Seeking financial and social good

Chris King says he has an answer to the affordable housing crisis; will investors buy?

Winter Park businessman Chris King may have lost his bid for Florida’s lieutenant governor four years ago, but his Elevation Financial Group is chalking up some impressive gains in providing affordable housing across the country.

While the nation struggles with rapidly climbing rents, King, 43, is heading into his 16th year using a novel private investment model to pour $100 million into the preservation and rehabilitation of affordable housing in 13 states — most of it for people 55 and older.

Last week, Elevation Financial Group launched its eighth investment fund. It was the first since COVID-19 hit.

Hoping to raise up to $90 million, King’s company will use the fund to purchase distressed or failing senior-living communities. Then the company — established to generate both profits and social good — will rehabilitate and upgrade the units before renting them out.

Because Elevation manages the rehabilitation process and rents the properties out at full capacity, it can keep prices low, King said.

The average rent to date: $700 a month.

“We have been in this work from the Great Recession through an international pandemic,” he said. “And we do this all with private capital. Most people who do affordable housing require government funds, and we took a different path.”

That path — so far — has proved quite lucrative for both King and his investors. When Elevation eventually sells the properties, the value has often increased substantially, bringing investors an internal rate of return of 12% to 24%. The newest fund will require investors to leave their funds in for at least seven years.

Frank Wells, CEO of HOUSD, Central Florida’s regional housing trust, said he welcomes the private-sector model.

“As deep as our affordable housing crisis is, we need every possible solution that people can propose,” he said. “The [government] low-income housing tax credits, especially the highly competitive ones, are heavily allocated. There are only so many dollars to go around every year, so we’ve got to rely more on private-market-driven solutions.”

But King acknowledges it’s not a panacea. For one thing, it has focused on a particular type of multi-family retirement housing: independent-living communities or assisted-living communities.

More critically, Elevation Financial has continued to own only two local properties — the 156-unit Hillcrest Hampton House in Orlando and Sanford’s 158-unit Serenity Towers on the St. Johns. Other properties are sold after several years to pay off investors, which means Elevation no longer controls the rent.

“We came up with a solution for those [two properties] there, but that’s our constant struggle,” King acknowledged. “Nobody wants to commit to forever.”

And Elevation hasn’t been able to make the model work financially in Central Florida for the past seven years, King said. Because so many people continue to move to the region — roughly 1,500 people every week — high demand keeps even dilapidated housing overpriced.

“It’s crazy,” King said. “You know, we have properties on Cape Cod. But in Orlando or Tampa, prices are just through the roof.”

RICARDO RAMIREZ BUXEDA/ORLANDO SENTINEL Above: Elevation Financial Group founder Chris King — who made an unsuccessful bid for Florida lieutenant governor in 2018 — speaks at an investor luncheon on May 12. His company has spent $100 million to create affordable housing by buying distressed multifamily housing — including assisted living facilities and nursing homes — and rehabilitate them, renting them out as affordable apartments. For that, he says, he’s getting investors an average of a 13.5% rate of return within five years.