Ethos Development and Catalyst Opportunity Funds wanted to build an apartment project in Tacoma, Washington, that was affordable and energy efficient while providing a high quality of life for residents.
Nearly three years later, The Moraine, a 160-unit multifamily development in the city's Hilltop neighborhood that Ethos and Catalyst finished last year, has checked all of those boxes.
"We believe in human-centered design, focusing on affordability, energy efficiency and creative solutions to support quality of life,” said Paul Del Vecchio, president of Portland, Oregon-based Ethos Development.
The complex at 1402 Tacoma Ave. South is a milestone for the mainly low-income neighborhood that lacks affordable housing options. The developers even planted more than two-dozen trees to offset the project's "heat island" effects.
The majority of the development's apartments are targeted for individuals and households earning less than 80% of the area median income. A partnership between the public and private sectors — and an innovative two-tranche financing structure from Catalyst — made the project possible.
The fund structure is designed to boost affordability by combining a capital tranche aimed at achieving traditional market-rate investor returns with more affordability-driven capital that isn't as focused on generating high investment yields. A 12-year tax exemption also helped unlock lower rents for residents.
The Moraine is the first building in Catalyst's national portfolio to benefit from the two-tranche approach, said Kristian Peterson, the Salt Lake City, Utah-based firm's managing partner.
"As a real estate investment firm, we believe that projects can be both financially rewarding, as well as socially and environmentally impactful," Peterson added.
The innovative financing approach, combined with the tree-planting efforts and other energy-efficient touches, such as rooftop solar and EnergyStar- and WaterSense-rated appliances and fixtures, earned the project a 2025 CoStar Impact Award, as judged by real estate professionals familiar with the market.
About the project: The mixed-income urban infill development broke ground in mid-2022 and finished construction last May. In exchange for Tacoma's 12-year limited property tax exemption, the project sets aside 20% of the units at rents that are affordable to residents with incomes at or below 80% of the area median income — a step toward meeting Tacoma's affordable housing needs.
As part of a broader housing affordability initiative led by Catalyst, the project reserves another block of 56 units for tenants earning 78% or less of the area median income. The Moraine has numerous features typical of more expensive market-rate apartment developments, including a clubhouse, media room, fitness center, sundeck, business center and bike racks.
What the judges said: "Representing the best of Tacoma's multifamily developments, The Moraine stands apart from the other nominees,"said Colliers Research Manager Jacob Pavlik. "They not only provide for financial needs of the surrounding community, but Ethos Development and Catalyst Opportunity Funds also worked to increase the neglected tree canopy of the area, aiming to reduce the urban heat island effect with 26 trees onsite."
The two-tranche financing structure marrying market rate and affordable capital resulted in most of the units being available to people earning 80% or less of the area median income, Pavlik added.
"Supporting communities of color is a critical need for the continued region's economic success," added Rebecca Lovell, chief operating officer of Greater Seattle Partners. "This investment in Tacoma's Hilltop is timely and overcame significant challenges."
They made it happen: Leading the development were Ethos Development's Anders Meyer and Paul Del Vecchio; Catalyst Opportunity Funds co-founders and managing partners Jeremy Keele and Jim Sorenson, and Catalyst Managing Partner Kristian Peterson.