1. NALHFA--2013 Annual Conference Mark Ulfers, Executive Director Dakota County Community Development Agency (CDA) mulfers@dakotacda.state.mn.us (651)675-4400 www.dakotacda.org Success Stories in Financing Housing for the Elderly

2. Dakota County Community Development Agency Dakota County CDA: Established in 1971 One of the largest housing and community development program providers in the Minnesota Administers over 30 different programs Area Served: South of Minneapolis-St. Paul 3rd largest county in Minnesota Population: 402,006 21 cities and 12 townships Suburban and rural

3. Why Senior Housing? Senior Need Demographics clear about the wave that was coming Graying of suburbia From 2005 to 2035 in Dakota County: 138% increase in 55+ 245% increase in 65+ Park Ridge Place, Burnsville Crossroads Commons, Lakeville 3 Phases totaling 1,543 units in 26 buildings Phase I 1990-1997 535 units Phase II 1998-2007 600 units Phase III 2008- Present 408 units There are currently 1,220 seniors residing in CDA Senior Developments.

4. Why Senior Housing? Decline in Federal Funding Section 202, Public Housing and Section 8 new construction Lack of state focus on senior housing Minnesota Housing decision to not use Low Income Housing Tax Credits (9%) Lack of private market to address affordability for low/moderate income senior households In 2015, 32.1% of households with head of household ages 75 to 84 will have incomes of less than $25,000 In 2015, 40.4% of households with head of household ages 85 and older will have incomes of less than $25,000

5. Senior Housing Development Program Program developed in 1989 Phase I 1990-1997 = 535 units Phase II 1998-2007 = 600 units Phase III 2008- Present = 408 units First building opened in 1990 26 developments 1,543 units Developments are: Generally three story buildings Mix of 1 and 2 bedrooms Include: underground parking, community room/common space, laundry on each floor, emergency call systems

6. Senior Housing Development Program Maximum income: 1 person household: $45,500 2 person household: $52,000 Rents: Income Based 1 bedroom = 30% of income minimum $373/maximum $686 2 bedroom = 32% of income minimum $549/maximum $869 Fixed Rent 1 bedroom: $566-$586 2 bedroom: $691-$711

7. Senior Housing Development Program Households: 1,417 Individuals: 1,590 77% female/23% male Average age: 75 Average length of residency: 5 years Average income: $21,000

8. The Dakota County CDA created a Common Bond Fund in order to finance the Senior Housing Development Program Rental revenues of all the buildings are pooled to pay the expenses and debt service for all buildings Financing Structure

9. Common Bond Fund – Flow of Funds Note: For the Annual Release Test, first, you must meet debt coverage of 1.10 and then anything in excess of $5,000 is released

10. The Dakota County CDA issues tax exempt bonds, credit enhanced with a general obligation pledge from Dakota County The major source of supplemental revenue to pay debt service is the CDA’s Special Benefit Tax Levy Financing

11. Basic Indenture Requirements Operation– CDA is responsible for paying all operating costs Pledge of Revenues - tax increment, senior levy Insurance requirements – “All risk” property, liability insurance and business interruption insurance Debt service coverage requirements – 1.15 DCR Replacement Reserve requirements - $600/unit/year Operating Reserve requirements – 25% of annual operating costs Net Operating Income average of $200/unit/year

15. Resources Accessed Levy Cash on hand from Senior Levy Ongoing Senior Levy Collections Tax Increment (for equity and debt service) Earnings on bond funds, including fully funded debt service reserves General obligation pledge of the County CDA purchases the land and then contributes it Sources used to purchase land have included CDBG, HOME, TIF, and CDA and/or City General Funds City Waiver of Fees Sales Tax Rebate on construction materials PILOT (Payment in Lieu of Taxes) – 5% of gross shelter rents

16. Questions? For more information: Dakota County CDA 1228 Town Centre Drive Eagan, MN 55123 651-675-4400 www.dakotacda.org