PHOTO: Matthew Scott
Last year was a time for BRIDGE Housing’s leaders to reflect on the firm’s 30-year history—but not for too long. They were busy making their own mark, adding to a portfolio that already boasted 10,000 units.
The San Francisco–based nonprofit is in a big-time growth phase as it pushes to double in size in the next five years. It’s a tough, lofty goal but one that BRIDGE is embracing. After all, no pressure, no diamonds.
“Why not us?” says Cynthia Parker, president and CEO. “We’ve developed a platform that’s working. Why shouldn’t we be contributing to the affordable housing stock?”
BRIDGE stepped up last year, starting seven new developments with 584 affordable units, to rank No. 5 on the AHF 50 list. It expects to start construction on a similar number of units this year. Overall, BRIDGE’s pipeline has a hefty 5,000 potential units under site control.
The firm, which also ranks No. 20 on the Top 50 list of the largest owners, has long been a company driven by production. It was formed when an anonymous donor provided a gift of IBM stock valued at $650,000 to figure out how to deliver affordable housing in the pricey Bay Area. Rather than commission a study that would sit on a shelf, a development company was born.
Growing regionally, financially
Since building its first multifamily development, the 32-unit Pickleweed Apartments in Marin County, which BRIDGE still owns and operates, the firm has become a regional powerhouse.
The Abigail, a 142-unit development in Portland, will be BRIDGE Housing’s first in Oregon. PHOTO: Courtesy BRIDGE Housing
At the end of February, BRIDGE held a ground-breaking ceremony for one of its latest developments, the 68-unit AvéVista in Oakland, Calif.
The company’s future growth will come as it stretches beyond its traditional Northern California borders. BRIDGE is becoming more active across the state, starting construction on projects in Los Angeles, San Diego, and Temecula in the south last year.
This year, it plans to start construction on its first Oregon project, The Abigail, a 142-unit development in Portland’s Pearl District. It is also branching into Washington, with the acquisition of a big, 425-unit development in Seattle.
BRIDGE was looking to “add value” to new regions. “We also had concentration risk in California,” says Parker.
The Northwest is a familiar market to Parker, who established the city of Seattle’s Office of Housing and served as regional president for Mercy Housing in the area before joining BRIDGE in 2010. She is the organization’s third president and CEO, following the late Don Terner and Carol Galante, who now heads the Federal Housing Administration.
As part of the firm’s expansion, BRIDGE has restructured its development unit into three regions—Northern California, Southern California, and the Pacific Northwest.
Within the unit, there’s also a new business development group that’s made up of three deal hunters who aggressively search for potential projects. A fourth does double duty as a project manager and deal hunter.
In another move, BRIDGE has consolidated the way it bids out its debt and equity needs. By bundling several projects during the bidding process, the developer has been able to get higher pricing on its low-income housing tax credits and lower pricing on its debt. A robust volume of projects allows BRIDGE to make this move. Bidders can bid on the whole package or part of it.
Looking ahead, BRIDGE, which has a $13 million annual budget, is forming its own private-placement equity fund to acquire existing properties as well as possibly help finance new construction. BRIDGE is also exploring creating its own syndication arm to syndicate housing tax credits.
Parker’s office shelf is adorned with a sign: “Life is all about how you handle Plan B.” A particularly apt reminder in these times.
Like other affordable housing developers, Parker and her team have had to overcome diminishing federal and regional resources. Roughly half of the firm’s deals used to have funding from the state’s redevelopment agencies (RDAs). When these agencies across the state were dissolved in 2012, BRIDGE spent considerable time locking up all of its deals that had RDA money coming in. As a result, it managed to protect all of its funding and not lose a single dollar.
“In the face of no redevelopment agency money and other financial issues, they have persevered with their projects,” says Eric Johnson, executive director of the Oakland Housing Authority (OHA), a partner on the AvéVista development.
His agency has teamed with BRIDGE on several projects during the past 15 years, including Mandela Gateway, a large transit-oriented development (TOD) that was OHA’s first big redevelopment effort.
“BRIDGE had a tremendous amount of growth with Carol Galante, and it’s a story of success,” says Johnson. “Since Cynthia Parker has taken over, she’s continued the mission drive and business approach that BRIDGE has.”
In recent years, the company has become known for building large TOD and master-planned communities. Construction is under way at MacArthur Station, a 624-unit, mixed-income development adjacent to a Bay Area Rapid Transit (BART) train station in Oakland.
The firm is projected to start the Cornerstone, a 200-unit development near another BART station in San Leandro, this year. BRIDGE is also working on a pair of TOD projects in San Diego, and The Abigail is on Portland’s streetcar line.
One of BRIDGE’s newest developments is Terraza Palmera, which brings 62 affordable family units to Oakland, Calif. It is part of a multigenerational campus. PHOTO: Keith Baker, Courtesy BRIDGE Housing
“We’ve deliberately gone after TOD sites,” Parker says. “It’s become something we feel we understand as a builder.”
These deals are usually highly complex, requiring collaboration with multiple agencies. On the other hand, the public agencies may have surplus land, and projects can potentially access TOD-related funding.
Taking care of home
BRIDGE also continues to build its hometown, one of the most expensive housing markets in the United States. The average rent in the city was $3,057 in the recent fourth quarter, according to RealFacts, an apartment data and analysis company.
The developer is part of a partnership working on a high-profile TOD development near downtown. Plans call for Avant Housing and Essex Property Trust to build a flashy market-rate housing tower with about 400 units and BRIDGE to co-build about 150 affordable units in an adjacent mid-rise. The project is notable for its size and its location near the Transbay Transit Center, which is under construction and is being dubbed the “Grand Central Station of the West.”
“The biggest challenge facing our city today is ensuring that San Francisco remains a place everyone can afford to call home,” says Mayor Ed Lee.
He points to BRIDGE’s ongoing efforts in spearheading Rebuild Potrero, an ambitious plan to replace more than 600 units of public housing with mixed-income homes and services shaped by neighborhood input.
Without putting a shovel in the ground, the organization has already made an impact at the Potrero Hill site, building a sense of community by organizing activities and getting residents involved in the planning process, Lee says.
“BRIDGE Housing started in San Francisco, so the organization and its employees understand that building affordable housing is more than just bricks and mortar; it’s about building community,” Lee says.
Potrero is just one of many projects in the firm’s future. With many of the pieces in place, the company is determined to make sure the next 30 years will be as good as the first.