Building a Better Quality of Life

Sir Charles ApartmentsYankton, SD

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Building a Better Quality of Life

Sir Charles Apartments

• Built in 19th century; National Registry• 1982 – rehabbed under Section 8 Substantial

Rehabilitation Program; 34 – 1BR units• Located in Yankton, SD (population 14,000)

downtown close to services• Local ownership - 40 individuals from the

community• Lewis and Clark Behavioral Health Services had

clients residing in the property• Age of building, lack of financial resources and

owners’ interest, building began deteriorating rapidly

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Building a Better Quality of Life

Sir Charles Apartments

Financial Feasibility – • $455,823 owed on original mortgage - debt service

delinquent, 13.3% interest rate, maturity 2013• Annual debt service - $160,700, only afford

$105,000• Concern that prepayment of first mortgage would

risk Section 8 housing assistance (40 yr. contract)• $455,823 prepaid with conventional financing

would cost the development over $270,000• Building appraised at $1,450,000 – not sufficient

financing or cash flow to finance the acquisition

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Building a Better Quality of Life

Sir Charles Apartments

Financial Feasibility –• Lewis & Clark nonprofit organization• Original owners wanted out, charitable

contribution• South Dakota Housing Development Authority

(SDHDA) Preservation loan to guaranty cash flow−Drawn down monthly to assist with paying first

mortgage debt ($7,156/month for 43 months)−Approximately $327,900 loan to be capitalized at

maturity of first mortgage (August 2013)−Re-amortized over 6.5 years at 3.6%

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Building a Better Quality of Life

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Sir Charles Apartments

Other Financing – SDHDA HOME Funds - $788,240, 0%

interest, irregular amortization, repayment begins 2020, when Preservation loan has been repaid, repaid within 10 years

Housing Tax Credit equity - $ 2,288,103 – utilized Tax Credit Exchange program

Local Lender - $ 393,157, 7.75% and 15 yr. amortization, subordinated lien position, repayment began year 1

Building a Better Quality of Life

Sir Charles Apartments

Total Development – Existing mtg. $ 455,823 Acquisition $ 530,823HOME Funds $ 788,240 Rehabilitation

$2,436,275HTC (exchange) $2,288,103 Professional fees $

88,000Local Lender $ 393,157 Financing costs $

273,000Developer fee $ 319,225Reserves $ 95,000

Other soft costs $ 183,000Total Financing $3,925,323 Total Costs$3,925,323

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Building a Better Quality of Life

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Sir Charles Apartments

2009 Operations 2011 BudgetGross Rents $322,506 $331,872Vacancy $ (17,557) $ (23,231) (7%) Other Income $ 13,751 $ 12,000

Operating Exp. $108,908 $110,040Maintenance $ 6,364 $ 36,489Taxes and Insurance $ 28,797 $ 29,987

Net Operating Income $147,551 $120,225Debt Service $160,704 $102,866Reserve Accounts $ 65,592 $ 95,000Distributions Payable $349,478 $ 0Debt Coverage Ratio 1.15 to 1.25

Building a Better Quality of Life

Sir Charles Apartments

Major Rehabilitation - • Installing fire sprinkler system• Updating for building codes including

replacing all outlets, switches and lighting fixtures

• Replace windows, repair brick and stone (tuck pointing and clear sealant), replace existing boilers, and hot water heaters

• Complete renovation of all tenant units and common areas

• Reinstated historical features that were lost in the rehabilitation of 1982 8

Building a Better Quality of Life

Sir Charles Apartments

Long Term Viability – • Retained Section 8 housing assistance –

elderly or disabled tenants 40% AMI or lower income

• Proper budgeting of income and expenses• Reserve accounts funded for future needs

(replacement reserves)• Tenant services – case management, life

skills, one meal per day, close proximity to services

• All debt repaid in 20 years 9

Building a Better Quality of Life

Sir Charles Apartments

Partnerships - • Original owners forgoing equity in the

property• Local nonprofit wanting to retain

affordable housing in their community• Local lender willing to take a second

lien position for their conventional loan• SDHDA providing additional funds to

create a feasible financing option

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Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Gordon H. Mansfield Veterans Community Soldier On)

Pittsfield, MA

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Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Reaching Underserved Populations andPromoting Long Term Affordability:Understanding the Customer

• Veterans transitioning out of homelessness

• Need for community space

• Need for accessibility

• Need for services

Making sure design and scope fit customer’s needs

Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Reaching Underserved Populations andPromoting Long Term Affordability:Serving the needs of the underserved

• Permanent, supportive housing

• Intensive network of supportive services

• Access to a broad community partnership

• Case manager available

Gordon H. Mansfield Veterans Community (Soldier On)

Pittsfield, MA

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Reaching Underserved Populations andPromoting Long Term Affordability:Designing for the population

• Full-service, individual units

• “Village” and “main street” concepts to promote community

• LEED-certifiable building design

• 26% of units are accessible to people with physical disabilities

• 51% of units are adaptable and visitable to people with physical disabilities

It takes the right ingredients…

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Vermont’s HOME ProgramBuilding Sustainable

CHDO Capacity

• Perpetual affordability• No Displacement• Build capacity; serve regions with high

unemployment and low per capita income • Partnership with conservation community • State Trust Fund; CLT Model; Q.A.P. and

Consolidated Plan Priorities

State Housing Policy Environment

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• outreach

• financial support and incentives

• training

• targeted technical assistance

• monitoring and evaluation

• troubleshooting and workouts, as necessary

Components of VT’s CHDO capacity program:

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“VHCB, through its operating support grants and ongoing organizational monitoring, plays an important role in building and maintaining the capacity of individual nonprofits. . . [VHCB’s] collaborative mentoring approach and flexible underwriting augmented with training and careful organizational monitoring has strengthened and hardened the nonprofit industry in Vermont appropriately.”

ICF Report 2004:

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CHDO projects in Vermont

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Vermont CHDOs have developed nearly

3,000 units of affordable housing

(nearly 1,000 HOME units) in 70 towns

ranging from Vermont’s largest city,

Burlington, to very small towns, like

Groton (population 966).

Groton Community Housing (before)

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In this small town, a major revitalization project, rehab and new construction, transformed the village center (before/during)..

Groton Community Housing (after)

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After: The general store, with apartments above and 3 business incubator spaces. 19 apartments; $204,200 HOME award.

1) Raising money locally;2) Identify properties that are losing money or experiencing high

vacancies; 3) Establishing organizational goals and objectives for:

• organizational planning• staff/board relations• personnel• finance• contract compliance• technical operating systems• project development• property and asset management• tenant relations • community relations

Examples of CHDO Operating grant requirements:

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Adaptive Re-use: Daly Shoe Building

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The Windham Housing Trust created 29 apartments in the Daly Shoe Building, a former warehouse. The energy efficient retrofit uses solar panels for domestic hot water.

Waterfront Housing, Burlington

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2005 Home Depot Award of Excellence for Affordable Housing Built Responsibly

LEEDS certified: high efficiency building envelope; locally cut and milled flooring; state-of-the-art storm water runoff treatment system; advanced heating and cooling systems; direct line of sight to daylight for more than 90% of occupied space.

• CHDO staff work one-on-one with VHCB staff on financial, personnel, development & administration;

• VHCB pays for consultants to work with CHDOs on specific issues;

• VHCB has sponsored 37 workshops developed in response to an annual survey of CHDOs

VT provides a robust technical assistance program

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The Willard Mill (a former industrial building) was converted to housing. Energy retrofit with interior foam insulation and aluminum clad windows. Energy performance will allow affordability at oil prices up to $6 a gallon.

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Bellows Falls Family Housing

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Energy use was cut in half after windows were replaced, solar panels for domestic hot water were installed, siding was removed and exterior rigid foam insulation added. The property will be able to maintain affordability at oil prices in the $5/gallon range.

34 affordable apartments and commercial space developed by the Champlain Housing Trust after a fire.

Park Place, Burlington

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16 apartments developed by the Central Vermont Community Land Trust. On the ground floor is a branch of the local library; out back is a ballfield used by the Little League.

Green Mountain Seminary Apts, Waterbury

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Infill Development: Passumpsic View Apartments (before)

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A huge void was left in the center of St. Johnsbury’s downtown when the prominent Daniel’s Block burned to the ground in January 2000. This picture shows the town band preparing to play at the groundbreaking celebration for Passumpsic View Apartments as a neighboring structure, damaged in the fire, looms in the background.

Infill Development: Passumpsic View Apartments (after)

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The newly constructed 4-story building includes 25 senior apartments with rental assistance and 2 commercial spaces along with a large community room.

Howard Block in Bellows Falls (pop. 3,165)

After a fire, the brick apartment building was renovated with CDBG funds, VHCB grants and HOME funds to create 13 affordable apartments and 4 commercial spaces.

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• rade grounds. Also on the site are rental apartments and housing for persons living with AIDS.

Officers Row, Dalton Drive, Essex and Colchester

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Affordable duplexes with conserved parade grounds. Rental apartments and housing for persons living with HIV/AIDS are also on the site.

Cottage Street, Rutland (before)

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This building was demolished during a neighborhood revitalization project. Rehab and new construction created 27 apartments in 7 buildings, using $375,000 in HOME funding.

Cottage Street, Rutland (after)

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These two multi-family apartment buildings, designed to fit the style of the neighborhood, replaced the demolished buildings.

Tuttle Block, Rutland

13 affordable downtown apartments, 2 commercial spaces, and office space for the Housing Trust of Rutland County.

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Conant Square Apartments, Brandon

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4 HOME units in a 19-unit senior housing development - Housing Trust of Rutland County