Capital stack study

The top floor helps pay for the first floor.

Every figure on this page is illustrative. Real numbers come from each project’s pro forma.

1Start with the site

Choose whether this building is new or an existing one brought back into use. Rehabilitation starts with the frame already standing and usually costs less per home. Where the building is historic, it can also earn historic tax credits.

2Decide who lives on each floor

The street level holds shops and services. No one lives there. The three floors above are homes. Area median income, or AMI, is how housing programs set rents: a home at 30% AMI is priced for someone earning 30% of the local median, with rent held to about a third of that income. Move a slider to change who a floor is built for. In the drawing, a deeper color means deeper affordability.

Rental assistance on supportive homes. A voucher pays the difference between what a resident at 30% AMI or below can afford and a fair market rent. Vouchers are scarce and awarded competitively. Shops and services at street level: a coffee shop, child care, a clinic, and storefronts that pay rent into the building.

3See what each floor brings in

Operating costs are about the same on every floor. Rent is what changes. Supportive homes also carry the cost of on-site case management.

Floor	Income level	Rent	Net per month
Whole building, per year

4Commit the capital

Seven sources pay for a building like this, each with its own rules and timing. Check each one as it commits and watch how far the building gets. The amounts follow the site and the income mix you set above.

5What a gift does here

Tax credit investors, lenders, and impact investors size their commitments to the rents. The market-rate floor and the shops raise those rents enough to carry a loan and pay investors back. Philanthropy covers what is left, and that is what lets the first floor stay deeply affordable for good.

Jeff Quayle
Chief Real Estate Officer, Switchpoint
jeff.quayle@switchpoint.org
435.218.4566