best practices in workforce and mixed income housing
DESCRIPTION
2010 ULI Fall Meeting PresentationOctober 15, 201011:00 am to 12:15 pmTRANSCRIPT
Best Practices in Workforce and Mixed-Income
Housing
Friday,
October 15
11:00 a.m. – 12:15 p.m.
FINANCIAL PARTNERS
RBS Citizens Bank NH Community Loan Fund
Bowdoin Charitable Trust for Housing Creation
NH Housing Finance Authority PNC Bank
Town of Hanover Grafton County
DEVELOPERS
BACKGROUND
• Regional housing shortage
• High-cost town
• Sustained advocacy effort for work force housing
• Town meeting vote
• Donated land
PROGRAM CONSTRAINTS
• 50% Affordable up to 100% of AMI • Mix of for sale and rental homes
PROJECT TIMELINE
• Town Meeting votes – 2001 + 2002 • Site plan application – Fall, 2005 • Site plan approval – January, 2007 • Construction start – September, 2007 • Delivery of first buildings – November, 2008…
Total units Planned: 120 • Rentals – 61 units(all complete) • Affordable Rental: 46 (LIHTC) • Market rentals: 15 (all workforce- no
restrictions) • Condos – 59 units (36 complete) • Market above workforce: 23 • Market workforce: (no restrictions): 22 • Income-restricted workforce: 14
LESSONS LEARNED 1. Workforce Housing Works
– Public Acceptance
– Market Acceptance
– Successful Public Policy
2. Resist Complexity
3. Beware and Be Vigilant when Ignoring #2 - Deviations from the norm require extreme preparation
4. Mission-based lenders can play a key role
5. Perceived quality critical in overcoming market skepticism
6. Don’t try to save on affordable unit finishes
7. Do be strategic about location/view decisions
8. Affordable rental development experience does not equate to affordable for sale experience
***
2010 ULI FALL MEETING AND URBAN LAND EXPO
October 15, 2010
Best Practices In Workforce And Mixed-Income Housing
RENAISSANCE SQUARE
ENTERPRISE HOMES
• Create homeownership and rental
opportunities for families from all walks of life
• Develop affordable workforce and market-
rate housing
– Affordable at 30-60% area median income
– Workforce homeownership at 60-120% area median income
– Market-rate homeownership
• Created over 5,000 homeownership and
rental residences for families and individuals
of diverse income, age, and culture
RENAISSANCE SQUARE
DEVELOPMENT OVERVIEW
• 18 Acres
• Former failed FHA Section 8: 300+ units
• HUD/County Property Control
• Community Charette led by Baltimore County and Design Collective
• Pattern Book
• RFQ/RFP Issued by Baltimore County 2006
• Contract Awarded 2007
• Contract Signed October 2008
• Closed Financing – 1st Quarter of 2009
RENAISSANCE SQUARE
RENAISSANCE SQUARE
RENAISSANCE SQUARE
DEVELOPMENT
• 196 units – 81 senior LIHTC
– 115 Ownership
• 65 Renaissance Credit
• 50 Market
RENAISSANCE SQUARE
SITE PLAN
RENAISSANCE SQUARE
FINANCING
• Susquehanna Bank
• Maryland DHCD
• Baltimore County
• Enterprise Green Communities
• Enterprise Community Investment, Inc. LIHTC
Total Development Cost: $11,715,000
81 Senior Apartments
RENAISSANCE
SQUARE WORKFORCE
OWNERSHIP • 115 Homes
– 65 Renaissance Credit • (60%-115% AMI)
– 50 Market • Four Housing Types
– Townhouse 1400 s.f.
– Cottage 1500 s.f.
– Manor 1900 s.f.
– Villa 2500 s.f. • Pricing
– $224,375 - $300,000
– $280,000 - $350,000
RENAISSANCE SQUARE
WORKFORCE OWNERSHIP
• County Contributions – Land
– $4 million Infrastructure
• Developer Contributions – $2.1 Million Renaissance
Credit
RENAISSANCE SQUARE
WORKFORCE OWNERSHIP
Construction Financing
Susquehanna Bank Revolving Line $3,000,000
Baltimore County $4,131,802
Developer Equity $2,100,000
Total Development Costs $27,472,973
RENAISSANCE SQUARE
INCOME STRATIFICATION
• 10 HOMES 60-70% AMI
• 10 HOMES 71-80% AMI
• 15 HOMES 81-90% AMI
• 15 HOMES 91-100% AMI
• 7 HOMES 101-107% AMI
• 8 HOMES 108-115% AMI
RENAISSANCE SQUARE
DEED RESTRICTIONS
• 15-year re-sale restriction to affordable buyer
• Year 1-5 – Down Payment
– Equity/Improvements
• Year 6-15 – Down Payment
– Equity/Improvements
– After year 5 Equity = 10% per year of Renaissance Credit
RENAISSANCE SQUARE Renaissance Credit Permanent Financing
70-80% AMI*
Sale Price $225,500
Estimated Closing Costs $ 15,575
Total Needed to Close $241,075
Cash Down $ 2,255
First Mortgage $166,503
Renaissance Credit Second Mortgage $ 72,317
*Income: Family Size of 4 = $64,000
(Presumed Interest Rate: 4.75%/30 years, no mortgage insurance)
RENAISSANCE SQUARE BUYER PROFILE
• 26 CONTRACTS
• 19 SETTLEMENTS
LOW HIGH MEDIAN
INCOME $39,000 $200,000 $67,000
HH SIZE 1 4 2.6
EMPLOYER PUBLIC = 62%
PRIVATE = 38%
RENAISSANCE SQUARE
2005
• Land Costs
• Construction Costs
• Skyrocketing Pricing
2010
• Market, Market, Market!
• Credit Scores/Eligibility
• Financing
WORKFORCE HOUSING CHALLENGES