Housing for Wyoming’s Citizens Wyoming Housing Trust Fund Proposal WyoNAHRO - October

Housing Challenge Housing is an essential component of Wyoming’s economy, and housing is in short supply in Wyoming Due to the housing shortage, employers are challenged to recruit and retain staff Staff shortages lead to an erosion of service quality and revenue, and businesses become unstable Without stable businesses and essential services, community populations decline, the tax base erodes, the risk of homelessness increases, student performance declines, and communities deteriorate Current housing resources are not enough to address our housing need. Wyoming has relied on federal funds to finance Wyoming’s housing need; federal funds are increasingly unreliable and meet less than 50% of our housing need 2

Proposed Solution WyoNAHRO is proposing the creation of a Wyoming Housing Trust Fund designed to invest in Wyoming’s unique statewide housing needs. 3

What is a Housing Trust Fund? Typically established by legislation, a Housing Trust Fund is a dedicated fund designed to increase and preserve the affordable housing inventory. 4

What Would A Housing Trust Fund do? Provide loans, loan guarantees, loan subsidies, and/or grants to preserve and increase the inventory of rental and ownership housing available to Wyoming citizens who are not able to afford market rate housing. Generate a positive return on the investment of Wyoming Housing Trust Funds by ensuring that each annual allocation of funds results in a long-term Return on Investment (interest income from loans approved exceeds the amount of grant funds awarded). 5

Do Other States Have a HTF? Yes, 47 other states have a HTF 6

What is WyoNAHRO? WyoNAHRO, a 501c3 nonprofit organization, is Wyoming’s Chapter of the National Association of Housing and Redevelopment Officials. A membership organization, WyoNAHRO operates throughout Wyoming with the mission to provide adequate housing for the entire population and the attainment of sound communities through the processes of housing development and preservation. Incorporated in 1975, WyoNAHRO conducts educational conferences and workshops, informs National NAHRO of Wyoming’s housing situation and challenges, and coordinates and encourages activities to achieve its mission – including the development of additional housing resources. Focused on the needs of lower-income households, its 23 current members and beneficiaries include housing organizations and housing interests statewide, economic development entities, lower income households, and ultimately all Wyoming citizens. 7

Why is WyoNAHRO Lead Advocate for a Wyoming Housing Trust Fund? WyoNAHRO’s statewide membership is concerned about the lack of housing and its negative impacts on Wyoming The April 2015 WyoNAHRO Housing Conference was attended by representatives of housing organizations statewide. The conference focused on solutions to the housing shortage. A Wyoming Housing Trust Fund was determined to be the best solution, and WyoNAHRO was selected to lead the effort to create a Wyoming Housing Trust Fund. 8

How Many Housing Units are Needed? Although the current housing need is not specifically known, we do know that: over 2,600 low-income households statewide are waiting for federal housing benefits through a Public Housing Authority The 2015 Homeless Point-in-Time Count reported that 798 people experience homelessness in Wyoming 9

Future Housing Need A recent Housing Needs Forecast prepared by Western Economic Services for the Wyoming Community Development Authority reported that: by 2040 the shortage of housing available to Wyoming households earning 0 to 96+% of Area Median Income* will grow to a need for 16,719 to 38,142 new rental units and 40,530 to 69,453 new homeownership units. 10

What Activities Would be Eligible for WHTF funds? New construction of rental or ownership housing Substantial or moderate rehabilitation to preserve rental or ownership housing, including modifications required to make homes more accessible to individuals with disabilities Predevelopment activities Homeless prevention activities 11

Who Would be Served by the WHTF? The WHTF will target households that meet the following criteria: household income does not exceed 115% of AMI based upon HUD’s annual AMI calculation head of household is a United States citizen that has lived in Wyoming for at least one year at least one household member is employed by a Wyoming employer, disabled, retired, or homeless 12

Who Would be Eligible Recipients? Funding is available to qualified organizations/business entities only, not for individuals. Individuals can access the WHTF only through an eligible entity. Eligibility to access the WHTF is limited to qualified for-profit and non-profit entities, Native American tribes, Housing Authorities, and agencies of local and state government. Preference points will be awarded to qualified Wyoming entities and partnerships with Wyoming non-profit organizations. 13

How Would the WHTF be Administered? WyoNAHRO proposes that the WHTF be administered by an Oversight Commission appointed by an Administering Agency. The Oversight Commission would: Establish with the Administering Agency a points system and review criteria for the evaluation and ranking of proposals Review and approve funding proposal recommendations submitted by the Administering Agency 14

How Would the WHTF be Administered? The Administering Agency would: Receive, review and evaluate proposals Submit funding proposal recommendations to the Oversight Commission Administer annual monitoring and reporting on the fund, which will be reviewed and approved by the Oversight Commission and submitted to the State Legislature Create operating rules and guidelines for the Oversight Commission 15

How Will Applications be Evaluated and Funds Distributed? Evaluation Criteria: Proposals will be evaluated based upon objective review criteria and a point system established by the Oversight Commission and Administering Agency. Distribution of Funds: Funds will be awarded through a competitive process. Applications will be evaluated and scored based on criteria established by the Administering Agency and Oversight Commission. Applicants will be encouraged to leverage WHTF funds with other resources including but not limited to land donations, reduction of City/County development fees, and other forms of local match. 16

What Level of HTF Funding is Needed? If federal housing funds continue at current levels, at least $22,000,000 is needed each year for the next 25 years to address the projected housing need. 17

What are Potential HTF Revenue Sources? State of Wyoming investment required to generate over $22,000,000 per year. Dedicate annually 1% of the Rainy Day Fund (1% of $2,000,000,000 = $20,000,000/year) Principle and interest payments from loans made by the WHTF – “recycled funds” Real estate fees (transfer fees, document recording fees) Government owned property (decommissioned schools, …) Leveraged economic development investments (to encourage businesses to contribute to the WHTF) 18

How Would Wyoming Realize a Return on Investment in the WHTF? Year 1 Investment: The HTF invests $1,250,000 (as a loan) in the construction of a multifamily rental housing development consisting of eight 2 bedroom 1 bath units with an attached garage and fenced back yard; the development site is donated by a local partner. The development serves Wyoming Workers earning up to 115% of Area Median Income; rent is $875/month. The $1,250,000 loan is approved at 2 % interest over a 30 year term, the loan is repaid out of the development’s annual cash flow. The total ROI after 30 years would be $1,663,286; the net gain after 30 years would be $413,286 19

How Would Wyoming Realize a Return on Investment in the HTF? Year 2: The HTF receives its first annual Principle and Interest (P&I) payment of $55,443 for its $1,250,000 Investment in Year 1. The Principle portion would be applied to repay the HTF investment loan, the $24,719 Interest payment could be used to: Pay housing predevelopment costs to a Wyoming nonprofit that would be repaid from Developer Fees if the development is funded and constructed Fund homeless prevention activities Other investments determined by the Administering Agency and Oversight Commission 20

How Would Wyoming Realize a Return on Investment in the HTF? Economic Impact of an 8 Unit Development: According to the National Association of Homebuilders, the economic impact in a typical state of the construction of the 8 unit multifamily development example above would be: Construction generates 7.2 jobs and $1,366,662 income (personal, business and taxes) Ripple Effects During Construction generate 6.48 jobs and $879,060 income (personal, business, and taxes) Ongoing Annual Effects after construction when housing is occupied generates 3.92 jobs and $539,824 income (personal, business, and taxes) National Association of Homebuilders: “The Economic Impact of Home Building in a Typical State, Income, Jobs, and Taxes Generated”, April

Wyoming Should Invest in a WHTF Because: Housing is essential to Wyoming’s economy, and the lack of housing is impeding economic stability and growth Wyoming has relied on federal funds to address its housing need, and federal funds address at most 50% of the current and future need The HTF would be designed to meet Wyoming’s unique housing needs The HTF would finance an increase in the inventory of housing needed by Wyoming’s citizens The HTF would generate a positive Return on Investment 22

Key Points 1.The Housing Trust Fund is in the planning phase 2.The HTF requires Legislative approval. The Proposal is prepared to gain Legislative support. 3.It is a long process, especially when the economy is slowing down. Other states have taken 3 or more years to develop a Housing Trust Fund 4.We must all work together with a common objective to develop ONE Housing Trust Fund for Wyoming. 23

Next Steps for WyoNAHRO 1.Strengthen the Proposal by Defining the current need for affordable housing in each Wyoming County Identifying additional HTF funding sources Quantify the potential amount of funding from funding sources 2.Identify and gain the support of an Administering Agency 3.Promote the strengthened Proposal 24

How You Can Help 1.Support WyoNAHRO - become a WyoNAHRO member 2.Stay informed about HTF progress via Provide feedback about the evolving Proposal Provide letters of support for the HTF when requested 3. Attend the April 21 and 22, 2016 WyoNAHRO Housing Conference 25

HTF Contact Greg Hancock WyoNAHRO President (307)