Highridge Costa Companies
- Written by: Tom Faunce
- Produced by: Chuck McKenna
- Estimated reading time: 4 mins
For more than 20 years, Highridge Costa Companies has been developing affordable housing by using the Low-Income Housing Tax Credit (LIHTC) program. Since the inception of the company, Highridge Costa has been on a mission to build living communities that meet both individual and city growth planning needs throughout the United States. Having created a portfolio of 276 communities with more than 27,000 units, Highridge Costa has affordable communities in 33 states as well as Puerto Rico.
A different kind of company
Founded by Michael Costa in 1994, Highridge Costa has established a unique business model that separates the company from other development firms in the West. Not only is Highridge Costa an affordable housing development firm, the company also sells its own tax credits. A traditional model for developers includes receiving an allocation of tax credits and taking them to a syndicator that bundles tax credits from numerous developers to sell to institutional investors — usually banks. “We have eliminated the middleman,” says Costa. “We take our tax credits directly to the market and sell them to investors.”
Highridge Costa has also maintained a long-term vision for the company since the beginning. As the firm began to design the various communities it was developing, Highridge Costa concerned itself with a 15-year timespan, as this is the length of the term that investors must remain in their partnership to reap the benefits of the initial tax credits. “We’ve always had a focus on the back end,” says Costa. “By doing this we’re able to create value for the company while maintaining very affordable rents.”
By creating quality properties through a strong design method, Highridge Costa recognizes the value at the end of the 15-year period. “At the end of that term, the investor is going to break ties and in most cases we’ll end up owning the property,” says Costa. “Planning for this, we spend a little more than most developers do on quality materials and amenities so we are left with a great product at the end of the 15-year period.”
A passion for the industry
Highridge Costa is also in the business of creating upward mobility for people. “We actually hope to see our tenants progress up and out of these communities and be able to purchase a home or move to a larger market-rate apartment someday,” Costa explains.
“Personally, I like to break down some of the negative connotations that are associated with affordable housing. We want to create an atmosphere that is no different from the market-rate atmosphere next door.”
With a diverse target market, Highridge Costa houses many professionals who are early in their careers and have found Highridge Costa as a quality, affordable option while they start their careers. In a typical community, one would find many young nurses, policemen, teachers and retail workers. The company’s well-planned, attractive and affordable housing solutions enable these young professionals to live in the communities where they work as well as remain close to the people who rely on them.
Highridge Costa communities have also proven to be fitting for single mothers. Every development has a clubhouse on location that houses many social activities and depending on the amount of children in the community, provides afterschool programs. “We actually have vans that will pick a child up from school and bring them to the clubhouse if that child’s parent is not able to get out of work by the time they are released from school,” says Costa. “We have programs set up that will help the child with after-school activities, such as helping them with their homework. This is typically overseen by a nonprofit partner that brings in local high school and college students to assist.”
This aspect of the work that Costa performs is the most important to him. The opportunity to create a healthy living environment for people who are in a transitional phase of their lives is what motivates not only him, but his company as well. “I’ll often have single mothers describe their previous substandard living situation for them and their children, and then proceed to deliver the most genuine thank you because now, for the first time, they have a great place they can call home,” he says. “It’s very gratifying. There aren’t too many occupations that create opportunities as rewarding as that.”
According to the National Association of Home Builders (NAHB), the construction and ongoing operation of LIHTC properties generates $8.8 billion of income for the economy each year. It also creates 167,000 jobs and produces $1.3 billion in revenue for local governments. Appropriately, Highridge Costa’s tagline is “Creating a Blueprint for a Better Nation.” “However, we are not done,” says Costa, “We have a lot of work to do as we are far behind the demand for quality affordable housing in this nation.” With a staff that is passionate about its work and the opportunities it creates for people, Highridge Costa Companies will remain an example of what the affordable housing industry in the United States is capable of.
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