Housing Options 101 Workshop September 9, 2011

Housing Options 101 Workshop2

 Funds must be used to increase, improve and preserve the supply of low and moderate income housing.  55-year income and affordability covenants must be imposed on rental units.  Set-Aside funds can be used to: ◦ Acquire land and buildings ◦ Rehabilitate buildings ◦ Provide subsidies to income restricted projects ◦ Preserve the availability of existing restricted units September 9, 2011Housing Options 101 Workshop3

 Temporary Housing  Hotel Vouchers  Access Centers / Social Services  Code Enforcement  Public Safety Services September 9, 2011Housing Options 101 Workshop4

 Short-Term Shelters and Hotel Vouchers: Daily occupancy  Transitional Housing: ◦ Tenants stay in the project for nine to 24 months ◦ Goal is to provide tenants with the skills needed to move to conventional housing  Long-Term Housing: ◦ Tenants require significant supportive services ◦ It is anticipated that tenants will not mainstream into traditional housing September 9, 2011Housing Options 101 Workshop5

 Project Costs: ◦ Property Acquisition ◦ Building or Rehabilitation Costs ◦ Soft Costs and Financing Costs  Ongoing Operation Costs: ◦ General operating expenses ◦ Social services referrals ◦ Reserves for future capital repairs  Contingent Costs ◦ Relocation if units are occupied by permanent residents ◦ Provision of supportive services September 9, 2011Housing Options 101 Workshop6

 Some existing transient motels are renting rooms to tenants on a long-term basis.  The Code Enforcement Task Force launched a multi-disciplinary effort to improve the appearance of existing motels and to reduce criminal activity.  The key objectives of this effort are: ◦ To create maintenance and operational standards ◦ To control vice activities ◦ To encourage the intended transient use September 9, 2011Housing Options 101 Workshop7

September 9, 2011Housing Options 101 Workshop8

9% Tax Credits4% Tax Credits Project Costs Acquisition Costs$60,000/Unit$2,700,000$60,000/Unit$2,700,000 Development Costs$107,100/Unit4,819,000$110,400/Unit4,970,000 Total Project Costs$167,100/Unit$7,519,000$170,400/Unit$7,670,000 Net Operating Income (NOI) Effective Gross Income$6,100/Unit$274,520$7,600/Unit$341,770 Operating Expenses$5,200/Unit(234,750)$5,200/Unit(234,750) Total NOI$39,770$107,020 Available Funding Sources Permanent Loan1.2 DCR / 7% Int$415, DCR / 7% Int$1,117,000 Net Tax Credit Proceeds$115,300/Unit5,189,000$51,100/Unit2,301,000 Total Available Funding Sources$5,604,000$3,418,000 Financial Gap$42,600/Unit$1,915,000$94,500/Unit$4,252,000 September 9, 2011Housing Options 101 Workshop9

9% Tax Credits4% Tax Credits Project Costs Acquisition Costs$60,000/Unit$9,000,000$60,000/Unit$9,000,000 Development Costs$98,500/Unit14,771,000$105,900/Unit15,882,000 Total Project Costs$158,500/Unit$23,771,000$165,900/Unit$24,882,000 Net Operating Income (NOI) Effective Gross Income$6,200/Unit$933,560$7,700/Unit$1,157,120 Operating Expenses$5,200/Unit(782,500)$5,200/Unit(782,500) Total NOI$151,060$374,620 Available Funding Sources Permanent Loan1.2 DCR / 7% Int$1,577, DCR / 7% Int$3,910,000 Net Tax Credit Proceeds$106,400/Unit15,957,000$56,700/Unit8,503,000 Total Available Funding Sources$17,534,000$12,413,000 Financial Gap$41,600/Unit$6,237,000$83,100/Unit$12.469,000 September 9, 2011Housing Options 101 Workshop10

 Set-Aside Funds ◦ Unencumbered funds equal approximately $600,000 per year ◦ These funds support approximately $4.5 million in bond proceeds  Federal HOME Funds ◦ City receives approximately $700,000 per year ◦ Funds are awarded annually and cannot be bonded  City General Fund Dollars September 9, 2011Housing Options 101 Workshop11