Kentucky Supportive Housing Academy

Kentucky Housing Corporation

PROVIDED BY HOMELESS & HOUSING COALITION OF KENTUCKY

Kentucky Interagency Council on Homelessness

Kentucky Interagency Council on Homelessness: Supportive Housing Committee

The committee’s purpose is to encourage the construction of more supportive housing projects in Kentucky. The committee has identified capacity building among non-profit social service/homeless providers in affordable housing development as an opportunity which will result in more Supportive Housing development.

Recovery Kentucky

Kentucky Supportive Housing Academy

Service providers know how to provide case management services and help homeless families apply for rental assistance and other public benefits, but they don't know how to structure tax-credit projects and access other funds available for affordable housing construction. Low-income housing developers know how to apply for tax credits and structure deals, but they don't know how to provide supportive services to low-income families.

Homelessness & Mental Health

In comparison to other adults, those who had been homeless were six times more likely to have had an alcohol or drug

problem and three times more likely to have had a psychiatric illness

(Greenburg and Rosenheck n.d.)

Supported housing defined

Dedicated housing resources or subsidies combined with Human Services

Human Services are community-based mental health services and practical assistance of the social work profession. They must be intense,

flexible and sustained for many years.

(Ellen and O’Flaherty, How to House the Homeless, New York, 2010)

© 2012 Stephanie Sweeney & Associates

Pennyroyal Regional Veterans Program Center

Kentucky Supportive Housing Academy

Hands-on technical assistance has strengthened numerous community development practitioners’ capacity. It has bridged the gap between the classroom and the neighborhood, helping turn ideas into solid realities.

Goals & Objectives

� Help participants understand the existing world they are entering in the development of affordable housing

� Help participants understand risks & rewards

� Help participants understand the concept of “asset management”

Why do non-profits participate in housing development?� Social Services Provision

� Percentage of Developer Fee supports mission

� Ownership interest in a significant asset

What organizations typically participate in Housing Development?

Community Development Corporation or CDC.

� Also called, non-profit housing development corporations (NDC’s)

� Typically the corporation’s charter identifies the development of affordable housing as the purpose of the organization

� Community Housing Development Organizations (CHODO’s) commit to an additional level of community participation. In return they can receive operating support.

Kentucky Supportive Housing Academy will include topics such as:

There are 3 phases in the life of the project

� Development Stage

� Leasing Stage

� Operational Stage

The Development Team – part 1

� Developer - responsible for developing project, overseeing construction and overseeing rent-up and oversight of on going project operation

� General Contractor – responsible for obtaining building permits and insurance not specifically the developer’s responsibility, building the project as designed by the architect, working with construction inspectors, and completing construction on time and within budget

� Architect - responsible for project design and often construction supervision

The Development Team – part 2

� Attorney - responsible for review and negotiation of loan and investor documents

� Property Manager – responsible for tenant certifications and the day-to-day operation of the project

� Accountant - reviews the closing financial projection, confirms the carryover basis of costs in the allocation year, prepares partnership tax returns, and prepares the cost certification required to begin the flow of tax credits.

� Consultant - Contributes project development expertise to the process

How to choose the site

� Rehab vs. new construction

� Availability of rental subsidy

� Local community & government support (vs. NIMBY)

� Local community & government financial support

� Market considerations

� Considerations of impaction of affordable housing & concentrations of populations with special needs

How to choose the financing

� We’ve considered the market – now what is the appropriate number of units to develop?

� Low-income housing tax credits work best on projects of at least 32 units

� There are a variety of other tools available to subsidize housing developments of smaller size

Kentucky Supportive Housing Academy� How Training Will Be Organized:

� The training will occur over four months and cover a range of topics critical to supportive housing development. On the last day of the training, the teams will make formal presentations to a panel of funders who will critique the proposals and make suggestions for improvements to the projects.

Kentucky Supportive Housing AcademyTraining session 1: Project concept development, selecting a project size and

design to fit the community and target population, community support and budgeting

Training session 2: Service planning for special needs populations and budgeting; targeting other project partners and commitments, understanding rental assistance options, and supportive housing best practices

Training session 3: Property management, operating budgets and operating issues, and fair housing

Training session 4: Presentation to funders, with training completed before Kentucky Housing Corporation releases its Qualified Allocation Plan.

Submission of project to KHC’s Qualified Allocation Plan tax credit or appropriate program.

Kentucky Supportive Housing Academy The training will only be available to organizations, including CHDOs, with a commitment to developing low-income supportive housing. Participants will be required to form development teams in order to apply for the training. The teams will include three people: representatives of a service provider; property management agency; and housing developer. The training will have the capacity for up to ten three-person development teams.

Pre-Development:

� Forming project plans� Analyzing project budget to identify cost savings opportunities

� Identifying understated project costs to prevent overruns

� Recommending modifications to the budget, financial structure and terms of the financial commitment to enhance project viability

� Developing the financial package for submission to private and public sources of funding for financing

Financing:

� Negotiating with private and public lenders for funding to achieve the desired structure

� Confirming financing commitments from lenders and investors

� Assistance with FHLB Affordable Housing Program applications

� Finding equity investors to purchase tax credits or become partners in ownership

� Loan servicing

Construction:

� Working with developers

� Managing construction and improvements

� Negotiating construction contracts

Management:

� Identifying potential tenants

� Handling marketing and pre-leasing

� Negotiating leases

� Selecting and retaining a management firm

� Managing assets

SMI Housing, Cincinnati, OH

LIHTC Organizational Structure

Primary risks to non-profit during development phase� Risk should be commensurate to level of control – the non-profit sponsor should be cautious of responsibility of cost overruns.

� Should the non-profit sponsor take on responsibility for areas where it lacks expertise such as building permits?

� How to hold the development team accountable.

Leasing Phase Tax credit adjusters

� The tax credit proforma contains certain time limits for the lease up of units. It is only through the lease up of units that investors can actually take their credit.

� The limited partnership agreement (LPA) will protect the investors in the case units do not lease up as quickly as forseen!

Kentucky Supportive Housing Academy

Kentucky Supportive Housing Academy

For more information & to register:

Frances W. Alvis

Executive Director

(502) 223-1834 ext. 1114

falvis@hhck.org

306 W Main St, Ste. 207 (McClure Building)

Frankfort, KY 40601