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SAN DIEGO-Phoenix Realty Group has completed capitalization of its $90-million San Diego Smart Growth Fund. The firm, which has offices in New York, Los Angeles and San Diego, picked up an additional $30 million in equity from Northwestern Mutual, Washington Mutual and in-house coffers to complete the fund.In May, Phoenix Realty received an initial investment of $60 million from CalPERS. In all, the equity will be leveraged for more than $500 million in local development. The fund will provide equity of $5 million to $10 million towards projects ranging from $10 million to roughly $80 million in total costs."The San Diego Smart Growth Fund is an innovative financing solution to the housing crisis facing San Diego," says J. Michael Fried, founder and CEO of Phoenix Realty Group, which manages the fund.The firm already has four projects targeted for development, according to Tammy Harpster, vice president in the San Diego office. "We're not going public with the projects right now," Harpster tells Globest.com. Specifics on the developments will be released later this month, according to Harpster. For now, she says, all four projects will be in San Diego County, with two residing in the City of San Diego, one in National City and one in Chula Vista. "All of the projects will be ground-up development," Harpster adds.The San Diego Smart Growth Fund was established to provide housing for middle-income households and commercial projects earmarked for urban renewal areas, according to Xavier A. Gutierrez, vice president in Phoenix Realty's Los Angeles office. Although San Diego is experiencing a softening housing market, Gutierrez tells Globest.com that the slowed demand is occurring at the top end of the market.The "forgotten middle" segment of the market is booming, according to Gutierrez. "The current housing prices have them being priced out of the market," he adds. "This fund provides housing to that middle segment." Phoenix Realty targets households making 80 to 200% of the San Diego median income of approximately $63,000--an annual income range of $50,000 to $126,000, according to Gutierrez.According to the latest figures, the median home price hovers around $600,000 in the area, while Phoenix Realty's "sweet spot is in the $300,000 to $450,000 range," says Gutierrez. With construction costs rising both Gutierrez and Harpster say that Phoenix Realty is making adjustments to keep from passing down additional rates to homebuyers. "We're using the same quality of material," Harpster says, "but we're being more creative and more efficient in regards to construction."The San Diego Capital Collaborative serves as advisor to Phoenix Realty. The collaborative was formed by the San Diego City-County Reinvestment Task Force under the direction of County Supervisor Ron Roberts and City Councilman Tony Young. A report released by Phoenix Realty estimates that the fund will "yield $18 million in sales tax revenue while providing more than 2,400 jobs."