AF Evans Unveils Fund to Lower Costs for Home Buyers.

OAKLAND, Calif. -- San Francisco Bay Area public officials and developer AF Evans have unveiled the Bay Area Workforce Housing Equity Fund, which gives the region's homebuyers some needed financial relief in one of the nation's hottest housing markets.

San Francisco Mayor Gavin Newsom touted the Fund as a "major step by business to help families and individuals to buy a home in San Francisco."

"I applaud AF Evans for their leadership and ingenuity in creating the Workforce Housing Fund. This project demonstrates that this fund can complement the City's Inclusionary Housing Program to improve homeownership opportunities for middle income San Franciscans," said Newsom.

AF Evans established the $75 million Bay Area Workforce Housing Equity Fund to make homes more affordable to buyers. Fund-financed housing will be sold at approximately 15 percent below market prices. The Fund is investing $1.2 million in 888 Seventh Street in San Francisco, which will have 224-units, including 170 Below Market Rate (BMR) units and 54 Workforce units. It is scheduled to open in mid-2007. In Oakland, $6.5 million will be invested from the Fund in the 75-unit 901 Jefferson Street workforce housing development, scheduled to open in early 2008.

"The Fund will help advance our goal of bringing 10,000 new residents to downtown Oakland," said Oakland Mayor Jerry Brown.

Banks and financial institutions invest in the Fund. The Fund then invests in AF Evans' projects to lower the equity cost of the overall project financing. Lower equity costs, combined with the rapid selling period of the properties in a strong housing market, are expected to diminish carrying, construction financing and marketing costs. Those savings, together with the willingness of AF Evans and the Fund to accept reduced profits, allow for pricing of units to be lowered for consumers. No public funds are used.

"By being partners in the community, we have created a scenario where investors and buyers benefit. Our goal is to create quality housing for all income levels," said Alan Greenwald, president, AF Evans Company, Inc.

Conventional financing focuses almost exclusively on the land costs, construction cost savings and subsidized buyer financing. The Fund shifts this formula to include finance-cost savings.

The Development Fund, a San Francisco area nonprofit, provided overall project management and investor recruitment skills for the formation of the Fund. The Fund is administered by Pacific Life's Real Estate Group. The Development Fund Advisors (an affiliate of The Development Fund) serves as Fund Advisor.

"This is very exciting for The Development Fund and for communities that are in need of capital to build desperately needed housing. This Fund adds a missing ingredient in affordable housing development -- equity at a reasonable cost -- that makes the difference between affordable home ownership and long commutes or substandard housing in the Bay Area," said Sid Johnston, executive director of The Development Fund.

Oakland-based AF Evans has completed 29 projects in the Bay Area. To date, AF Evans has built approximately 10,000 housing units on the West Coast, with an additional 5,000 units planned or under construction. For additional information, please see www.afevans.com.