MIXED-INCOME HOUSING PANEL CCAH FALL CONFERENCE NOVEMBER 9, 2017
CFY DEVELOPMENT Vertically-Integrated Affordable Housing Development Company o Developer o General Contractor o Property Manager Cyrus Youssefi, President/CEO 33+ Years Experience Ali Youssefi, Vice President 11+ Years Experience
LOW INCOME HOUSING TAX CREDITS Created within Section 42 of IRS code in 1986 Most important resource for creating affordable housing in the United States 2.6 million housing units placed in service between 1987 and 2013
LOW INCOME HOUSING TAX CREDITS LIHTC PROJECTS Utilize 9% or 4% Tax Credits Typically 100% Affordable Target different demographic groups: Senior Housing, SRO (Single-Room Occupancy) Housing, Large-Family Housing, etc
Globe Mills, Sacramento, CA CTCAC HOUSING TYPE: Senior SIZE: 143 units; 129,972 square feet COMPLETED: 2008 COST: $38 million
Ridgeway Studios, Sacramento, CA CTCAC HOUSING TYPE: SRO SIZE: 22 units; 13,200 square feet COMPLETED: 2014 COST: $7.2 million
Juniper Apartments, Manteca CA CTCAC HOUSING TYPE: Large Family SIZE: 153 units; 174,050 square feet COMPLETED: 2012 COST: $28.9 million
WHAT IS MIXED-INCOME HOUSING? US Department of Housing and Urban Development (HUD): A mixed-income housing development can be defined as a development that is comprised of housing units with differing levels of affordability, typically with some market-rate housing and some housing that is available to low-income occupants below market-rate.
WHY MIXED-INCOME HOUSING? It diversifies communities! MKT RATE MKT RATE < < MKT RATE AFFORD. MIXED MIXED AFFORD. AFFORD.
WHY MIXED-INCOME HOUSING? Increased tolerance for socio-economic diversity Access to better amenities and services for the lowincome tenants (both in building and neighborhood) Higher quality housing Safer neighborhoods Increased property values Greater community support (less NIMBYism)
CASE STUDIES SACRAMENTO, CA
SACRAMENTO COUNTY 2017 INCOME AND RENT LIMITS 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
700 BLOCK OF K STREET
700 BLOCK OBJECTIVE Develop a mixed-use, mixed-income, transit oriented development
PROJECT SUMMARY - 137 apartments (60% affordable, 40% market rate) - 70,000 SF of commercial/retail space
PERMANENT FUNDING SOURCES Cornerstone Perm Loan (TE BOND) $13,169,000 Land Contribution (City) $1 City/Redevelopment Agency Loans $11,500,000 GP Loan $1,500,000 Deferred Developer Fee $1,250,000 GP Equity $600,000 Limited Partner Equity (4% Tax Credits) $8,889,290
700 BLOCK OF K STREET UNIT MIX AND RENT LEVELS - 14 units @ 50% AMI - 70 units @ 60% AMI - 53 unrestricted units 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
WAREHOUSE ARTIST LOFTS
WAL OBJECTIVE Develop a mixed-use, mixedincome, transit oriented development
PROJECT SUMMARY - 116 apartments (75% affordable, 25% market rate) 12 000 SF of commercial/retail space
PERMANENT FUNDING SOURCES CCRC Perm Loan $6,400,000 CA State HCD Prop IC Funds $4,960,000 CADA/Agency Loans $6,000,000 Deferred Developer Fee $1,200,000 LP Equity (9% Tax Credits) $19,650,000 Limited Partner Equity (Historic TC) $3,000,000
WAL UNIT MIX AND RENT LEVELS - 9 units @ 30% AMI - 18 units @ 40% AMI - 35 units @ 50% AMI - 24 units @ 60% AMI - 30 unrestricted units 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
800 BLOCK OF K STREET
800 BLOCK OBJECTIVE Develop a mixed-use, mixed-income, transit oriented development post- redevelopment
PROJECT SUMMARY - 150 apartments (70% market, 30% affordable) 20 000 SF of commercial/retail space
PERMANENT FUNDING SOURCES CalHFA Perm Loan $55,130,430 CalHFA Subsidy Loan $1,800,000 Deferred Developer Fee $3,102,813 Limited Partner Equity (4% LIHTC) $3,311,928 GP Equity $6,000,000 TOTAL DEVELOPMENT BUDGET $69,345,171
800 BLOCK UNIT MIX AND RENT LEVELS - 30 units @ 50% AMI Moderate-Rate - 15 units @ 120% AMI - 105 unrestricted units 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
1717 S STREET
1717 S STREET OBJECTIVE Develop a mixed-use, mixed-income, transit oriented development post- redevelopment
PROJECT SUMMARY - 159 apartments (60% market, 40% affordable) 11 400 SF of commercial/retail space
1717 S ST UNIT MIX AND RENT LEVELS - 32 units @ 50% AMI Moderate-Rate - 32 units @ 120% AMI - 95 unrestricted units 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
MIXED-INCOME DEVELOPMENT LESSONS LEARNED
SACRAMENTO COUNTY 2017 INCOME AND RENT LIMITS LOW-INCOME HOUSING TAX CREDITS MISSING MIDDLE 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI 1 PERSON $15,600 $20,800 $26,000 $31,200 $36,160 $52,000 $62,400 30% AMI 40% AMI 50% AMI 60%AMI 80%AMI 100%AMI 120% AMI STUDIO $390 $520 $650 $780 $1,020 $1,300 $1,560 1-BDRM $417 $557 $696 $835 $1,114 $1,392 $1,670 2-BDRM $501 $668 $835 $1,002 $1,336 $1,670 $2,004 3-BDRM $579 $772 $965 $1,158 $1,444 $1,930 $2,316
100% AFFORDABLE VS MIXED-INCOME DEVELOPMENT Assumption: Need $100,000 to $150,000 per unit in gap financing to finance affordable housing in Sacramento (700 Block of K Street: approximately $136,000 per unit) Result:150 units of new affordable housing requires $15,000,000 to $22,500,000 in gap financing
100% AFFORDABLE VS MIXED-INCOME DEVELOPMENT Hypothesis: $15,000,000 in Gap Financing can build VS 150 UNITS 750 UNITS: 150 AFFORDABLE UNITS + 600 MARKET RATE UNITS
CFY S MIXED-INCOME DEVELOPMENTS WAL 700 BLOCK 800 BLOCK 1717 S ST (75% Aff, 25% Mkt) (60% Aff, 40% Mkt) (20% Low, 10% Mod, 70% Mkt) (20% Low, 20% Mod, 60% Mkt)
FUNDING MIXED-INCOME HOUSING & THE MISSING MIDDLE - Allow for a wider range of Income Levels to be targeted with the use of affordable housing funds. Local and State funding programs typically target the lowest income levels - Increase resources available to the State s Finance Agency (CALHFA) - Promote Mixed-Income development, rather than incentivizing housing to be built in affordable, moderate rate and market rate silos - Case Study: 800 Block likely could not be funded as designed if it was 100% affordable or 100% market rate - Increase participation by affordable housing Tax Credit investors