Housing Advisory Committee Retreat Monday, January 9, 2017 1 - - PowerPoint PPT Presentation

Housing Advisory Committee Retreat

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

a thriv ivin ing bu busin iness envir ironment through business recruitment and expansion, minority and women owned business certification programs, and technical assistance to entrepreneurs

• De

Developing a a skilled w 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

• Expa

panding affordable h hous using o

• pt

ptions 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

• Cr

Creating sus ustainable ne 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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5 Source: 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 i n inc ncome med edian r ren ent median h home p price ( (SFR) median h home p e 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

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Need for affordable housing

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Kindergarten Teacher Reporter Chiropractor Locksmith

Afford rdable le 1 1BR Fo For-Sale H Home $1 $169, 69,084 Med edian Den Denver Fo For-Sale C Condo $299, $299,083 83 60% 60%

median income

($ ($33,600)

Afford rdable le 1 1BR Rental H l Home $90 $901 Med edian Den Denver 1BR R Renta tal $1,229

Bus Driver Pharmacy Technician Cabinetmaker Veterinary Technician

80% 80%

median income

($ ($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% 0% A AMI 80% 0% A AMI 100% 0%+ A + AMI 30% 0% A AMI

33,000 29,000 19,000 13,000 6,000

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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11

If the new home is a marke ket-rate h hom

• me,

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 marke ket-rate h hom

• me,

the money paid by the renter or new homeowner is enough to pay back the investors or lenders. If the new unit is an affo ford rdable h home, it costs the developer the same amount to build. But the renter

• r 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 n most cases, t the pub public sector ne needs t to h help o p out ut to make it f feasible le t to build ld a affordable le 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 deb debt and feder ederal Low-Incom

• me H

Housing T Tax Credits ( s (LIHTC).

• Non-profit and for-profit developers can raise debt

from banks or other financial institutions

• LIHTC are allocated by CHFA

FA for all projects in Colorado 9% L LIHTC provide equity for about 70% of project cost

• sts, and are allocated once per year in a

competitive process. 4% L LIHTC provide equity for only about 30%-40% o

• f

f proj

• ject c

cost

• sts, but they have a rolling application and

are non-competitive. Affordable p projec ects th that t rec eceive ei eith ther ty type of LIHTC st still n need ad additional “ “gap ap financing” t to

• have enough

capital al t to build a affordab able u units. s.

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 annua nnual resour urces for h hous using d development, p preservation a and nd p programs

Funding ng s sour urce Typical u uses Amount nt 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 .05 milli llion

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

CDB DBG* HOME HOME

average Den Denver er 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.

OE OED res resources es f for af r affordable ho housing

Background on Denver’s dedicated fund

• Pr

Property T Tax ax*

– 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.

• Developme

pment F 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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Developme pment f 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/Other Industrial/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 prioriti tizes i investment t into ar areas eas of the e city wi with access t to transportation including 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 p prior

• ritizes i

investment into n neighb hborho hoods vulnerab able le t 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 prio iorit itize zes in investment in into n neig ighborhoods wit ith hig igh “ “ac access t to o

• pportunity”

fact ctors 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

• pportunity

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OED’S HOUSING PROGRAMS

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OED’s Affordable housing toolkit Land A Acquisit isition 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 C 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, 2,188 88

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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

Preservat ation OED invests into preservation

• f 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

Hous using ng P Programs - Ren ental

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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Hous using ng P Programs - Homeown wnersh rship

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 24 7 5 22 107

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 2015 2012 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

• f 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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Acces cess to Affor

• rdable H

Housing i in Denver - Units/V /Vou

• uchers A

Available i in 2016 Ho Housing T Type ype Number o

• f U

Units/Vouchers Coven enant R Res estricted R Rent ental U Uni nits 22,098 Inclusion

• nary H

Housing O Ordinance ( (IHO) F For-Sale le U Units 1,237 No Non-IHO R Rezo zone A ne Agreement eement F For-Sal ale U Units (predating the IHO in 2002) 154 No Non-IH IHO F For-Sal ale U Units (Denver Office of Economic Development, funded since 2009) 68 Denver O Office o

• f E

Econ

• nom
• mic D

Development - Tenan ant B Based R Rental al A Assistan ance V Vouchers (funded through 2015 HOME program) 58 Denver H Housing A Authority - Tenant B Based H Housing C Choice/Section

• n 8

8 Vouchers 5,862 Denver H Housing A Authority - Proj

• ject B

Based V Vou

• uchers

870 Color

• rado D
• Division
• n o
• f H

Housing - Tenant B Based R Rental A Assistance V Vouchers (Denver specific data, funded through 2015 HOME program) 20 Color

• rado D
• Division
• n o
• f H

Housing - Tenant B Based H Housing C Choice/Section

• n 8

8 Vouchers (Denver specific data) 1,236 Color

• rado D
• Division
• n o
• f H

Housing - Proj

• ject B

Based V Vou

• uchers

(Denver specific data) 120 TOTAL N NUMBER O OF HOUSE SEHOLDS IN AFFORD RDAB ABLE H HOMES 31,7 ,765

Note 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 By the end o

• f 2017 w

we w will ll deliver o

• n that g

goal al a ahead ad o

• f schedule

le.

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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: – Implementat atio ion: Action items to effectively and efficiently invest funds into projects and programs – Compreh ehen ensive P e 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 Housing Advisory 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

Hous using ng Fund und Implementa tation n Steps

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Ta Task Timeli line Final alize H Housing F Fund Rule les and R Regulat lation

• ns

January 2 2017 17 Begin q quar arterly ly Housing D Division

• n newsle

letters Q1 Q1 2017 17 Up Updat ate O OED’s H Housing D Division

• n w

webs bsite Q1 Q1 2017 17 Begin q quar arterly ly Housing D Division

• n newsle

letters Q1 Q1 2017 17 Final alize com

• mpli

lian ance a and monitor

• ring r

requirements for loc

• cal f

al funds Q1 Q1 2017 17 Rele lease R RFP for T Tempor

• rar

ary E Emergency Assistan ance Q2 Q2 2017 17 Rele lease R RFP for I Innovative H Housing S Solu lutions Q2 20 2 2017

Implementation Next Steps

Hous using ng Fund und Implementa tation n Steps s cont nt.

45

Ta Task Timeli line Imp mpleme ment 2 2017 standard f fin inancial products f for

• r h

hou

• usin

ing in investments Ongo ngoing ng Imp mpleme ment 2 2017 revised a application f for h housing i investments Ongo ngoing ng

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

48

Implementation Comprehensive Planning Advisory Committee Production Goals Program/Policy Development Budget Priorities

Comprehensive Planning Next Steps

Compreh ehen ensive P e Planning g Step eps

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Ta Task Timeli line Convene A Advisor

• ry C

Committee, kick o

• ff C

Comprehensive P Planning pro rocess January 2 2017 17 Sele lect C Comprehensive P Plan c consult ltan ant(s) t throu

• ugh com
• mpetitive p

proc

• cess

January 2 2017 17 Final alize c com

• mpon
• nents o
• f Comprehensive Plan and ov
• verall

commu mmunity/stakeho holder o

• utreach

h plan w with h input f from A m Adviso sory Commi mmittee Febr bruar ary 2017 17 Begin d data c a colle llection

• n a

and o

• utreac

ach f for Comprehensive Planning pro rocess Febr bruar ary 2017 17

Comprehensive H Hous using P Plan n mus ust b be sub ubmitted to Coun uncil f for adopting b by S September 1, 2017.

FORMAL STRUCTURE

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