Civic San Diego Affordable Housing Master Plan

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1 Civic San Diego Affordable Housing Master Plan San Diego Housing Commission April 12, 2013

2 Affordable Housing Master Plan Guiding Principles 1. Maximize quality unit production with limited resources 2. Homeless housing 3. Maximize leverage with other funding sources 4. Development of affordable housing on real properties retained by Housing Successor Entity 5. Geographic diversity Fund projects City-wide 6. TOD Fund projects with proximity to public transit 7. Catalyst for neighborhood investment 8. Sustainability 9. Allow for flexibility 10.Competitively bid to select development partners 11.Use conservative assumptions 2

3 Basic Components of Plan 1) Properties 2) Housing Bond Proceeds 3) Revenues from Property Sales 4) Investments in New Housing Production 3

4 Affordable Housing Master Plan Real Estate Assets 22 properties in downtown and Southeastern San Diego - 9 properties have existing affordable housing with affordability covenants and long term ground leases - 1 property (Market Street Square) with existing housing with expired covenants with long term ground lease (currently under negotiation with owner for sale of land) - 12 properties available for future developments 4

5 Affordable Housing Master Plan Properties Available for Future Developments Of 12 properties available for future developments: 5 downtown sites, including 50% of 13 th and Market site, are planned to be sold at market-rate to private developers for mixed-income, mixed-use projects RFQ/Ps will be issued to solicit proposals Developers will be required to include at least 15% of total housing units for low/moderate income households Sales proceeds will be deposited to Housing Asset Fund to be used for future affordable housing projects Remaining 8 sites, including 50% of 13 th and Market site to be retained for future affordable housing developments 5

6 HOUSING ASSET FUND 5-Year Projections Revenues and Expenditures 6

7 Housing Asset Fund Affordable Housing Bond Proceeds Former Project Area Balance North Park $2,580,000 Southeastern SD $1,407,000 North Bay $1,846,000 City Heights $3,542,000 Centre City $16,560,000 Horton Plaza $277,000 NTC $2,959,000 Crossroads $3,700,000 TOTAL (City-wide) $32,871,000 NOTES: City Heights and Southeastern SD communities previously expressed expectations for the bond proceeds generated in their project areas be spent within their neighborhoods. The funds will be set aside for those communities. 7

8 Housing Asset Fund Loan/Ground Lease Payments & Other Program Incomes Loan Repayments/Ground Lease Payments FY2013 FY2014 FY2015 FY2016 FY2017 TOTAL $450K $492K $535K $620K $748K $2.8M Rental/Other Income $1.4M $959K $269K $30K $30K $2.7M Property Management Costs ($45K) ($45K) ($45K) ($45K) ($45K) ($225K) Reserve ($189K) ($154K) ($119K) ($85K) ($98K) ($645K) Cost Savings $850K $850K TOTAL REVENUES $2.5M $1.3M $640K $520K $635K $5.5M 8

9 Housing Asset Fund Projected Land Disposition Proceeds FY2013 FY2014 FY2015 FY2016 FY2017 TOTAL Market St. Square $6.0M $6.0M 7 th & Market $8.3M $8.3M Park & Market $6.5M $6.5M GSA $3.4M $3.4M Popular Market $1.6M $1.6M 13 th &Market (Half) $0.7M $0.7M Hotel Metro $1.1M $1.1M Gross Proceeds $21.5M $1.6M $3.4M $1.1M $27.6M Civic SD 4% Fee $859K $64K $135K $45K $1.1M Net Proceeds $20.6M $1.5M $3.2M $1.1M $26.5M 9

10 Civic SD 4% Transaction Fees For land sales for mixed-use developments, charge transaction fee equal to 4% of gross sales prices Estimated total fees earned during 5-year plan period - $1.1 M The fees are proposed to fund various housing efforts, such as the following examples: 1. Creation of public/private TOD investment fund w/ emphasis on affordable housing; 2. Enhanced planning in urban neighborhoods to facilitate TOD and affordable housing; 3. Work with state representatives to sponsor new state legislation that supports funding for affordable housing, economic development and neighborhood infrastructure; 4. Collaboration with other local governments to create a permanent local funding source for affordable and homeless housing; and 5. In collaboration with local financial institutions, establish a financing mechanism for rehabilitation of SRO s, satisfying Community Reinvestment Act objectives. 10

11 Housing Asset Fund Administrative Costs Housing & Homeless Admin (Civic SD Staff time) Legal/Consultant Costs FY2013 FY2014 FY2015 FY2016 FY2017 TOTAL $275K $550K $550K $550K $550K $2.5M $200K $200K $200K $600K Homeless Consultant $100K $100K $100K $300K Total Admin. Costs $275K $850K $850K $850K $550K $3.4M Note: Total Admin. Costs is 5.2% of total projected asset value. 11

12 Funds Available for Affordable Housing Developments Unencumbered Bond Proceeds Revenues from Housing Assets Net Land Disposition Proceeds FY2013 FY2014 FY2015 FY2016 FY2017 TOTAL $32.9M $32.9M $2.5M $1.3M $640K $520K $635K $5.5M $20.6M $1.5M $3.2M $1.1M $26.5M Less Admin. Costs ($275K) ($850K) ($850K) ($850K) ($550K) ($3.4M) Total Available for Affordable Projects $35.1M $21.0M $1.3M $2.9M $1.2M $61.5M 12

13 Proposed Affordable Housing Projects FY2013 FY2014 FY2015 FY2016 FY2017 TOTAL Subsidies for Projects on City-owned properties $ 40.5M Atmosphere $12.2M $ 12.2M 13 th & Market (50%) $ 17.2M $ 17.2M Hilltop & Euclid $2.0M $ 2.0M Ouchi Site $ 0.72M $ 0.72M Imperial $ 0.4M $ 0.4M 40 th & Alpha $ 0.48M $ 0.48M Monarch Site $ 7.5M $ 7.5M 13 th & Broadway $ 0 Subsidies for Other Projects $ 4.8M Churchill $ 3.0M $ 3.0M VVSD V $ 1.8M $ 1.8M City-wide NOFA $8.0M $7.1M $ 15.1M TOTAL USE $12.2M $31.1M $8.0M $9.1M $0 $60.3M BALANCE $22.9M $12.9M $6.2M $0 $1.2M 13

14 City-wide NOFA Ensure geographic diversity Potentially in collaboration with SDHC and other local funding partners A total of $15M available in FY2015 and FY 2016 Objectives and selection criteria to be determined Emphasis on affordable housing with units targeted for the homeless population (minimum 40% of units projected) 15% of units to be set aside as supportive housing $3.5M will be set aside for City Heights 14

15 City of San Diego Where are the gaps larger populations of unsheltered homeless and no housing? 400 unsheltered ,049 unsheltered unsheltered 2, unsheltered 78 15

16 Affordable Housing Units Targeted for the Homeless population Type of units for the formerly homeless & at-risk population: 1) Supportive housing units w/ intensive supportive services (require service funding) 2) Extremely low-income studios/living units w/ minimum services for population w/o severe disabilities (in combination with rental vouchers) Could be provided in new developments or through acquisition & rehabilitation of existing vacant and/or underutilized apartment/motel complexes Consider addressing need for interim/transitional housing and emergency shelters 16

17 Possible Reestablishment of Other Housing Programs If actual revenues exceed expectations or actual investments in projects are less than projections, the additional proceeds could be invested in: - HELP Program - Transitional Housing Program for Homeless Seniors 17

18 Affordable Housing Master Plan Estimated Affordable Housing Production Low/Mod units in mixed-income housing developed by market-rate developers on Housing Assets (not subsidized by HTF) Low/Mod units in affordable and mixedincome housing developed on Housing Assets (subsidized by HTF) Other affordable housing projects City-wide subsidized by HTF # of Low/Mod Units 285 # of Homeless Housing TOTAL 1, Does not include pipeline projects (Connections Housing, 9 th & Broadway or COMM22). 18

19 Questions

Civic San Diego Affordable Housing Master Plan

Civic San Diego Affordable Housing Master Plan San Diego Housing Commission Board Workshop February 15, 2013 Redevelopment Dissolution Redevelopment agencies eliminated on February 1, 2012 Tax Increment