Best laid plansHorrid tales of affordable housing

developmentNational Rural Housing Conference

2012

2003 - It sounded good at the time

O Plentiful resourcesO USDA self-help program running

strong, with administrative and mortgage funding

O Secondary financing availableO Rental housing LIHTC accessibleO Good market outside urbanized area

with high farmworker needs

Parksdale due diligenceO Sewer and water – commitment

letter!O ZoningO EnvironmentalO Eligibility for fundingO Competitive status of areaO MarketO Government requirementsO Offsite requirements

What can go wrong?O Structuring the purchase (when

possible option)O When elephants fight (city v. county)O A recession? Nah, can’t happen.O The American Dream on hiatus

Deal breakersO InfrastructureO Rights to develop / entitlementsO Funding contingenciesO Can you land bank?

TimelineO Option to Purchase agreement

signed – April, 2004O Purchased – June, 2005O HAC land bank loan - 2005O Design – proposed map September,

2006O Entitlements approved – February,

2007

The ProjectO 126 Single family homes in three

phasesO 96 Multifamily rental units in two

phasesO Neighborhood parkO Shared costs through assessment

districtO New water well for communityO New sewer lift station

Promises, promises

If you wish to be a success in the world, promise everything, deliver nothing.Napoleon Bonaparte

Some stuff worksO Rental housing development – better

than hoped forO First project funded – HOME 2008,

LIHTC 2009, placed in service 2010O Second project funded – HOME 2010,

LIHTC 2011, placed in service 2012

Parksdale Village I

Community Room

Some stuff doesn’t work

O Single family first phase – 49 lotsO First self-help group started June,

2010O Second group started October, 2010O Third truncated group started

December, 2011O Currently 23 lots remaining, no new

builders approved

What Happened?O Peak of real estate value in California

– 2006O By 2008, real estate values down at

least 30% from peakO By 2010, at least 50% down

How bad can it get?O Sewer lift station nightmareO AppraisalsO Loss of subsidies (eg. School fees)O New requirements, new costs

(sprinklers, Energy Star)

What have we learned?O Smaller projectsO Promises from local jurisdictions

often mean less than intendedO Beef up your kneepads

Parksdale Village II

The future, brightlyO Allocating costs to future phasesO Building when conditions dictateO Watch for RD eligibility

Why we persevere