currently on the site, Portner Place. Jim says he expects that building near the corner of 14th and V—to be renamed Portner Flats—will deliver in fall 2017.
The second building, as yet unnamed, will include 270 market rate apartments and have 14k SF of retail on U Street. Jim says a private developer will develop this section, and he expects to close on selling that portion in December. He says it should open six months after its next-door neighbor. Somerset bought the property last year for $16M as a JV with New York-based Jonathan Rose Cos and the Rose Green Cities Fund, but Jim says he’s been working with the tenant association since 2008 to get its approval on the project.
For the two years of construction, the tenants will be relocated, but their Section 8 status will carry over into the new building. For the 48 available apartments, Somerset will make them affordable to those making 60% AMI or less. Jim was proudest of the fact that he would not be displacing the current, low-income residents with his new development. Preserving affordable housing was one of the prime topics at yesterday's affordable housing event.
“Many of these folks have lived there for 30, 35 years, and have lived in the area their whole lives,” he tells us. “They went through the hard times in that neighborhood, and it’s fabulous that the project enabled them to stay there through the good times.” And although the federal government is keeping the Section 8 vouchers and DC is subsidizing part of the construction, Jim says the profits from the market rate building will fund Portner Flats. The affordable building will still have plenty of the typical amenities, like a fitness room, rooftop deck and community garden. But, most importantly, it will give longtime residents a chance to stay in their community in a building that isn't deteriorating.