WILMINGTON — Cape Fear Collective has stepped in to purchase Driftwood Apartments, an affordable housing community that attracted controversy earlier this year when its owner attempted to put it on the market.
Th 14-unit complex will be renovated and preserved as low-income housing as part of the pending $1.2 million sale, awaiting U.S. Housing and Urban Development approval. It was first developed to provide housing to chronically homeless residents.
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“HUD takes the pending sale of Driftwood Apartments very seriously and continues to look into this matter very closely,” a HUD spokesperson wrote in an email Wednesday.
After residents were given less than 30 days’ notice to vacate the property in early January, Wilmington City Council members alerted HUD and the N.C. Housing Finance Agency about potential problems with the sale, according to WECT.
The project utilized Low Income Tax Credits when it was developed and was given a $250,000 grant from HUD, WHQR reported. Its owner, Raleigh-based APG Capital, put the apartments up for sale because they had become too costly to maintain, according to a Cape Fear Collective release announcing the pending sale.
As part of the deal, APG has pledged to commit $250,000 to assist with affordable housing costs. APG still owes HUD about $14,000 as part of a 20-year commitment, according to the StarNews.
Impact investment
Patrick Brien, Cape Fear Collective’s CEO, said he expects the deal to close in June, pending approvals. The nonprofit will conduct extensive repairs on the units, Brien said, from inteterior renovations to improve energy efficiency to roof repairs.
CFC’s announcement marks the new nonprofit’s second major affordable housing purchase as part of Collective Ventures, its social impact investing initiative. The initiative looks to answer a vital question, Brien explained: “How do we mobilize private sector capital for public good?”
Heavily relying on data science, CFC sets out to make strategic — and profitable — investments with maximum social impact. Returns will help further expand CFC’s reach and ability to invest in marginalized communities, Brien previously explained to Port City Daily.
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In late December, CFC purchased a 20-unit housing portfolio of affordable homes scattered in the Wilmington area, with three in Pender County. That purchase was made possible by a $2.5 million investment by Live Oak Bank, which will earn a 2% return.
Brien said CFC’s role through its Ventures program is “putting nonprofits out front” as it stays in the background after making moves on high-impact purchases. CFC seeks to elevate nonprofits already doing work in this space, Brien explained, and will lean on its partners to manage the properties.
“We’re really just hoping to put fuel to their fire,” Brien said.
CFC is looking into the possibility of rehoming residents who were displaced in January, with an early Fall move-in date anticipated. Two residents stayed on site throughout the whole process, according to Brien. Below-market rentals at Driftwood will be made available to those earning at or below 30% area median income.
The collective is eyeing other potential affordable housing acquisitions to add to its 40-unit portfolio. “We hope that number will climb in the near future,” he said. “We’re honored to be part of the solution.”
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