The booming market for Twin Cities apartments has been grabbing headlines for months now, with thousands of units of new construction in the planning stages and existing buildings fetching top dollar as deep-pocketed buyers crowd into the market.

But the investor interest isn't just limited to glitzy, market-rate apartments in trendy spots like downtown Minneapolis and the Uptown neighborhood. It's also spread into the more humble world of the affordable housing -- buildings in decidedly less glamorous neighborhoods that offer government-subsidized units and services for low- and moderate-income tenants.

Long perceived as the domain of socially motivated nonprofits and private landlords with spotty track records, the affordable housing sector with its tax credits for owners and investors is now seen as a safe and steady alternative to the volatile stock market and other forms of commercial real estate. The problem, however, remains their scarcity.

Low-income residents in Minnesota and the country still face an acute shortage of affordable housing. So when well-situated buildings become available for sale, the result has been outright competition among would-be buyers/rehabbers -- both for-profit and nonprofit, according to local industry players.

The best recent example of renewed investor interest in low-income housing is Riverside Plaza in Minneapolis, where owner George Sherman was able to round up $134 million from more than a dozen governmental and private sources to finance a major overhaul of the aging, 1,300-unit landmark high-rises.

Among the private sources was the AFL-CIO Housing Investment Trust, which committed $50 million in pension funds to the project. Another investor was the Internet giant Google, which partnered in the effort through its foundation.

And a key role in the Riverside project was played by the sale of federal Low-Income Housing Tax Credits (LIHTC). After falling out of favor during the depths of the recession, they've bounced back in popularity now that more real estate investors have decided to go with "safe and secure" plays.

The tax credits are allocated from the federal government to states and cities, which dole them out about to affordable housing developers in an often fierce competition that has become even fiercer now that interest in them from investors such as REITs, insurance companies and corporations has risen substantially in little more than a year, according to the San Francisco-based accounting firm Novogradac & Co., which follows industry trends through its Affordable Housing Resource Center.

Its figures indicate that average national prices fetched by affordable housing developers have risen from a low of 63 cents on the dollar in April 2010 to 84 cents on the dollar in April, and have been hovering around 80 cents since then.

Gina Dingman, president of Minneapolis-based GDCRE Inc., a commercial real estate firm, said the low-income sector "is back in play and there's a lot of interest in affordable housing today with a lot of buyers from both the for-profit and nonprofit sectors out there.'' The firm last week brokered the sale of a 121-unit subsidized apartment complex from the Amherst H. Wilder Foundation to a Maryland nonprofit, the National Foundation for Affordable Housing Solutions Inc., which Dingman said competed among a strong field of potential buyers for the 516 Humboldt Avenue complex on St. Paul's West Side.

The purchase price wasn't revealed, but Ramsey County property tax records listed its 2010 assessed value at $8.9 million.

"This is an example of an affordable housing complex that was 100 percent occupied and had a waiting list to get in, with an adjacent nursing home on a beautiful campus setting high on a bluff overlooking the Mississippi River," Dingman said. "Buyers knew it would be a steady performer and would stay occupied."

The Wilder Foundation decided two years ago to sell off the six affordable apartment complexes it owned as part of a downsizing move. The foundation has encountered few problems in finding buyers for them.

Two of the six -- the Wilder Apartments at Snelling and the American House Apartments in St. Paul's Lowertown -- both were sold in May 2010 to the nonprofit Plymouth Church Neighborhood Foundation, while another, the Wilder Square High-Rise, is now under contract, foundation spokeswoman Nan Upin said.

She added the two other apartment buildings on Humboldt Avenue that comprise the scenic Rarig Campus will be offered for sale once U.S. Department of Housing and Development conditions are met.

Dingman said those properties will enter a local affordable housing market where there are few, if any, sizable subsidized buildings available to satisfy the appetite of for-profit developers or the social goals of nonprofits.

"I'm not aware of any other buildings like that on the market right now or that will be coming onto it soon," she said.

Sometimes, she added, nonprofits looking to sell their affordable housing will do so in an off-market way with other nonprofits that share their mission of preserving and rehabilitating scarce affordable housing at a time of burgeoning need.

Wilder chose the Plymouth Church Neighborhood Foundation to purchase its American House apartments in a $1.26 million deal after issuing a request for proposals, the foundation's housing development director Matt Crellin said.

"Our motivations are somewhat different than a for-profit developer," he said. "What we do was a match with what Wilder was seeking -- to preserve affordable housing. We partnered with the city of St. Paul, the state and Ramsey County to put together a package of rental assistance there."

Don Jacobson is a St. Paul-based freelance writer.