stewardship for lasting affordability
DESCRIPTION
To preserve the affordability of homeownership units, someone must play an active stewardship role.TRANSCRIPT
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Stewardship for Lasting Affordability Administration and Monitoring of Shared Equity Homeownership
Rick Jacobus Burlington Associates in Community Development
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Stewardship Functions
Frates Square, Housing Land Trust of Sonoma County
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Stewardship Functions
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Stewardship Functions
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Potential AgentsWho holds key responsibilities?
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Minimal AdministrationNo Designated Steward
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Santa Barbara CountyLocal Government as Steward
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City of SalinasDevelopers Hire Private Contractor
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Lafayette, COCity Hires Private Contractor
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City of Palo AltoCity Contracts with Nonprofit
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Tri-Valley HousingLocal Governments Form Nonprofit
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Chapel HillCommunity Land Trust as Steward
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Staffing and Revenue
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MunicipalityShared Equity
Ownership UnitsEstimated staffing
(FTEs)Est. Units/FTE
Somerville, MA 41 2.5 16.4
Lafayette, CO 70 0.75 93.3
West Sacramento, CA 80 3 26.7
Palo Alto, CA 169 1.25 135.2
Housing Assistance Council of Cape Cod 250 0.25 1000.0
Boston, MA 400 3 133.3
Santa Barbara, CA 453 1 453.0
Bedminster Township, NJ 680 1 680.0
Denver, CO 700 1 700.0
Fairfax County, VA 1400 3 466.7
Montgomery County, MD 1976 6 329.3
NJ Housing and Mortgage Finance Agency 5000 10 500.0
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Economies of Scale
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Common Revenue Sources
• Local Government General Funds• Local Housing Funds• Application Fees• Refinance Fees• Marketing Fees from Developers• Resale Fees from Homeowners• Admin Fees/Ground Rent• Grants/Fundraising
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Scalable Revenue
• Marketing Fees
• Resale Fees
• Admin Fees
Grows with Portfolio
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Marketing Fees
• Workforce Housing Association of Truckee Tahoe– 3% of Affordable Sales Price
• Housing Land Trust of Sonoma County– $7,000 per unit
• City of Somerville, MA– $2,500 per unit
Traditional Realtor Commission = 6% of price
Charged to Developers at Initial Sale
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Resale Fees
• Palo Alto – included in annual fee for service contract with City
• Tri Valley Housing Opportunity Center– $1,000 per sale (no marketing)
• Santa Clara, CA -NHS – ~$10,000 per sale (with marketing)
• State of New Jersey – 3% of Affordable Sales Price (with marketing)– 1.25% of Affordable Sale Price (without marketing)
Charged to Homeowners at Sale
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Admin Fees
• Community Land Trust Ground Lease Fees– $20 - $100 per unit per month
• City of Chicago/Chicago CLT– “Covenant Fee” $25 per unit per month
• Urban Homesteading Assistance Board– Co-op Monitoring Fee $1,500 – 4,500 per
co-op building per year
Charged to Residents Monthly/Annually
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Stewardship Costs
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Sample Program Costs
Palo Alto - PAHC– $140,000/ 169 units ($828/unit)
• San Jose - NHS– $60,000/~ 125 units (~$500/unit)
• Montgomery County, MD – $400,000/1,976 units ($202/Unit)
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Stewardship Costs
• We don’t have enough information to know what the right range of costs should be!
• Many programs are very significantly under funded
• Costs per unit seem to drop with volume (ie. There are significant economies of scale)
• Costs seem to increase with subsidy levels
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Stewardship Costs
High Cost Lower CostMarket House Price 500,000$ 250,000$ Average Affordable House Price 325,000$ 150,000$ Value in Trust 175,000$ 100,000$
Budget for 300 Unit Program 240,000$ 135,000$
Stewardship Cost Per Unit 800$ 450$ Cost as % of Value in Trust 0.46% 0.45%
*Hypothetical values only
Relative to “Value in Trust”