innovations in affordable housing: indiana’s general set-aside matt rayburn october 6, 2015

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Innovations in Affordable Housing: Indiana’s General Set- Aside Matt Rayburn October 6, 2015

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Page 1: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

Innovations in Affordable Housing:

Indiana’s General Set-Aside

Matt RayburnOctober 6, 2015

Page 2: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

OVERVIEW

• IHCDA’s QAP has historically reserved 10% of its annual tax credits as a discretionary set-aside for projects that further the agency’s mission and priorities, known as the “General Set-aside.”

• In 2014, IHCDA piloted a new initiative to use the 10% General Set-aside to promote innovative housing concepts.

• The Innovation Round was created, encouraging developers to submit proposals for unique developments that would be at a competitive disadvantage in the regular round.

• Final decisions not based on score, but a subjective, non-scoring evaluation of the quality of the innovation.

• Three innovative developments awarded credits in August 2014.

Page 3: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE PROCESS

• In November 2013, IHCDA issued a Request for Letters of Intent for innovative housing concepts that would be a first of its kind in Indiana but also replicable.

• Submissions were due in February 2014.

• Projects evaluated based on the following criteria:• Uniqueness of the project concept• Ability to address an unmet need• Contribution to IHCDA mission and goals• Reasonableness of scope• Financial viability• Extent to which the project would be at a competitive disadvantage in a

competitive round based on score• Demonstrated capacity of the development team to complete the proposed

activity

Page 4: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE PROCESS

• IHCDA staff reviewed the LOIs and divided them into three tiers:• Tier 1: Most unique and innovative• Tier 2: Unique and innovative components• Tier 3: Did not present a strong innovative component or demonstrate why the

project would not be competitive in a regular round

• Five Tier 1 proposals were selected as finalists and invited to submit a full tax credit application to IHCDA by July 1, 2014.

• Each project hosted a two-hour site visit in late July.

• IHCDA invited an external committee of four industry peers to accompany IHCDA on the site visits and to make final funding recommendations.

Page 5: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE PROCESS

• External committee consisted of the following individuals:• A member of IHCDA’s Board of Directors• The head of statewide disability advocacy network• The executive director of an Indiana CDFI• A representative from another HFA

• Following the site visits, each IHCDA staff member and external committee member ranked the five projects.

• Replicability of innovation• Replicability of financing structure• Outcomes/alignment with IHCDA strategic priorities• Chances for success based on prior deals elsewhere• Verifiability/quality of indicators of success• Sustainability of ancillary programs/features/amenities

• A consensus was reached based on availability of credits and the top three developments were awarded credits.

Page 6: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE DEVELOPMENTSMain Street Cottages (Princeton)

•20 units of new construction•High quality modular construction as a means of cost containment•Stacking modular units to create multi-family housing•Decrease constructions costs and time, delivering credits more quickly and attracting better equity pricing•Site visit included a tour of the modular home factory

Page 7: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE DEVELOPMENTSOxford Place Senior Apartments (Indianapolis)

•30 units of new construction•First energy positive housing development in the State of Indiana •Solar panels, geothermal systems, and other energy efficient design•No electricity cost for owner and tenants; sell electricity back to the grid•Increased affordability; higher annual budget for ongoing tenant services and programming

Page 8: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE DEVELOPMENTSSouth Bend Mutual Homes (South Bend)

•24 single family homes•First cooperative model in a Section 42 property in Indiana•Residents will elect Board of Directors to make decisions about property operations•At completion of year 15, property will be transferred from the tax credit ownership to the 501(c)(3) cooperative organization•Commitment to work with a local university to study the ongoing impact of this model on the tenants and the neighborhood

Page 9: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

THE FUTURE

• Innovation Round conducted again in 2015

• Two projects selected in August•Mixed use building that combines housing with a grocery store in an area designated as a food desert•Shared living senior development that voluntarily allows seniors to use a matchmaking program to identify potential roommates to increase social interaction and decrease living costs

• 2016-2017 QAP – Continued Commitment to Innovation•10% set-aside to continue, with a notice released each year with timeline and requirements•2016 Innovation Set-Aside will focus on providing energy efficient affordable housing and transportation (www.in.gov/ihcda/movingforward.htm)

Page 10: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

CONCLUSION & LESSONS LEARNED

• Positive reaction from the development community

• Competition based on points can hinder creativity and innovation

• Importance of external advisory committee

• Shaping of future QAP and priorities

• Greater unknown, but not a bad thing

Page 11: Innovations in Affordable Housing: Indiana’s General Set-Aside Matt Rayburn October 6, 2015

RHTC INNOVATION ROUND

THANK YOU

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

MATT RAYBURN- CHIEF REAL ESTATE DEVELOPMENT OFFICER

E-MAIL: [email protected]