Developing Affordable Housing in Fragile and Transitional Markets. Community Building and Partnership in Housing

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1 Developing Affordable Housing in Fragile and Transitional Markets Community Building and Partnership in Housing World Bank Presentation June 9, 2011 Leslie Steen Wesley Housing Development Corporation established 1974 WESLEY HOUSING DEVELOPMENT CORPORATION Develop, own, operate, preserve, and maintain affordable housing and sustain quality communities for low- and moderate-income individuals Developed, preserved 23 communities Served over 15,000 Northern Virginians 3 Community Resource Centers 3 Resident Services Centers 1

2 Our Work Our Geographic Footprint: The high cost rental market of metropolitan Washington, DC The amount of affordable housing within reach of moderate-income earners plummeted from 64% in 2000 to just 7% in 2005, with thousands more affordable units lost since then. FRAGILE AND TRANSITIONAL MARKETS What is a Fragile or Transitional Market? No investment from the private sector High concentrations of poverty Dilapidated housing Housing of last choice No opportunity for the residents to improve their economic standing 2

3 DEVELOPING HOUSING IN FRAGILE OR TRANSITIONAL MARKETS LESSONS LEARNED: CAN ONLY OCCUR AND BE SUSTAINABILE THROUGH COMMUNITY REVITALIZATION LEADING TO INCREASED INVESTMENT BY THE PRIVATE SECTOR AND ECONOMIC DEVELOPMENT FOR THE RESIDENTS OF THE COMMUNITY DEVELOPING HOUSING IN FRAGILE OR TRANSITIONAL MARKETS = COMMUNITY REVITALIZATION Coordinated government intervention across multiple agencies on large scale De-concentration of densities of low income households Government incentives provided to attract private sector participation Citizen civic involvement Listen to the residents they want opportunity and know what they need Good neighbors who pay their rent and care about the community Homes in good condition Jobs 3

4 ORGINIAL PROFILE Failed housing sponsored by the government 2 Private for profit owned sections 2 government owned sections 100% HUD subsidized Built for households with incomes up to 80% of area median income Regulations changed to reduce incomes to 0-50% of area median income LOCATION Located between 4 th and 7 th Streets NE and Rhode Island Avenue and Edgewood Street NE Near transportation Near government sponsored shopping 16 Acres in Northeast Washington DC Originally i built in rental apartments in 3 mid-rises and 8 garden buildings 4

5 SITE LAYOUT PROFILE IN 1991 Concentration ti of poverty and crime Tenant Income profile: All below 50% of AMI, majority below 30% of AMI Seniors, families, and disabled Dysfunctional community infested with drugs and multiple illegal activities Phase I 60% occupied Almost all of the tenants with the ability to move to other housing had left 5

6 Investment was fleeing Tenants were fleeing Crime and drugs ruled WHAT TO DO? TENANT VISION Rental housing, not homeownership Return to higher income tenant profile Substantial rehabilitation of seriously dilapidated buildings Jobs Using Technology Civic Engagement Using Technology 6

7 PLAN OF ATTACK Engage the community in planning Attract investment to renovate the housing Assess and address the needs of the residents Seek partners for community building BEFORE AFTER 7

8 Assess and address the needs of the residents HOUSING Affordable to Existing Residents Attractive to Higher Income Residents JOBS Train in Use of Technology for Good Paying Jobs COMMUNITY DEVELOPMENT Civic Engagement Using Technology Day Care for Infants and Toddlers Educational Programs Using Technology for Youth Engage the Teens (Computerized Music) Programs and Health Care Using Technology for the Seniors BEFORE AFTER 8

9 CASE STUDY HOUSING FOR FAMILIES AND SENIORS Difficulty financing i 3 and 4 bedroom units Difficulty financing housing for extremely low income seniors HOUSING FOR A WIDE RANGE OF INCOMES Difficulty financing higher income tenants Lenders and equity partners wanted 100% rent subsidy for very low income BEFORE AFTER 9

10 PHASE I PHASE II PHASE III PHASE IV DEVELOPMENT COST $29.7 Million $4.6 Million $23.2 Million $19.0 Million UNIT MIX 292 Units 42 Units 200 Units 258 Units # of Units Unit Size 20 JR1 BR # of Units Unit Size # of Units Unit Size # of Units Unit Size 81 1 BR BR BR 76 2BR 42 2BR 61 2BR 43 2 BR/Den 6 3 BR 57 4 BR when completed REGULATORY REQUIREMENTS PHASE I PHASE II PHASE III PHASE IV 39% 100% 40% 0-50% AMI 0-50% AMI 0-50% AMI 46% 76% 10% 51-80% AM 0-60% AMI % AMI 24% 50% 61-80% AM 61-80% AMI 15% % AMI 40% Rent Subsidy 0% Rent Subsidy 100% Rent Subsidy 40% Rent Subsidy 10

11 AMENITIES More than 60,000 square feet of community space Residential Intranet (LAN) Low Cost High Speed Internet Access 6 Computer Learning Centers Resident Association Offices On Site Job Training in Technology Jobs 2 Day Care Centers Computerized Music/ Digital Recording Studio Career Resource and Assessment Center Outdoor Recreational Areas Medical Suite Senior Dining Senior Social and Exercise Areas Meeting/Activity Rooms FEDERAL INVESTMENT US Department of Housing and Urban Development Hope II Grant HUD Up Front Grant 4 Forms of HUD Rental Subsidy HUD Sec. 202 (Loan) Federal Low Income Housing Tax Credits HUD FHA Section 221 (d)(4) (Loan Guarantee) HUD Section 236 IRP (Debt Interest Rate Subsidy) Federal Home Loan Bank (Forgivable Loan) US Department of Commerce (Technology Infrastructure and Job Training Grant) US Department of Labor (Job Training Grant) LOCAL INVESTMENT DC Dept. of Housing and Community Development DC Housing Authority DC Housing Finance Agency 11

12 MAJOR PRIVATE INVESTMENT Wachovia (Debt) M&T Bank (Equity) Sun Trust Bank (Debt and Equity) Verizon (Job Training Grant) Numerous Foundation Grants Numerous In-Kind Donations of Time and Expertise Partners invest on a daily basis Microsoft Catholic University George Washington University Notre Dame Educational Center Providence Hospital And many foundations 12

13 TODAY Today hundreds of residents with a broad range of incomes live safe, happy lives going to work with their children in educational programs after school, learning on the internet, building online businesses, and working together to ensure a strong, sustainable, VIBRANT community. 13