Housing Advisory Committee Retreat - Denver€¦ · 17/09/2001 · The January 2016 Point-in-Time...
Transcript of Housing Advisory Committee Retreat - Denver€¦ · 17/09/2001 · The January 2016 Point-in-Time...
Housing Advisory CommitteeRetreat
Monday, January 9, 2017
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Agenda
I. Introductions (1:00 – 1:45pm) II. Welcome from Mayor Michael Hancock (1:45 – 1:55pm)III. Background on affordable housing in Denver (1:55 –
2:40pm)
IV. Overview of Committee’s role in shaping housing programs (3:00 – 3:45pm)
V. Formal structure of the Committee (3:45 – 4:30pm)VI. Next steps (4:30- 4:50pm)
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Background on OED
OED facilitates the development of inclusive communities through investments in key programs:
• Fostering a thriving business environment through business recruitment and expansion, minority and women owned business certification programs, and technical assistance to entrepreneurs
• Developing a skilled workforce through job training, apprenticeships, and educational programs in Denver’s growing advanced manufacturing, information technology, and health care sectors as well as other skilled trades
• Expanding affordable housing options for low and moderate income families in Denver through investments into new construction and preservation of affordable housing, land acquisition for future housing development, and programs to help families access or maintain housing
• Creating sustainable neighborhoods by expanding access to healthy foods and other amenities that increase a household’s economic mobility
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NEED FOR AFFORDABLE HOUSING IN DENVER
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5Source: American Community Survey 1-Year estimates; Apartment Association of Metro Denver vacancy Survey
Denver’s rising housing costs
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
1.90
2.00
Growth in Housing Costs vs. Income(Denver County 2012-2016, Indexed to December 2011)
median income
median rent
median home price (SFR)
median home price (condo)
2016 Area Median Income (AMI) =$56,100(one person)
x 30%
x 50%
x 60%
x 80%
$16,850 $19,250 $21,650 $24,300
$28,050 $32,050 $36,050 $40,050
$33,660 $38,460 $43,260 $48,060
$44,900 $51,300 $57,700 $64,100
A single parent working 45
hours/week at minimum wage
Two parents each working full time at
minimum wage 6
Need for affordable housing
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Kindergarten Teacher
Reporter
Chiropractor
Locksmith
Affordable 1BR For-Sale Home
$169,084
Median Denver For-Sale Condo
$299,083
60%medianincome
($33,600)
Affordable 1BRRental Home
$901
Median Denver 1BR Rental
$1,229
Bus Driver Pharmacy Technician
CabinetmakerVeterinary Technician
80%medianincome
($44,750)
Source: Bureau of Labor Statistics Occupation and Employment Statistics; Apartment Association of Metro Denver Quarterly Rent and Vacancy Survey; Denver Metro Association of Realtors Market Trends Report
Need for affordable housing
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60% AMI 80% AMI 100%+ AMI30% AMI
33,000 29,00019,000 13,000
6,0000
10,000
20,000
30,000
40,000
50,000
60,000
<$20,000 $20,000-$34,999
$35,000-$49,999
$50,000-$74,999
>$75,000
Cost Burdened(Spending more than
30% of income on housing)
Not Cost Burdened
Need for affordable housing
Need for affordable housing
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The January 2016 Point-in-Time (PIT) Homeless count identified 3,600 homeless individuals in the City of Denver, about 65% of all homeless persons in the region.
Approximately 550 were “chronically” homeless, meaning they experience repeated episodes of homelessness.
PUBLIC AND PRIVATE HOUSING PARTNERS
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If the new home is a market-rate home, the money paid by the renter or new homeowner is enough to pay back the investors or lenders.
To build a new housing unit, the developer raises money from investors and lenders to finance construction
Financing affordable housing
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If the new home is a market-rate home, the money paid by the renter or new homeowner is enough to pay back the investors or lenders.
If the new unit is an affordable home, it costs the developer the same amount to build. But the renter or owner pays only what they can afford. That’s usually not enough to pay back the investors or lenders.
To build a new housing unit, the developer raises money from investors and lenders to finance construction
In most cases, the public sector needs to help out to make it feasible to build affordable housing.
Financing affordable housing
Partners in addressing housing needs
Many partners come together to make affordable housing possible including multiple city agencies, state and federal partners, housing and real estate stakeholders, finance experts, and the general public.
Key partners in providing affordable housing include:
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Private Partners- Non-profit affordable housing developers- For-profit affordable housing developers- Private sector real estate professionals- Financial institutions- Philanthropic institutions
Public and Quasi-Public Partners- Community Planning and Development (CPD)- Mayor’s Office of HOPE- Budget and Management Office (BMO)- Denver’s Road Home (DRH)- Denver Housing Authority (DHA)- Denver Urban Renewal Authority (DURA)- Colorado Housing and Finance Authority (CHFA)- Colorado Division of Housing (CDOH)- U.S. Department of Housing and Urban
Development (HUD)
9% Low Income Housing Tax Credits 4% Low Income Housing Tax
Credits
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Federal, State and Local Funds
Denver Revolving Affordable Housing Loan Fund (RAHLF)
Total project cost
Private Debt
State Low-Income Housing Tax Credits
In a typical affordable rental housing development, the majority of capital comes from debt and federal Low-Income Housing Tax Credits (LIHTC).
• Non-profit and for-profit developers can raise debt from banks or other financial institutions
• LIHTC are allocated by CHFA for all projects in Colorado
9% LIHTC provide equity for about 70% of project costs, and are allocated once per year in a competitive process.
4% LIHTC provide equity for only about 30%-40% of project costs, but they have a rolling application and are non-competitive.
Affordable projects that receive either type of LIHTC still need additional “gap financing” to have enough capital to build affordable units.
Financing affordable housing
Private Debt
Both 9% and 4% LIHTCs serve households up to 60% AMI
RESOURCES FOR HOUSING INVESTMENT
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OED resources for affordable housing
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OED spends federal and local resources on affordable housing development, preservation and programs.
Key funding sources in providing affordable housing include:
Local housing resources
- (Historical) One-time general fund transfers helped seed Denver’s Revolving Affordable Housing Loan Fund
- $150 million dedicated local funds
Federal housing resources
- Community Development Block Grants (CDBG)
- HOME funds- Housing Opportunities for Persons
with AIDS/HIV (HOPWA) funds- Emergency Solution Grant (ESG)
OED resources for affordable housing
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Typical annual resources for housing development, preservation and programs
Funding source Typical uses Amount
CDBG funds available for housing Land acquisition, preservation, programs $2.00 million
HOME funds Development, preservation, programs $2.00 million
HOPWA funds Programs $1.50 million
ESG (Administered by DHS) Programs $0.55 million
Dedicated local housing funds (average) Land acquisition, development, preservation, programs
~$15.00 million
TOTAL $21.05 million
Additional one-time federal or local funds may be used for housing investments as available.
700
800
900
1000
1100
1200
1300
1400
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Federal Resources Average Denver Rent
CDBG*
HOME
average Denver rent
*Represents the City of Denver’s CDBG allocation, some of which is not available for affordable housing investment. CDBG funds can also not be used for new construction.
OED resources for affordable housing
Background on Denver’s dedicated fund
• Property Tax*
– 0.5 mill for year one – $6.5 million in year one* Adjustable mill in year two and beyond (as with other mills). Tax revenue is expected to grow gradually over time.
• Development Fee – Residential Single-Family/Duplex $0.60/sq ft– Residential Multi-Family $1.50/sq ft– Commercial Hotel/Office/Retail/Other $1.70/sq ft– Commercial Industrial/Agricultural $0.40/sq ft
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Development fees • Charged per square foot on new construction/additions with
more than 400 square feet • Used to help meet demand for new affordable housing needed
due to new permanent jobs in new commercial & induced by residential
• Payable at issuance of Building Permit• Replaces the existing Inclusionary Housing Ordinance – costing
condo developers 1/4 to 1/10 less than the current ordinance
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Development Fee
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Property Tax (0.5 Mill) Multi-Family Hotel/Office/Retail/OtherIndustrial/Agriculture Single-Family
Example of dedicated fund collection
Note: Hypothetical based on historic 2006–2015 new construction (assuming 20% of Single-Family and Multi-Family development is exempt and 10% of Hotel/Office/Retail/ Other and Industrial/Agriculture development is exempt). Property tax is assumed to be $6.5M in year 1 growing at 2% in non-reassessment years and 6% in reassessment years.
Even though annual revenue is projected to average about $15M per year, revenue in
any given year will likely be higher or lower than that amount.
Revenue
OED HOUSING INVESTMENT PRIORITIES
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Investment Priorities
OED’s overarching priorities for investment into affordable housing development, preservation and programs:
– Location specific priorities:• Neighborhoods with access to transportation• Neighborhoods vulnerable to gentrification• Neighborhoods with high “access to opportunity” factors
– Project specific priorities:• Mixed-income developments• Housing for very low income households• Affordable housing for special populations• High quality design
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Location Priorities - Transit
OED prioritizes investment into areas of the city with access to transportationincluding fixed-rail transit and high frequency bus since transportation is typically the second highest use of household income after housing for low and moderate income families.
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Location Priorities - Gentrification
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OED prioritizes investment into neighborhoods vulnerable to gentrification since shifting neighborhood demographics in areas of the city experiencing significant public and private investment can have the effect of raising property values, property taxes and rents and placing low and moderate income families at risk of displacement.
Location Priorities – Access to Opportunity
OED prioritizes investment into neighborhoods with high “access to opportunity” factors such as high quality education, proximity to good paying jobs, and other amenities such as parks, libraries, recreation centers and grocery stores that can impact a household’s economic mobility.
- Approach required by HUD regulations to affirmatively further fair housing - OED is in the process of developing quantitative mapping tool to analyze “access
to opportunity factors” with the expectation that this tool will be available in early 2017
- In the meantime, OED has revised our housing application to require applicants to provide qualitative responses to the elements that address areas of opportunity
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OED’S HOUSING PROGRAMS
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OED’s Affordable housing toolkit
Land Acquisition
OED invests federal and local resources into land acquisition directly and through partners to drive a long term pipeline of affordable housing development.
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Spotlight Project: 48th and Race
In 2014, OED partnered with the Urban Land Conservancy to purchase 6 acres of land to develop at least 400 affordable homes and
60,000 square feet of community commercial space in the Elyria Swansea neighborhood blocks
away from a planned transit stop.
OED’s Affordable housing toolkit
New Construction
OED invests federal and local resources into land acquisition directly and through partners to drive a long term pipeline of affordable housing development.
Units created since issuing the 2013 “3x5” challenge: 2,188
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Spotlight Project: Ashley Union Station
Originally funded in 2013, OED partnered with Integral Development and the Denver Housing Authority to create a mixed-income building in the heart of Downtown Denver’s Union Station Neighborhood. OED’s investment is helping to create 75 affordable units in one of the most
expensive neighborhoods in Denver.
OED’s Affordable housing toolkit
Preservation
OED invests into preservation of Denver’s existing affordable housing stock through acquisition and rehabilitation to ensure homes are available for low and moderate income families long-term.
Units preserved since issuing the 2013 “3x5” challenge: 1,178
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Spotlight Project: Kentucky Circle Village
In 2016, OED partnered with Senior Homes of Colorado to preserve 147 affordable rental units for low and
moderate income seniors at Kentucky Circle Village in the Washington Virginia Vale neighborhood of Denver.
The development’s previous affordability covenant was set to expire in 2019, but OED investment in
rehabilitation of the property will preserve affordability through 2036.
OED’s Affordable housing toolkit
Housing Programs - Rental
OED invests federal and local resources into programs that provide short to medium term financial assistance for renters and individuals experiencing homelessness. OED also invests into tenant-landlord counseling and an emergency assistance hotline.
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Housing Programs - Homeownership
OED invests federal and local resources into programs that provide downpayment assistance for prospective homebuyers, homeownership counseling courses and emergency home rehabilitation for existing low and moderate income homeowners.
Inclusionary Housing Ordinance
Denver’s Inclusionary Housing Ordinance produced 82 affordable for-sale units since 2002 under ordinance requirements and 1155 units under development agreements. Currently, there are 107 units under construction and another 400 -500 that are possible under existing agreements.
The IHO has been replaced with a residential housing linkage fee where developers will have an option to build affordable units instead of paying a fee to the city.
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2 13
211
301 306
54
100
46 46 29 247 0 5 22
107
0
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Affordable IHO Units Produced by Year
OED’s Process to Select and Fund Development or Preservation Projects
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HISTORIC ACCOMPLISHMENTS
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2011 20152012 2014●
Mayor’s Housing Task Force Convened
●2013
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Mayor Announces
3X5 Initiative
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Mayor’s Housing Advisory
Committee Convened
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Housing Finance
Task Force Convened
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Task Force Recommendations
Adopted
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Revolving Affordable
Housing Loan Fund
Established
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Housing Plan
Published
●
Phase I IHO Revisions
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BBC Housing
Gap Analysis
NSPIII Competitive Grant Award
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Phase II IHO
Revisions
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Metro Mortgage Assistance Plan
Established
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Housing Plan
Outreach
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Mile High TOD Fund
Established
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$3M Capitalization of IHO Fund
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IHO Rules & Regs. Adopted
Dedicated Housing
Fund Announced
2016●
Preservation Ordinance Revisions
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Preservation Mapping Tool
Developed
OED’s Historic accomplishments
$150M Dedicated
Fund Adopted
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Advisory Committee
Formed
● ●
Linkage fee Nexus Study Completed
2nd Annual Housing Summit
●
Income-restricted rental units in Denver
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30 units
300 units
Affordable housing opportunities in Denver
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Access to Affordable Housing in Denver - Units/Vouchers Available in 2016
Housing Type Number of Units/Vouchers
Covenant Restricted Rental Units 22,098
Inclusionary Housing Ordinance (IHO) For-Sale Units 1,237Non-IHO Rezone Agreement For-Sale Units (predating the IHO in 2002) 154
Non-IHO For-Sale Units (Denver Office of Economic Development, funded since 2009) 68Denver Office of Economic Development -Tenant Based Rental Assistance Vouchers (funded through 2015 HOME program) 58Denver Housing Authority -Tenant Based Housing Choice/Section 8 Vouchers 5,862Denver Housing Authority -Project Based Vouchers 870Colorado Division of Housing -Tenant Based Rental Assistance Vouchers(Denver specific data, funded through 2015 HOME program) 20Colorado Division of Housing -Tenant Based Housing Choice/Section 8 Vouchers (Denver specific data) 1,236Colorado Division of Housing -Project Based Vouchers (Denver specific data) 120
TOTAL NUMBER OF HOUSEHOLDS IN AFFORDABLE HOMES 31,765Note that OED is working to integrate for-sale units built or rehabilitated under the Neighborhood Stabilization Program and update with 2017 data.
Denver’s “ 3 x 5 ” Challenge
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In 2013, Mayor Hancock announced the 3x5 Goal for the City to build or preserve 3000 units in 5 years. By the end of 2017 we will deliver on that goal ahead of schedule.
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Affordable housing opportunities in Denver
ROLE OF ADVISORY COMMITTEE
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Next Steps
Overview of Housing Fund Next Steps:
– Implementation: Action items to effectively and efficiently invest funds into projects and programs
– Comprehensive Planning: long-term strategic planning and production goals for local, state and federal resources across homeless to housing spectrum • 3-5 year Comprehensive Housing Plan• Supplemental annual action plan and reports • Office of HOPE (Housing and Opportunities for People
Everywhere)
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Revamped Affordable HousingAdvisory Committee
• Housing Advisory Committee will:– Recommend goals, objectives and policies to inform 3- to 5-year
comprehensive housing plans and annual action plans for housing investments, including goals for mix of:• AMI ranges• Rental and homeownership• Supportive services• Land banking
– Review annual performance and outlook reports– Inform affordable housing budget priorities– Review and/or propose new programs or tools
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Implementation Next Steps
• OED is taking a number of steps in 2017 to update processes for housing investments that focus on increasing transparency and efficiency.
• While Advisory Committee will have role in informing budget priorities moving forward, OED has developed a 2017 housing budget to provide predictability for Council and stakeholders.– Focus on unit production and preservation– Land acquisition to drive long term pipeline– Temporary emergency assistance
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Implementation Next Steps
Housing Fund Implementation Steps
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Task Timeline
Finalize Housing Fund Rules and Regulations January 2017
Begin quarterly Housing Division newsletters Q1 2017
Update OED’s Housing Division website Q1 2017
Begin quarterly Housing Division newsletters Q1 2017
Finalize compliance and monitoring requirements for local funds Q1 2017
Release RFP for Temporary Emergency Assistance Q2 2017
Release RFP for Innovative Housing Solutions Q2 2017
Implementation Next Steps
Housing Fund Implementation Steps cont.
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Task Timeline
Implement 2017 standard financial products for housing investments Ongoing
Implement 2017 revised application for housing investments Ongoing
Comprehensive Housing Plan
Comprehensive Housing Plan elements:- List of City housing expenditures - Measurable goals for each type or category city housing expenditure
(including range of incomes) - Financial and production goals for a mix of affordable rental and for-
sale housing- Strategies to reduce effects of gentrification and displacement- Parameters for use of funds for supportive services- Parameters for use of funds for land banking - Parameters for the use of funds for mixed-income development
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Comprehensive Housing Plan
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How Comprehensive Housing Plan interacts with HUD Consolidated Plan and Affirmatively Furthering Fair Housing
Advisory Committee
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Implementation Comprehensive Planning
Advisory Committee
Production GoalsProgram/Policy Development
Budget Priorities
Comprehensive Planning Next Steps
Comprehensive Planning Steps
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Task Timeline
Convene Advisory Committee, kick off Comprehensive Planning process
January 2017
Select Comprehensive Plan consultant(s) through competitive process January 2017
Finalize components of Comprehensive Plan and overall community/stakeholder outreach plan with input from Advisory Committee
February 2017
Begin data collection and outreach for Comprehensive Planning process
February 2017
Comprehensive Housing Plan must be submitted to Council for adopting by September 1, 2017.
FORMAL STRUCTURE
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