preservation - re:conference 2014
TRANSCRIPT
#ReConf2014 | NeighborhoodPartnerships.org
RE:Invest
Preservation
Changes and Opportunities In the Housing Preservation Landscape
Rob Prasch, Preservation Director
Network for Oregon Affordable Housing
October 29, 2014
www.PreserveOregonHousing.org
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Why has the Oregon Housing Preservation
Project been necessary and who made it possible?
The Problem - 2007
Much of Oregon’s federally subsidized housing stock was thought to be in jeopardy as properties with long term Rental Assistance contracts were coming to the end of their original contract terms
When contracts expired owners would decide whether to:
Renew their subsidy contracts, often at reduced rents
Opt out of their subsidy contracts and convert to market rate
apartments or other uses, or
Sell to new owners interested in maintaining long-term affordability
How big was the problem – What was really at risk?
Estimates were as many as 7,300 of the state’s federally subsidized apartments were at
risk of being converted to market-rate between 2007 and 2013
122 OHCS Bond Financed Section 8 Projects built between 1974 and 1983, 4,086 units
with Section 8 Contracts
214 USDA Rural Development projects, 4,566 units with Rental Assistance Contracts
Approximately 150 HUD-financed properties with Project Based Section 8 contracts
(including old 202 and 811 projects)
These properties are located in communities across the state and sometimes are the
only rental properties
Who lives in subsidized housing?
The Response - 2008
The Oregon Housing Preservation Project (OHPP)
Formed under the leadership of OHCS and the City of Portland
Included housing industry experts from the public, nonprofit, and private sectors
Philanthropy played a critical role - Particularly Meyer Memorial Trust
The OHPP Steering Committee established program goals and adopted strategies to respond to the threat of losing thousands of affordable homes
The Steering Committee set the goals for the OHPP
Between 2007 and 2013 preserve 80% of the federally rent-assisted apartments at risk of conversion to market-rate = 5,840 homes
Safeguard an estimated $30 million in annual federal rent subsidy associated with these units
Build support in the Oregon Legislature for dedicated preservation funding
Remove barriers and achieve lasting systems improvements to housing assistance contract renewal, property transfer, and public financing processes
The five strategies of the Oregon Housing
Preservation Project
Create a Database of Oregon’s Affordable Housing Projects
Create the Oregon Housing Acquisition Fund
Streamline Housing Agency Processes – Inter Agency Working Groups
Incorporate Green/Sustainable Practices in project renovations
Provide information to residents when contract opt-outs are threatened
Accomplishments to date
Create a Database of Oregon’s affordable housing
PreserveOregonHousing.org has a database and other resources
Create the Oregon Housing Acquisition Fund
20 loans made to date, $35 million, 817 units preserved or created
Streamline Housing Agency Processes
Inter-Agency Working Groups meet regularly
Incorporate Green/Sustainable Practices in renovations
$400,000 Green Pilot Program grants contributed to $10 million in upgrades
Provide information to residents when contract opt-outs are threatened
Community Alliance of Tenants provide valuable information to residents
Has it worked?
Preserved Property Totals 2006-2014
Preserved Properties (Includes 9 MHPs) 181
Preserved Assisted Properties 172
Rent Assisted Units 6,115
Total Units 7,792
Recapitalized Assisted Properties 116
State Funds Invested $77,364,176
Other Capital Sources $551,404,544
Construction Contracts $199,343,869
Jobs Created 5,407
Total Project Costs $628,768,720
Federal Subsidy Retained $745,552,349
Average Resident Household Income $10,197
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What’s Next?
There’s much more to do and many projects remain at-risk
• Hot multifamily rental markets have pushed rents up/vacancies down
• Increased risk of opt-outs due to higher property values
• Rural Development 515 mortgages are beginning to mature
• Many of the more attractive properties have been preserved
• More challenging projects remain, new approaches/tools needed
• Many small projects remain at risk and are concentrated in rural markets
Michael Parkhurst
Oregon’s Charitable Foundations Led the Way
Meyer Memorial Trust: $5.2 millionCollins Foundation: $500,000 Oregon Community Foundation: $120,000
The Oregon Legislature allocates $1 Million in General Funds
Oregon Housing and Community Services contributes $1 million
The John D. and Catherine T. MacArthur Foundation of Chicago awarded $5 million to Oregon’s preservation effort
Four Oregon Commercial Banks commit to the Acquisition Fund
Individual contributors made substantial commitments
Preserving Affordable Rental Housing
Oregon Housing and Community Services
Julie Cody
Assistant Director, Housing Finance
Overview
• HCS Role in Preserving Affordable Rental Housing
• Upcoming & Current funding opportunities
– Preservation NOFA (Lottery Backed Bonds)
– 2014 NOFA (HOME, LIHTC)
– 2015 NOFA
• Questions?
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OHCS Role in Preserving Affordable Rental Housing
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• OHCS participates in the Oregon Housing Preservation Project
• Funds for preservation are set aside within competitive funding cycles
• Lottery Backed Bonds committed by the Oregon Legislature
Current & Upcoming Funding Opportunities
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• Preservation NOFA
– Oregon Legislature dedicated Lottery Backed Bonds for Preservation
– $6 million available this fall
– Eligibility & Award Methodology
• Manufactured Home Parks NOFA
– $1.5 million
Current & Upcoming Funding Opportunities
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• 2014 NOFA
– HOME
– LIHTC
– November 7: State Housing Council Approval
• 2015 NOFA
– Timing
– Feedback from 2014, Minor Updates for 2015
• Portland• HUD • Oregon Housing & Community Services
• NOAH
Meyer Memorial Trust, John D. and Catherine T. MacArthur Foundation
Preservation Partnership
Over 700 affordable homes
More than $20M in federal rent subsidy
11 x 13
City of Portland invested $22 million
TIF - local urban renewal dollars HUD guaranteed Section 108 loans CDBG and HOME
Leveraging $110M in other private/public investment
11 x 13
Hawthorne East Northwest Housing Alternatives70 units
Bronaugh Apartments REACH CDC60 units
Patrick J. Shea, DirectorPortland Multifamily
Program Center
Brookside Rose ApartmentsPhoenix, 0regon
Shelly CullinVice President of Development
Chrisman Development, Inc.
Transaction involved consolidation of two USDA Rural Development senior apartment complexes:
• Brookside Apartments (40 units) originally constructed 1988
• Rose Court Apartments (36 units) originally constructed 1987
• 55 units of USDA Rental Assistance (72%)• 7 Section 8 Tenant Voucher holders• 14 non-assisted units• Project Rents: $566 (100% of the units 1-bdrm)
Financing: Sources
LIHTC Equity $ 7,667,000USDA Assumption 2,611,834OAHTC Perm Loan 500,000MPowerOregon 112,384Energy Trust of Oregon 35,261Project Cash flow 15,634
$10,942,113
Construction Loan: $1,990,000
Financing: Uses
Acquisition Costs $ 4,102,231 ($53,977 p/u)
Rehabilitation Costs 4,279,000 ($56,303 p/u)
Development Costs 2,560,882 ($33,696 p/u)
$10,942,113 ($143,976 p/u)
-Predevelopment Costs Approximately $400,000
Scope of Rehabilitation: 4,279,000 ($56,303 per unit)
Replace Siding/PaintingWindowsRoof/Gutters/DownspoutsInsulationLandscapingAsphalt seal coat/stripingSidewalk repairsSite LightingSteel Stairs & RailingsInterior/Exterior Doors
Window ReplacementFlooringCabinetsCountertopsAppliancesHot Water HeatersToilets/sinks/tub/showerHVAC/PTAC Units2 ADA Unit Conversions
Brookside Apartments - Before
Brookside Apartments - After
Rose Apartments Under Construction
Financing Partners:
Oregon Housing and Community Services
USDA Rural Development
US Bank
Enterprise Community Investment
MPowerOregon
Energy Trust of Oregon
Development Team:
Chrisman Development, Inc.
W.C. Construction
Pinnacle Architecture
Bateman Seidel
Silver Consulting
Viridian Management, Inc.
Preservation properties
Northwest Housing Alternatives (NHA) creates opportunity through housing. Tonight, over 2,600 Oregonians in 1,864 units spread across 16
counties will fall asleep in safe, dignified, and affordable homes developed by NHA. The housing NHA develops is designed for families with children, older
adults, and people with special needs.
Siuslaw Dunes
NHA’s Siuslaw Dunes Apartments represent a scarce affordable housing resource for families living in Florence Oregon.Siuslaw Dunes offers 1, 2, and 3 bedroom apartments. Market analysis identified over 800 households earning under $15k annually (50% MFI) in the primary market.Siuslaw Dunes’ 45 apartments only meet 5% of the current demand for affordable housing in the area.The average Siuslaw Dunes household earns just over $7k a year. 80% of Siuslaw Dunes head of household has special needs.All tenant apartments include Section 8 subsidies.
Siuslaw Dunes9% LIHTC project - $4.1M in equity generated from tax credits
OHCS sources: $1M in HOME funds; $500,000 in Preservation funds; $200,000 Trust Fund from OHCS
$15,000 OHAP Green Grant
$1.6M permanent mortgage
$7.6M total project cost; completed summer 2014
Hollyfield Village
NHA’s Hollyfield Village is one of only two affordable housing options for seniors in Lake Oswego.
Hollyfield Village offers one and two bedroom apartments for seniors aged 62 and older.
Due to the high cost of housing in Lake Oswego, Hollyfield Village was in jeopardy of market rate conversion.
The high demand for affordable homes and lack of turnover created significant supply shortage for both “market” and “restricted” rentals in the market.
The average Hollyfield Village households earns under $14k a year.
All tenant apartments include Section 8 subsidies.
HUD authorized Residual Receipts contribution: $613,642
Hollyfield Village
9% LIHTC project - $3.5M in equity generated from tax credits
Green energy grants: $30,000 from Energy Trust; $15,000 OHAP Green Grant
$1.4M permanent mortgage with OAHTC
$5.8 M total project cost
Completed Winter 2013
MANUFACTURED HOUSING COOPERATIVE DEVELOPMENT
Our Vision
Manufactured housing park residents in Oregon achieve long-term security and build assets through the creation of resident-owned communities (ROCs).
Key Strategic Priority
Develop a comprehensive manufactured housing community acquisition and preservation program with the capacity to provide financing and technical assistance to manufactured homeowners in Oregon who wish to purchase, govern and manage their communities.
Horizon Homeowners Cooperative
Green Pastures
Senior Cooperative
Saunders Creek Homeowners Cooperative
Vida Lea Community Cooperative
Clackamas River Village Cooperative
West-Side Pines
Cooperative
Bella Vista Estates
Cooperative
Location McMinnville, OR
Redmond, OR Gold Beach, OR Leaburg, OR Clackamas, OR Bend, OR Boardman, OR
Purchase Price $1,200,000 $1,400,000 $900,000 $1,485,000 $5,000,000 $3,650,000 $3,150,000
Conversion Date
October 2008 October 2009 April 2011 February 2012 October 2012 July 2013 January 2014
Community Type
Non-rural, Family, Farmworkers
Non-rural, Senior
Rural, Family (predominately Senior)
Rural, Senior Non-rural, Family
Non-rural, Family
Rural, Family, Farmworkers
Number of Spaces
30 51 43 33 76 71 127
Lenders CASAShorebank (now Craft3)OHCS
NOAH, CASA, OHCS
CASA, RCAC, OHCS
NOAH, CASA, OHCS
ROC Capital NOAH, CASA, OHCS, City of Bend
Banner Bank, RCAC, CASA, OHCS
Average Age of Homes
Majority Pre-1976
Majority Pre-1976
Majority Pre-1976
DW 1979 –1989SW Majority Pre-1976
1987 Majority Pre-1976
Majority pre-1976
Annual Incomes
100% under 80% AMI95% under 60% AMI81% under 40% AMI
5% over 80% AMI93% under 80% AMI83% under 60% AMI
20% over 80% AMI80% under 80% AMI51% under 50% AMI
98% under 80% AMI
66% under 80% AMI
65% under 80% AMI
79% under 80% AMI
Preservation price per space (not including capital improvements)
$40,000 $27,450 $20,930 $45,000 $65,790 $51,410 $26,695
Resident-Owned Community Conversions
West-Side Pines CooperativeBend, OR
Family Park – 71 spaces
Vida Lea Community CooperativeLeaburg, OR
Senior Park – 33 spaces
Before
Vida Lea Community CooperativeLeaburg, OR
Senior Park – 33 spaces
After
Vida Lea Community CooperativeLeaburg, OR
Senior Park – 33 spaces
After
Green Pastures Senior CooperativeRedmond, OR
Senior Park – 51 spaces
What’s Next?
There’s much more to do and the OHPP impact remains strong
• Strong multifamily rental markets have pushed rents up/vacancies down
• Increased risk of opt-outs due to higher property values
• Rural Development 515 mortgages are beginning to mature
• Many of the more attractive properties have been preserved
• More challenging projects remain, new approaches/tools needed
• Many small projects remain at risk and are concentrated in rural markets
• Extremely low income and vulnerable Oregonians are impacted every time an assisted property is lost
Contacts
Rob Prasch, NOAH
503 501-5688
Michael Parkhurst, Meyer Memorial Trust
503 228-5512
Julie Cody, OHCS
503 986-2106
Barbara Shaw, Portland Housing Bureau
503 823-3339
Patrick Shea, US Dept HUD
971 222-2657
Shelly Cullin, Chrisman Development, Inc.
541 398-1013
Martha McLennan, Northwest Housing Alternatives
503 654-1007 ext 107
Chelsea Catto, CASA of Oregon
503 537-0319
PreserveOregonHousing.org