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


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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



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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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11

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.


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.


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)


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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.


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.


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.


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.


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

●

Mayor Announces

3X5 Initiative

●

Mayor’s Housing Advisory

Committee Convened

●

Housing Finance

Task Force Convened

●

Task Force Recommendations

Adopted

●

Revolving Affordable

Housing Loan Fund

Established

●

Housing Plan

Published

●

Phase I IHO Revisions

●

BBC Housing

Gap Analysis

NSPIII Competitive Grant Award

● ●

Phase II IHO

Revisions

●

Metro Mortgage Assistance Plan

Established

●

Housing Plan

Outreach

●

Mile High TOD Fund

Established

●

$3M Capitalization of IHO Fund

●

IHO Rules & Regs. Adopted

Dedicated Housing

Fund Announced

2016●

Preservation Ordinance Revisions

●

Preservation Mapping Tool

Developed

OED’s Historic accomplishments

$150M Dedicated

Fund Adopted

●

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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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


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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housing advisory committee retreat - denver€¦ · 17/09/2001 · the january 2016 point-in-time...

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