ASREF II’s $6.2M investment enabled Elizabeth Property Group to acquire and renovate the 148-unit Kensington Apartments in Austin, Texas, preserving long-term affordability through a 99-year ground lease, LIHTC program participation, and a partnership with Integral Care to provide on-site social services and permanent supportive housing for unhoused individuals.
ASREF’s $6.2M investment will allow Elizabeth Property Group (“EPG”), a Women-Owned Business, to acquire and renovate the 148-unit Kensington Apartments project. This multifamily affordable housing complex in Austin, Texas, is mandated to maintain affordability at less than 60% of Area Median Income (“AMI”) and, via a 99-year ground lease, is required to provide social services while reserving at least thirty (30) units to tenant-based Section 8 vouchers. Entering the property into the Federal Low-Income Housing Tax Credit program ensures long-term affordability for a project that would be unlikely to remain otherwise and aligns the project with a federally designated program to maintain affordable housing.
The project will include a partnership with Integral Care, a Travis County subsidiary, for a 100% property tax abatement in exchange for a 99-year ground lease requiring on-site social work services. Integral Care will also have referral rights on at least thirty (30) units. These units will be designated as Permanent Supportive Housing (PSH) for unhoused individuals. On July 28, 2023, ASREF II exited the Kensington Apartments with a Housing & Urban Development loan, Low Income Housing Tax Credit equity, and HOME ARP funds. The project will undergo a major renovation during the LIHTC phase that will ensure the long-term affordability of the project.
| Asset Type | Multi-Family Residential |
| Development Type | Renovation |
| Previous Use | Multi-Family Residential |
| Investment Closing Date | July 17, 2021; Exited July 2023 |
| Total Development Area | 2.7 acres (117,988 SF) |
| Construction Timeframe | Start: Summer 2022: ; Finish: Q2 2024 |
$14.8M
$14.8M
$6.2M
$0.8M
$7.0M
American South Capital Partners collects each project's census tract income level at the time of close as part of CRA reporting guidelines. Source: Federal Financial Institutions Examination Council Geocoder.
ELIZABETH PROPERTY GROUP (“EPG”) is a Texas-based affordable multifamily owner/operator focused on affordable acquisition/rehab properties. EPG targets affordable investments that require a physical or operational repositioning, and that have regulatory complexity and/or a scale that serve as barriers to larger institutional operators.
| Location | 3300 Manor Rd, Austin, TX, 78723 |
| Area | Austin Metropolitan Statistical Area |
| LMI Community Status | Upper |
| Unemployment Rate | 9% |
| Poverty Rate | 22% |
| % Minority | 46% (13% African American) |
The Kensington Apartments is located in the MLK neighborhood on the east side of Austin. Despite being in an upper-income census tract, the percentage of residents below poverty is 22%. The tract is also adjacent to five low- to moderate-income census tracts.
In addition to skyrocketing rents resulting from population increases, the Austin Metropolitan area has seen an increase in homelessness each year since 2017 according to the City’s ECHO dashboard. Kensington Apartments will not only preserve quality multifamily housing at affordable rates, but also help meet growing demand for permanent supportive housing.
ASREF II’s $6.2 million preferred equity investment in The Kensington Apartments preserved the availability of quality affordable housing while also meeting demand for PSH. The conversion of the property to the LIHTC program will ensure long-term affordability.
