Strategic Planning for RAD Conversions. Thursday, April 6, 2017

Transcription

1 Strategic Planning fr RAD Cnversins Thursday, April 6, 2017

2 Presenters Tm Davis, Directr f the Office f Recapitalizatin, Office f Multifamily Husing Prgrams, U.S. Department f Husing and Urban Develpment Shelynda Burney Brwn, Vice President fr Real Estate Develpment, Cmmunity Preservatin and Develpment Crpratin Hllins Huse, Baltimre Fay Twers, Richmnd Chris Hrnig, Partner, Klein Hrnig LLP Mid Atlantic 4 in Baltimre; Cambridge; Hagerstwn Richmnd (Fay Twers and Church Hill), Newprt News, Stauntn Natinal 2

3 Current Status f Prgram Success t Date Evlutin and shifts in emphasis Prspects under Trump/Carsn Expectatins fr PHAs withut current RAD Allcatin 3

4 Objectives Assist peple wh are planning redevelpment effrts using RAD t identify particular prgram aspects that may shape strategic thinking r may be critical path items fr early reslutin. Resurces: Ntice PIH (HA) H , REV 3 HUD RAD Ntice H /PIH Fair Husing/Civil Rights Requirements and Relcatin Requirements 4

5 Fair Husing RAD Fair Husing, Civil Rights and Relcatin Checklist Frnt End Review; Apprval required prir t Financing Plan All new cnstructin Transfers f assistance t an area f minrity cncentratin Reductin f units Changes t unit cnfiguratin Change t ppulatin served Als scrutinized: Relcatin likely t exceed 12 mnths Cnversins invlving new cnstructin r substantial alteratin 5

6 Fair Husing (Cnt.) Site and Neighbrhd Standards HUD may apprve new cnstructin in an area f minrity cncentratin, cnsistent with the regulatry requirements cited abve, prvided that: the new cnstructin is lcated in a neighbrhd experiencing significant private investment that is demnstrably imprving the ecnmic character f the area (a revitalizing area); r there are sufficient cmparable husing pprtunities in areas utside f minrity cncentratin. N autmatic exceptin fr n site replacement 6

7 Mapping Characteristics f Cnverting Prject t New Prject ( Cvered Prject ) Cnversins may nt result in reductin f assisted units Exceptins: De minimis reductin f 5% Where reductin allws PHA t mre effectively r efficiently serve assisted husehlds (needs HUD apprval) N cap n RAD units in prject (Ntice 1.6.A.2) HUD will apprve unit reductin r recnfiguratin fr gd cause, i.e. changing demgraphics But, existing tenants must be served unless they agree t accept Alternative Husing Optins 7

8 Tenant Right t Return Any public husing r Sectin 8 tenant that may need t be relcated temprarily t facilitate rehabilitatin r cnstructin has a right t return t an assisted unit at the Cvered Prject nce rehabilitatin r cnstructin is cmplete. Rule applies t RAD and nn RAD units in Cvered Prject, e.g. PBV units that RAD tenants mve t (Ntice 1.6.C.1 & 1.7.B.1) If prpsed prject wuld preclude resident frm returning (i.e., due t changes in bedrm distributin, reductin f assisted units, incme eligibility requirements, etc.), resident must be given pprtunity t cmment and/r bject If tenant bjects, PHA must alter prject plans t accmmdate resident s right f return (but resident can prvide infrmed, written cnsent f chice t vluntarily and permanently relcate) 8

9 Tenant Right t Return (cnt.) Planning fr Uncertainty Develper may have uncertain tenant prfile befre clsing, and/r may nt knw intentins f LIHTCineligible tenants Generally, HFA and investrs want develper t be cnservative in setting LIHTC Applicable Fractin HFA shuld be willing t amend extended use agreement and increase qualified units at placement in service; will trigger upward adjusters 9

10 Relcatin HUD RAD Ntice H /PIH Fair Husing/Civil Rights Requirements and Relcatin Requirements Specific Types f Mves and Relcatin Requirements Mves within same building r cmplex f buildings Nt cnsidered relcatin under RAD, and nt typically displacement under URA PHA/Owner must reimburse residents fr all reasnable ut f pcket expenses (temprary r permanent relcatin) 10

11 Relcatin (cnt.) Temprary relcatin lasting 1 year r less Temprary husing must be decent, safe and sanitary Resident must be reimbursed fr all reasnable ut f pcket expenses, including mving expenses, increased husing csts (rent, utilities), and meals if husing lacks cking facilities Temprary relcatin anticipated t last mre than 1 year PHA/Owner must prvide initial ptin f either temprary relcatin and right f return t RAD prject with relcatin assistance, r permanent relcatin with relcatin assistance under RAD equal t that f displaced persn under the URA 11

12 Relcatin (cnt.) Permanent mves in cnnectin with a transfer f assistance Where transfer f assistance t a new site, relcatin f residents frm previus site t new site is nt itself invluntary permanent relcatin under RAD (which is prhibited), but URA, and/r Sectin 104(d) may apply Residents are als eligible fr RAD temprary relcatin assistance/ payments 12

13 Relcatin (cnt.) If distance frm ld site t new site is significant and it is nt reasnable t require residents t mve t new site, then PHA must adjust prject t accmmdate resident in an assisted unit (public husing unit, PB Sectin 8, r market unit with HCV) within reasnable distance f the ld site (applied n a case by case basis) But can als be satisfied by resident acceptance f alternative husing ptin 13

14 Relcatin (cnt.) Alternative Husing Optins PHA/Owner can ffer alternative husing ptins s lng as resident s right t return is preserved at all times prir t resident s vluntary chice t permanently relcate All similarly situated residents must be given the same ffer f alternative husing ptins PHA/Owner must ensure resident decisins are fully infrmed, vluntary and carefully dcumented PHA/Owner may nt prpse resident waive relcatin rights r entitlements t URA/Sectin 104 in cnnectin with alternative husing ptins Ntice and Dcumentatin Requirements 14

15 Transfers f Assistance RAD Jargn fr: Transfer frm Cnverting Prject t Cvered Prject n different, nn adjacent site Later vluntary transfer similar t 8(bb) where prject ceases t be desirable husing Fllwing default and HAP terminatin New Cnstructin Agreement in lieu f AHAP 15

16 Transfers f Assistance (Cnt.) Chice between cnverting at clsing r at placement in service If cnvert at placement in service, tenants remain n public husing leases and can: cntinue t reside in place mve t ther public husing Be relcated with vucher If cnvert at clsing, tenants sign Sectin 8 lease fr unbuilt unit Temprary husing using pass thrugh lease In current unit r ff site Ability t temprarily huse tenants in public husing under passthrugh lease Investr cncerns Issues in Cmpleting Cnversin Fay Twers example need t sign HAP and begin lease up befre all units cmpleted 16

17 Amunt f RAD Operating Subsidy Default Rule Subject t FMV and reasnability limits, RAD rent will be equal t attributable public husing perating subsidy and capital funding f Cnverting Prject Ability t reallcate subsidy frm ther prjects Rent Bundling r MTW Fungibility Cnversin f future RHF r DDTF funds t perating subsidy (Ntice 1.5.A) 17

18 PHA Rle in Ownership PHA r Nnprfit must have wnership r cntrl Where GP is a nnprfit, there is n HUD requirement f PHA cntrl Implicatins fr Virginia LIHTC applicatins 18

19 Real Prperty Taxatin and Abatements RAD prject may nt be cvered by PHA s statutry exemptin and Cperatin Agreement Need fr PILOT Agreement 19

20 Early Starts (Relcatin, Demlitin, etc.) PHAs limited t spending $100,000 f Capital Funds n predevelpment csts Cnverted Pending Transfer Agreement 20

21 Develper Fees In LIHTC transactins, the develper fee will be subject t the LIHTC allcating agency s limitatins n develper fees. The undeferred prtin f such develper fee (as dcumented in the LIHTC cst certificatin) may nt, withut HUD apprval, exceed the greater f: percent f the ttal develpment csts less acquisitin payments made t the PHA, develper fee and reserves. 2. The lesser f $1,000,000 r 15 percent f the ttal develpment csts withut ffset fr acquisitin payments made t the PHA, develper fee and reserves. 21

22 Special Situatins Energy Perfrmance Cntracts, CFFP, etc. may nt be n title, but must be reslved Cnversin applies nly t units and necessary land; excess land r units that are nt being replaced require Sectin 18 apprval fr demlitin/dispsitin 22