Terwilliger Center for Housing Annual Conference

Housing Our Veterans: Engaging Philanthropy and the

Private Sector

March 21, 2013

Terwilliger Center for Housing

Annual Conference

Heather Pritchard

March 21, 2013

THE FOUNDATION’S MISSION

To ensure every veteran has a safe

place to call home.

THE CASE FOR VETERANS Why veterans? Why now?

• Veterans are twice as likely to become homeless as those who

haven’t served.

• 67,000 veterans spent at least one night in a homeless shelter

last year.

• Nearly 4 million veteran households pay more than 30% of

income for housing.

• More than 1.5 million of these households pay more than 50% of

income for housing (severe cost burden).

• Nearly 1 million veterans who own homes are severely cost

burdened, despite having access to VA loans and other

assistance.

• A substantial subset of veterans struggles economically.

Approximately 1.4 million veterans (6.7%) live in poverty and over

4 million have combined family incomes of under $20,000.

THE CASE FOR VETERANS

• The unemployment rate for post-9/11 veterans

ages 18 to 24 is 30.2%, compared with 16.1% for

non-veterans the same age

• Despite falling home prices, many returning

veterans do not earn enough to purchase a

median-priced home and some do not earn

enough to afford a typical two-bedroom rent.

• Veterans with severe housing cost burden are

more likely to have a disability than other

veterans.

• Among veterans, women are more likely to

experience severe cost burden than men.

THE FOUNDATION’S PLEDGE

$80 Million - 5 Years – Veterans Housing Issues

2012 IMPACT

• 2012 Impact

– Contributed $43 million in cash to

2,000 nonprofit organizations

• $24 million to 1,000

nonprofits to support the

repair and rehab of 4,400

housing units for veterans

and their families

– Donated $37 million in product to

1,100 nonprofit organizations,

improving 60,000 homes

• $10 million in donated

products to veterans’

nonprofits

– Completed 1,250 Team Depot

volunteer projects nationwide

• 550 projects focused on

veterans

• Veterans Focus – Since April

2011

– Donated $36 million to more

than 1,400 nonprofit

organizations

– Supported the building or repair

of 7,100 housing units

– Completed 1,000 Team Depot

volunteer projects

• Access to permanent supportive housing.

• Outreach to veterans living in rural areas.

• Serving the housing needs of female veterans.

• Reducing the amount of time it takes to place a

homeless veteran into stable housing.

• Access to employment.

GAPS AND CHALLENGES

• Cloudbreak Communities

• Habitat for Humanity

International

• New Directions

• Operation Homefront

• Purple Heart Homes

• Semper Fi Fund

• U.S. Veterans Initiative

• Volunteers of America

• Mercy Housing

• Center for Veterans Issues

• Carrfour Corporation

• National Church Residences

• Low-Income Housing

Institute

• HELP USA

• Quest 35, Inc.

• Numerous affiliates of

• Habitat for Humanity

• Re-Building Together

THDF PARTNERS

• LISC

• Community Solutions

• Fisher House Foundation

• Housing Assistance Council

• National League of Cities

• National Housing Conference

• National Coalition of Homeless Veterans

THDF PARTNERS

OUR MISSION

TO ENSURE EVERY VETERAN HAS A SAFE PLACE TO CALL HOME

OUR COMMITMENT

$80 MILLION OVER 5 YEARS & THE SWEAT EQUITY OF THOUSANDS OF

ASSOCIATE VOLUNTEERS

www.homedepotfoundation.org

www.facebook.com/homedepotfoundation

Housing Our Veterans:

Engaging Philanthropy and the

Private Sector

Housing Opportunity 2013 - ULI

Debbie Burkart National Vice President Supportive Housing March 2013

Mission: Ending Chronic

Homelessness Among Veterans

• Increase affordable housing supply

• Case management to overcome addictions,

stress disorders & provide family counseling

• Back-to-work programs (outreach, job

placement)

St. Leo Campus, Chicago • 141 units for chronically homeless veterans

• On-site VA health clinic

• Employment center

• Project revitalized a blighted block

• Strong VA support for the project

• NEF invested $11.1 million through multi-investor fund

Strategy: Increase Supply of

Permanent Supportive Housing

PSH combines affordable housing

with onsite services

• Case management

• Employment assistance

• Family services

PSH is cost effective

• HUD reported a 30% reduction

in chronic homelessness over

past two years due to

effectiveness of PSH

Supportive housing has three

interrelated funding hurdles

3/26/2013 Page 15

Rental

Subsidies:

Very Low

Incomes

Services

Funding

Capital

Funding –

HDF-soft $$

LIHTC

BUILDING

Donated

Property

Philanthropy Leverages $$ for PSH

• Predevelopment Costs

• Leverages Public Dollars in

competitive applications by providing

extra points for matching resources

• Gap filler in projects that can’t afford

to borrow hard debt

• Flexible dollars

• Expedites Projects

Pleasant St Apts, Beverly, MA 33 Units- Homeless Vets - Historic Rehab

MA: Gap financing & Leveraging

Points Required

• The Home Depot Foundation wrote a letter

committing $250,000 grant to Pleasant St Apts

for the Low Income Housing Tax Credit

(LIHTC) Application (3% of TDC)

• Boosted score so homeless veterans project

could secure LIHTC in competitive round–

equated to 45% of total financing ($3.35 MM)

• Early commitment to project can tip a project

from planning to production

Concern N. Amityville, Long Island –

60 new units & Community Resource Center

NY: Flexible dollars assisted LIHTC

closing

• Concern Amityville 60 units new housing for homeless

& disabled singles and families with preference for

veterans on former Armed Forces Base, Long Island

• Adjacent to new housing - 28,000 SF former Armed

Forces Recruitment Center – rehab costs $400,000 to

convert into a Community Resource Center (CRC).

Distribution center for food, clothing, toiletries + job

training, case management provided by 5 local Veteran

& Homeless Service Agencies

NY: Flexible dollars assisted LIHTC

closing

• Housing funders required

majority of CRC funding

identified before closed on

housing $$$ – services

instrumental to housing

• Home Depot Foundation

$150,000 commitment to

CRC met housing funders

requirement

CommonBond VAMC Housing – Fort

Snelling, MN: 58 PSH units, Historic Rehab

MN: Gap Filler for permanent

supportive housing for veterans

• Fort Snelling project will rehab 5 historic buildings to

create 58 PSH for homeless single veterans and

veterans families on a VA Medical campus with

obsolete buildings. Building/land donated by VA. Total

development costs: $15.6 MM

• Project received LIHTC, but has a gap financing gap

and needs rent subsidies. Home Depot Foundation

provided early commitment of $300,000 grant –

assisting in filling the gap

Debbie Burkart

National VP, Supportive Housing

National Equity Fund, Inc.

500 South Grand Ave., Suite 2300

Los Angeles, CA 90071

(213) 240-3133

debbieb@nefinc.org

The UnAffordable Housing Strategy

By Tim Cantwell

Cloudbreak Communities’ “Projects”

Over 3,000 bed units placed in service since 1993 with support services provided in collaboration by U.S. VETS, the VA and other

partners as central to each community’s continuum of care

Large-Scale Community with Services

1st Floor: Support Services 2nd Floor: Transitional Housing for Homeless

Floors 3-8: Supportive Housing for Low-Income

Westside II: 2011 LIHTC Addition of 196

Permanent Housing 644 total bed capacity 165 Transitional beds 86 Doubles Supp. Housing SRO 197 Singles Supp. Housing SRO 148 Singles Perm. Housing Eff 48 Singles Perm. Housing SRO

The Challenge

• There is no permanent financing vehicle existing to accelerate the private sector development of supportive housing

• LIHTC is not sized to meet the need and is too saturated

• FHA Insurance Programs limit “commercial” activity including transitional housing programs

• Supportive Housing can’t access the same cost of funds as market rate even if they can produce a return

Vicksburg Financial Structure

• Previous Financial Structure

– 132 Unit Market Rate multifamily apartment

– 148,000 Square Feet placed in service 2007

– $9.5 Wells Fargo

– 5.66% Interest fully amortized over 40 years (non-recourse)

– FHA Insurance program Section 221 D(4)

• Vicksburg

• $9.5M Refinance

• 2.33% Interest fully amortized over 40 years (non-recourse)

• FHA Insurance program Section 221 D(4)

• $285,000 Rate Premium for excess closing costs

Repositioning/Refinancing with FHA

An Opportunity: FHA Section 220

• Section 220 insures loans for multifamily housing projects in urban renewal areas, code enforcement areas, and other areas where local governments have undertaken designated revitalization activities.

• 2 or more units or; Project Needs Substantial Rehab or; Complete construction on bankrupt or foreclosed property

“Commercial” Activity

• Is allowed when

– Meets the needs of the occupants and other residents – Provision of Supportive Services

– Are consistent with local government’s redevelopment plan

• 20% commercial limitation by Field Office

• Waivers above 20% by HUD Headquarters

FHA 220 Opportunity

• If challenges can be overcome, FHA 220 could attract institutional lenders into supportive housing development

• The sector could better facilitate non-competitive 4% tax credits and tax exempt bonds to develop supportive housing

• Better leveraging would exist between homeless grant programs and the permanent housing outcomes they are seeking under the HEARTH Act by building integrated communities

Westside Financial Structure

• Current Financial Structure

– $1.3M City of Inglewood

– $8.5M Pacific Western Bank

– 6.75% Interest amortized over 20 years, a bullet due in 7 years (recourse)

– 112,000 Square Feet

• Westside Residence Hall

• $12M Tax-Exempt Bonds • $12M Proceeds of 4%

LIHTC • $6M Inglewood Tax

Increment • $3M Seller Carry Back or

Land lease • $34M Total Sources • Bond Take-Out with FHA-

Insured Section 220 Mortgage -- Mortgagee

Repositioning/Refinancing with FHA

Market-Based Tools are Needed to Address the Growing Housing Gap for

Low Income Persons

Community Involvement

With compassion and generosity, The Home Depot Foundation has touched and enhanced the lives of the veteran residents at several Veteran Communities operated through Cloudbreak Communities with services provided by U.S. Vets.

Team Home Depot Hawaii at Cloudbreak Hawaii, LLC on August 23, 2011.

Home Depot volunteers - Inglewood CA – Veterans Day 2012

Housing Our Veterans:

Engaging Philanthropy and the

Private Sector

@HarigBlaine @leagueofcities

www.nlc.org

Examples of Single Family Homes

www.nlc.org

Examples of Single Family Homes

• Eugene, OR

www.nlc.org

Examples of Single Family Homes

• Eugene, OR

• Glastonbury, CT

www.nlc.org

Eugene, OR

Veterans Housing Project

www.veteranshousingproject.org

www.nlc.org

Innovative Characteristics:

• Short-term housing (2 years maximum)

www.nlc.org

Innovative Characteristics:

• Short-term housing (2 years maximum)

• Use of “clouded title” properties

www.nlc.org

Innovative Characteristics:

• Short-term housing (2 years maximum)

• Use of “clouded title” properties

• School District leases

www.nlc.org

Innovative Characteristics:

• Short-term housing (2 years maximum)

• Use of “clouded title” properties

• School District leases

• Public seed money

www.nlc.org

Key Stakeholders:

• City of Eugene

– City Manager

– Water & Electric Board

• St. Vincent DePaul Society

• Home Builders Association of Lane County

• Bethel School District

www.nlc.org

Glastonbury, CT

Purple Heart Homes

Manny’s Place

www.purplehearthomesusa.org

www.nlc.org

Innovative Characteristics:

• Use of city-owned land

www.nlc.org

Innovative Characteristics:

• Use of city-owned land

• “Safe” transfer

City to PHH to Veteran

www.nlc.org

Key Stakeholders:

• Town of Glastonbury

• Purple Heart Homes

• Rotary club

• H.E.A.R.T. 9/11

• Local businesses and school

Veterans Rental Housing Initiative ULI Housing Conference

March 2013

Chris Estes President and CEO

National Housing Conference cestes@nhc.org

(202) 466-2121 x230

• Veterans Rental Housing Working Group – brought

together 15 practitioners: developers, syndicators,

lenders, etc.

• What are the barriers to doing rental housing for

Veterans?

• What Recommendations can we make to Congress

to change policy and funding this year?

• Seeking a net increase in resources.

NHC VETERANS HOUSING INITIATIVE

1. Provide additional rental assistance for veterans,

some targeted to create new homes.

2. Temporarily increase the allocation of Low-

Income Housing Tax Credits.

3. Improve the VA’s real estate capability and

flexibility.

RECOMMENDATIONS

4. Make FHA multifamily financing more compatible

with property-based services.

5. Provide additional gap financing for veterans

supportive housing.

Next Steps:

• Hold national Convening in Early April to ensure

buy-in and begin education effort.

RECOMMENDATIONS