ULI Housing Opportunity Conference Mastering the Art of Mixed-income Housing Beverly Bates The Community Builders, Inc. 05/16/2016
The Community Builders, Inc. Beverly Bates, Senior Vice President of Development TCB is one of the largest nonprofit urban developers in the country serving 15 states and Washington DC and 90 neighborhoods Established in 1964 Over 29,000 apartments completed or preserved Over 11,000 units under property management Serving over 4,300 families in 27 communities through Community Life program 38 Mixed-income developments 15 HOPE VI Transformations 1 Choice Neighborhood Implementation 14 Mixed-income in current pipeline 2
Community Context / Market Strength Market strength or strong edges Sufficient density to reach strong edges and/or eliminate blight TOD Employment base Community amenities The Shops and Lofts at 47, Chicago IL 3
Harold Ickes Revitalization Program TEAM TCB-MI A JOINT VENTURE OF THE COMMUNITY BUILDERS, INC. AND MCCAFFERY INTERESTS, INC. 4
Millennium Park Context Illinois Medical District Soldier Field McCormick Place Convention center ITT 6 miles US Cellular Field University of Chicago 5
Key Mixed-Income Factors 1. VERY easy work commute 2. City is investing heavily in this area 3. Motor Row is an emerging cool neighborhood 4. 2 blocks away the market is already strong enough for multifamily new construction 6
Design Design to market Location of family versus small household units Places for kids to be 225 Centre Street, Boston MA 7
Preliminary Renderings and Building Typology 8
Master Plan A Tight, Dense TOD Site CTA Station 867 residential units 70,000 sf of retail 5,000 sf of community flex space All on Three Blocks Along State St. & Next to a New CTA Station Mixed Income Factors to Consider: 1. ½ of site NOT conducive to large family units, but still required 2. No market for 3bdrm rental units 3. Adjacent to a hot emerging market, but not yet a class A market: place making (i.e. building neighborhood demand) and hitting the niche markets are important 9
Income Tiers and Integration As many tiers as possible (avoid barbell effect) Checker boarding?? OK to have different types of buildings for different populations Schoolhouse Terrace Yonkers NY 10
Phase 1 Site Plan Income Mixing Every Rental Building 50% Market Rate 10% 80% AMI 10% 60% AMI 30% Public Housing Low-Rise Buildings Only 2bd Market Rate units Affordable and PHA units are 2bd, 3bd, & 4bd Units Mid-Rise Buildings Mostly 1bd units But some market rate studio units Home-Ownership Units Clustering mostly market rate for-sale units into the block 11
Unit Mix Rents: Market Unit Type PHA LIHTC 80% Market Total Sq Ft Total Mkt Rent/Sq Ft Mkt Rent Studio 0 0 0 33 33 650 21,450 2.25 1,463 1 53 9 9 71 142 790 112,200 2.25 1,778 2 19 16 15 36 86 991 85,200 2.25 2,229 3 6 3 2 0 11 1,200 13,200 0-4 4 0 0 0 4 1,350 5,400 0 - Total 82 28 26 140 276 237,450 Commercial Sq Ft 24,330 Working to get $2.25 psf market rents, but underwriting debt at $2 psf. Working to get both public housing capital funds and a Section 8-like operating contract Mixed Retail? 80% of retail is $22 psf market retail 20% of retail is $12 psf subsidized small biz neighborhood retail 12
Financing Issues Many lenders and investors like to do one or the other (market or affordable) Condo structure can help Market equity East Liberty Place North, Pittsburgh PA 13
Draft Ownership Structure 14
Sources and Uses 9% 4% Total Total Units: 94 Total Units: 182 Total Units: 276 Commercial: 5,330 Commercial: 19,000 Commercial: 24,330 % Res (By Area): 95% % Res (By Area): 88% % Res (By Area): 91% Uses Total Per Unit Total Per Unit Total Per Unit acquisition - - - - - - site work 2,675,943 28,467 8,007,259 43,995.93 10,683,202 38,707 construction 26,240,277 279,152 45,684,690 251,015 71,924,967 260,598 soft costs 3,701,441 39,377 6,126,391 33,661 9,827,832 35,608 financing costs 2,673,492 28,441 5,758,662 31,641 8,432,154 30,551 reserves 859,171 9,140 1,533,484 8,426 2,392,654 8,669 developer fee paid residential 2,181,860 23,211 5,145,267 28,271 7,327,127 26,548 developer fee deferred - - 1,715,089 9,424 1,715,089 6,214 developer fee retail 56,186 598 322,766 1,773 378,952 1,373 developer fee HO reserve 1,000,000 10,638 - Total Uses 39,388,369 419,025 74,293,608 408,207 112,681,976 408,268 - - - - - - Sources First Mortgage 14,427,739 153,487 23,114,452 127,002 37,542,191 136,022.43 IAHTC 313,200 3,332 6,525,000 35,852 6,838,200 24,776 CHA Capital Funds 6,770,547 72,027 13,028,183 71,583 19,798,729 71,735 TIF - - 13,876,541 76,245 13,876,541 50,277 City of Chicago - - 1,250,000 6,868 1,250,000 4,529 Accrued Soft Interest 194,652 2,071 932,498 5,124 1,127,150 4,084 Deferred Developer Fee - - 1,715,089 9,424 1,715,089 6,214 Fed LIHTC 16,198,380 172,323.19 10,801,745 59,350 27,000,125 97,827 Economic Equity 1,775,000 18,882.98 3,050,000 16,758 4,825,000 17,482 Total 39,679,617 422,124 74,293,607 408,207 113,973,224 412,946.47 15
Management and Resident Support Manage to market Amenities for all Services for those who need Constant attention to community building and engagement Oakwood Shores Community Center, Chicago IL 16
Community Engagement 17