Proposed Vancouver Affordable Housing Fund

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1 Proposed Vancouver Affordable Housing Fund May 2, 2016 Council Workshop Peggy Sheehan, Community and Economic Development Programs Manager Carrie Lewellen, City Treasurer

2 Overview Background Housing needs Affordable Housing Task Force Proposed Vancouver Affordable Housing Fund Draft Administrative and Financial Plan details Outreach plan Timeline Questions and discussion Vancouver Affordable Housing Fund - 2

3 Housing Needs in Our Community

4 Very Low-Income Renters Emergency declared April 11 th with respect to availability of housing for very low-income households (earning up to 50% AMI) Source: HUD Consolidated Housing Affordability Strategy Vancouver Affordable Housing Fund - 4

5 Vacancy Rate Below 2% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Q Q Q Q Q Q Source: Norris Beggs & Simpson Vancouver Affordable Housing Fund - 5

6 Rapidly Increasing Rents From May 2015 through March 2016, Vancouver was listed as the #1 city in the nation for fastest rent growth. In April 2016, we were #5 in the nation for fastest rent growth. Source: Apartment List National Rent Reports Vancouver Affordable Housing Fund - 6

7 Affordability Challenges for Renters 50% of very low-income renters spend more than half of their income on housing Amount a very low-income household can afford for rent: Actual median rents in Vancouver: $990 for 1-bedroom unit $1,070 for 2-bedroom unit Source: HUD Consolidated Housing Affordability Strategy; Apartment List National Rent Reports Housing Emergency - 7

8 Growing Homelessness Problem 231 people are living on the streets in Clark County (up 12% from last year) An additional 456 people are homeless and living in shelters 432 children in Evergreen & Vancouver School Districts who are homeless and living in motels, shelters or on the street Source: Point-in-Time Homeless Count; Washington State Office of Superintendent of Public Instruction Homeless Student Data Reports Photo: The Columbian Vancouver Affordable Housing Fund - 8

9 Affordable Housing Task Force

10 Affordable Housing Task Force 21 members met from May December 2015 Considered and recommended policy changes to: Protect vulnerable renters Increase the supply of affordable housing 3 renter protection ordinances adopted 14 additional options presented to Council in January Housing Emergency - 10

11 Recommendations High priorities: Amend zoning & development regulations to encourage affordable housing options Strengthen existing Multifamily Tax Exemption Program Enact inclusionary zoning Create an affordable housing fund identified by Council as first option to move forward in 2016 Housing Emergency - 11

12 Proposed Vancouver Affordable Housing Fund: Responding to Our City s Housing Emergency

13 Proposed Vancouver Affordable Housing Fund (VAHF) April 11 th Council directed City staff to develop a plan for a local housing fund Property tax levy (RCW ) identified as the most practical and timely option Purpose: To invest in safe and affordable housing for very low-income families and individuals in Vancouver Vancouver Affordable Housing Fund - 13

14 Draft Administrative and Financial Plan Specifies how VAHF money will be generated and spent Must be approved by Council prior to funds being collected Key components: Proposed property tax levy amount & duration Program objectives & anticipated outcomes Eligible uses of funds Award process Vancouver Affordable Housing Fund - 14

15 Vancouver Affordable Housing Fund Objectives Create and preserve affordable rental and ownership housing units to promote housing opportunities throughout the city Contribute to efforts to end homelessness Collaborate with developers and agencies to promote a variety of housing choices Leverage City investments with other funding sources to maximize impact Vancouver Affordable Housing Fund - 15

16 Proposed Levy Raise $42 million over 7 years for the Vancouver Affordable Housing Fund $6 million annually Based on current properties in Vancouver, this is approximately $0.36 per $1,000 of assessed value Example: For a homeowner with a current assessed value of $250,000, taxes would increase by approximately $90 per year Vancouver Affordable Housing Fund - 16

17 Households Served Very low-income means up to 50% of area median income (AMI): 1-Person Household 2-Person Household 4-Person Household Max. Max. Max. Annual Annual Annual affordable affordable affordable income income income rent rent rent $25,700 $643 $29,350 $734 $36,650 $916 Estimate directly serving 330 households annually with VAHF More households served by leveraging VAHF investments with other funding sources Vancouver Affordable Housing Fund - 17

18 Four Program Areas 1. New affordable rental units 2. Housing preservation 3. Homelessness prevention 4. Homebuyer assistance Vancouver Affordable Housing Fund - 18

19 1. New Affordable Rental Units Two components: Acquisition and construction to build affordable units Rent buy-downs to turn existing market-rate units into affordable units Estimated 48 units per year (336 units over 7 years) Vancouver Affordable Housing Fund - 19

20 Build Affordable Units Acquisition of land or property Construction costs for new rental housing For-profit and non-profit developers Vancouver Affordable Housing Fund - 20

21 Rent Buy-Down for Existing Units Create incentives for developers to provide units for very low-income households Unoccupied existing units in market-rate properties Example: $50,000 to property owner with agreement to rent to very low-income households for 20 years Options: Half grant, half loan Deferred payment loan Vancouver Affordable Housing Fund - 21

22 2. Housing Preservation Rehabilitation of existing multifamily or single-family housing Assistance to ensure continued affordability for publicly subsidized projects with expiring affordability periods Estimated 65 units per year (454 units over 7 years) Vancouver Affordable Housing Fund - 22

23 3. Homelessness Prevention Construction of temporary housing Rental assistance vouchers and supportive services Estimated 214 households served per year (1,500 households over 7 years) Vancouver Affordable Housing Fund - 23

24 4. Homebuyer Assistance Help first-time homebuyers afford down payment costs Lower sales process of home to an affordable level Estimated 6 units per year (42 units over 7 years) Vancouver Affordable Housing Fund - 24

25 Administrative Considerations Dedicated fund that can only serve households earning up to 50% AMI VAHF money could not be diverted to general fund Awards made through annual process in combination with CDBG and HOME process Funding made available as combination of grant/loan for construction & preservation projects; as grant for homelessness prevention 3% set-aside for implementation including staff costs for City and awardees Vancouver Affordable Housing Fund - 25

26 Educational Meetings for Proposed VAHF Plan Provide information on affordable housing and specifics regarding the proposed Vancouver Affordable Housing Fund Series of two-hour meetings in May and June Vancouver Affordable Housing Fund - 26

27 Educational Meetings for Proposed VAHF Plan What is affordable housing Description of a household at 50% AMI Affordable housing needs Affordable Housing Task Force recommendations What is an Affordable Housing fund and how will it be utilized Description of potential ballot measure Vancouver Affordable Housing Fund - 27

28 Timeline May Public outreach June Public hearing & consideration of resolution to place levy on the Nov ballot If resolution passed, ballot title and explanatory statement provided to Clark Co. Auditor s office November Ballot measure put before voters December Deadline to adopt Administrative & Financial Plan January 1, 2017 If measure passed, property tax increase in effect 2018 Funds made available for projects Some funds could be available in 2017 for rental assistance & other existing programs Vancouver Affordable Housing Fund - 28

29 Questions and Discussion Peggy Sheehan, Community Development Programs Manager (360) Vancouver Affordable Housing Fund - 29