1. The Complexity of Supportive Housing Carla B. Pope Director, Affordable Rental Production

2. Benefits of the LIHTC Combines both private sector and public funding partnerships Provides a significant amount of equity in the project (approximately 65% of total project costs) Is the primary federal housing programs created Can be used with other Federal and private funding sources Combines both private sector and public funding partnerships Provides a significant amount of equity in the project (approximately 65% of total project costs) Is the primary federal housing programs created Can be used with other Federal and private funding sources

3. LIHTC Process Allocation QAP Application Threshold/Scoring 9% Competitive Round 4% Non-Competitive Tax Exempt Bonds Carryover Agreement 9% Credit Official Allocating Document between IRS and State Agency Necessary to obtain for Syndication Project has 2 years to place in service 4% Credits do not have a carryover or 10% test. A letter and when bonds are sold starts 2 year period to placed in service 10% Test for 9% Credit IRS Requirement to ensure building process can be completed within timeframe. IRS Form 8609 Low-Income Housing Credit Allocation and Certification Provides IRS details of project Part 1 Completed by State Agency Part 2 Completed by the Ownership Entity Moves project from Allocation to Compliance Department Compliance …

4. Compliance Process Household Income, Assets, & Student Status File Compliance Project, Building, & Unit UPCS (HUD Uniform Physical Condition Standards) Physical Inspection Compliance Initial 15 year compliance period reportable to the IRS Extended Use Period of 15 Years

5. General LIHTC Requirements Available for use by the General Public Must follow Fair Housing Laws Must follow Landlord-Tenant Laws Good cause evictions

6. General Public Use Does not fail to meet general public use solely because of occupancy restrictions or preferences that favor: –Tenants with special needs –Who are members of a specified group under a Federal program or state program or policy that supports housing for such a specified group

7. Marketing of Units to General Public Owners must make reasonable attempts to make vacant low-income units available to the public for rent Should advertise the availability of vacant units using advertising methods designed to be accessible to all prospective tenants

8. Fair Housing Act Unlawful to discriminate in any aspect relating to the sale or rental of dwellings, or in the provision of services and facilities in connection with because of race, color, religion, sex, disability, familial status, or national origin (may be other state or local protected classes, such as marital status) May affirmatively market to a protected class; must serve all within that protected class Can maintain separate waiting lists

9. Example Can develop an SRO that provides supportive services to treat mental health conditions Cannot require a tenant to accept services If services are mandatory, the maximum allowed rent must include the cost of services Can preference residency for people with disabilities, but must allow residency to anyone with a disability (cannot restrict to those with mental illness only) Can select from a waiting list for people with disabilities prior to serving general public

10. Layering Tax Credits with Other Programs Need to gain compliance knowledge for all programs involved in the project. Use most restrictive rules from each program to meet compliance of all programs involved. Identify conflicts in program rules. Need to gain compliance knowledge for all programs involved in the project. Use most restrictive rules from each program to meet compliance of all programs involved. Identify conflicts in program rules.

11. Non-Transient Tenancy Tax credit program was not designed to house the homeless on a transient basis (not a homeless shelter) All Leases must be 6 month in length, the only exceptions: –Transitional Housing for the Homeless Exclusively to facilitate transition of homeless persons. Which a non-profit or governmental programs provides support assisting such individuals in locating and retaining permanent independent housing within 24 months. –Single Room Occupancy (SRO) Which permit the sharing of kitchen, bathroom, and dining facilities and at least a month-to-month lease is acceptable. Tax credit program was not designed to house the homeless on a transient basis (not a homeless shelter) All Leases must be 6 month in length, the only exceptions: –Transitional Housing for the Homeless Exclusively to facilitate transition of homeless persons. Which a non-profit or governmental programs provides support assisting such individuals in locating and retaining permanent independent housing within 24 months. –Single Room Occupancy (SRO) Which permit the sharing of kitchen, bathroom, and dining facilities and at least a month-to-month lease is acceptable.

12. YMCA Supportive Housing Existing SRO no longer met fire codes and could not retain property insurance Location was not congruent with city’s community development efforts Transitional housing served men only; dormitory style with shared bathrooms; cafeteria provided meals onsite; tenants using alcohol or drugs were turned away on a daily basis

13. YMCA Supportive Housing Agency concerns –Syndication of credits –Fair Housing issues –Covering ongoing operational costs

14. How YMCA Addresses Issues Found local investors to purchase tax credits Sought opinion from Fair Housing office –Must serve both men and women –Can be a dry campus, but must follow landlord-tenant laws Give appropriate notice if tenant fails to follow “dry” policies (30 days notice, unless poses a risk to the safety of others)

15. How YMCA Addresses Issues Creates a privately funded rent subsidy program so that tenants do not have to pay more than 30% income towards rent VASH vouchers Shelter plus care vouchers Supportive housing program funds Project-based Section 8 vouchers

16. YMCA Supportive Housing 140 efficiency apartments with kitchenette and bathroom in each apartment; high speed internet access is each room Exercise room Laundry room Library Computer room Cafeteria/Dining Room

18. Sources of Funds Private mortgage: $1,916,801 Section 1602 grant: $5,734,458 Local housing trust fund: $50,000 Enterprise Zone Tax Credits: $145,000 Owner equity: $800,000 Investor equity (LIHTC): $5,735,000

19. Use of funds Total costs: $14,381,259 –Hard construction costs: $9,531,219 –Professional fees: $669,862 –Interim costs: $234,000 –Financing fees:$26,000 –Soft costs: $169,551 –Syndication costs: $75,000 –Developer’s fees: $1,845,000 –Operating reserve: $525,000

20. Debt Service Year One: 1.636 Year Five: 1.634 Year Ten:1.632 Year 15:1.331

21. Occupancy to Date As of September 1, 2011, project is 84% occupied Challenges: transitioning tenants from existing property to new one; students; meeting requirements of multiple subsidies while maintaining tax credit compliance Keys to success: Communication & Cooperation