1. The Washington, DC Workforce Housing Land Trust A New Tool Leveraging Funds for Permanent Affordability

2. The Challenge Mayor’s Comprehensive Housing Strategy Task Force: “…a growing middle class is the key to the city’s future vitality… “[The city must] make a major effort to enable middle income working people to find and retain housing they can afford.”

3. The Challenge Shallow Subsidy Permanent Affordability

4. An Answer: Leveraging Funds for Permanent Affordability Highly leverage city funds by using NMTC- enabled private investment In exchange for subsidy enabling them to buy a home, buyers agree to share the appreciation Use a private, non-profit community land trust with a public mission to oversee and implement permanent affordability

5. The Mayor’s Plan: Overview $10MM in City funds leverages: $65MM in private socially responsive investment Creating a $75MM financial pool to develop 1,000 units of permanently affordable workforce housing in the District

6. Leveraging City Funds

7. Open Architecture Pool operated by Land Trust which provides $75,000 per unit in low-interest, non- amortizing subordinate debt Funds made available to non-profit and profit developers Portable: homebuyers may use as a credit towards home purchase

8. Objectives Efficiently support developers of affordable housing 1,000 permanently affordable units Achieve 80% AMI or lower portfolio average Disperse housing units across City Support New Communities, Great Streets, AWC, NCRC Prove success and do it again

9. Sample Home Purchase Land Trust unit with market value of $300,000 Buys home with: – $9,000 down payment – $75,000 interest-only, low-rate loan (repaid at resale) – $216,000 mortgage (72% LTV) Unit affordable at 76% AMI

10. Sample Resale, Year 8 Upon Resale, Seller Receives: – 100% down pymnt, equity in home, improvements – 25% of appreciation – Seller walks with $66K +$19K income tax savings Resale price = – Seller equity + all debt + CLT fees & closing costs – $443 market value sells for $361K – Affordable to family at 77% AMI

11. Subsidy Grows Over Time

12. The Land Trust is: Highly Leveraged – bringing in $29 of private funds for every $1 of public support Highly Efficient – averaging only $10,000 local public subsidy per unit Highly Flexible – offering simple terms to any developer preserving or creating affordable housing, as well as individual homebuyers Easily Layered – works well with HPAP, EAHP and others