Los Angeles developer BH Properties is launching a dedicated business line to meet rising demand for affordable and market-rate housing in high-growth Western U.S. markets.
Haven Housing, a stand-alone multifamily investment platform, will acquire and operate older income-restricted apartment buildings and workforce housing communities. The new venture is debuting with 2,500 units under management and plans to scale by targeting 100-plus-unit, garden-style properties in markets such as Arizona, Colorado, Nevada, Oregon, Texas, Utah and Washington as well as California.
The firm is zeroing in on properties developed under the federal Low-Income Housing Tax Credit program that have reached the end of their 15-year compliance periods. BH Properties plans to renew affordability contracts and renovate properties to unlock long-term value, an approach similar to those used by Community Preservation Partners and Hudson Valley Property Group.
Investors have shown growing interest in the affordable housing segment as home prices continue to soar and more Americans are priced out of homeownership. U.S. home values have risen more than 50% since the start of the pandemic, according to the S&P CoreLogic Case-Shiller Home Price Indices. Meanwhile, renter cost burdens have reached record highs, per a 2024 report from Harvard’s Joint Center for Housing Studies.
Even so, development of affordable housing remains cost-prohibitive in many places. In Los Angeles, the average cost to build a subsidized unit exceeds $1 million, nearly double the cost in Texas, Arizona and Georgia, according to a federal report.
Other investors are taking similar steps to increase affordable housing inventory. In one of the largest recent deals in the space, Standard Communities acquired a $1 billion portfolio of 60 affordable apartment complexes in four states last fall. More firms are pursuing acquisition-based strategies rather than new construction, citing quicker timelines and fewer entitlement risks.
Retain affordability
BH Properties hired Connor Mortland to lead the initiative as managing director and head of affordable housing acquisitions. He will work from the company’s San Diego office, reporting to President Jim Brooks.
Mortland previously oversaw $1 billion in affordable housing acquisitions at Avanath Capital Management in Irvine, California, where he managed a national portfolio of more than 3,000 units and helped close a $132 million Bay Area deal that won a 2023 CoStar Impact Award. He began his career as a senior associate at PwC in New York.
“Haven Housing allows us to operate with clarity and focus in the residential sector,” Brooks said in a statement. Mortland added that the platform represents a chance to “blend purpose with performance” by preserving aging housing stock while delivering stable returns.
BH Properties, which owns roughly 11 million square feet across asset classes, has been better known in recent years for its acquisitions of office, retail and industrial buildings. Its multifamily portfolio includes about 30 properties, according to CoStar data.
Recent deals reflect the firm’s appetite for opportunistic buys. This year, it acquired the two-building The Park at Barton Creek office complex in Austin, Texas, from Starwood Capital Group; a 110,000-square-foot office building at 2125 O'Nel Drive in San Jose, California, from Embarcadero Capital Partners for $15 million; and the 374,085-square-foot Legacy R&D business park in Plano, Texas, for nearly $43 million from DRA Advisors.
Several Western states, including Arizona and Colorado, have recently passed or proposed legislation to incentivize preservation of expiring affordable housing stock. Those moves could make BH’s strategy more viable as local governments seek to retain affordability without subsidizing new development.
For instance, the Housing Phoenix Plan sets a goal to create or preserve 50,000 homes by 2030 and includes strategies such as land banking, community land trusts, landlord incentives and expansion of rental rehabilitation programs.
More than 520,000 federally subsidized affordable housing units are set to lose their tax credit protections between 2025 and 2038, with another 330,000 units exiting their extended-use agreements in that same period, according to Yardi Matrix.
Texas, Florida, Ohio, California and North Carolina are expected to see the highest number of expirations, creating a growing pool of aging properties that investors like BH aim to preserve before they convert to market-rate rents.