Housing Authority of the City and County of Sacramento Asset - PowerPoint PPT Presentation

Housing Authority of the City and County of Sacramento Asset Repositioning Update

Issues Facing Public Housing • 1) Housing Stock is aging • 2) Federal Government has not adequately funded Public Housing for past 17 years • 3) Local Demand for affordable housing continues to increase • 4) Sacramento has to find a way to preserve and maintain its housing portfolio

2008 Initial Assessment Target Accomplished Central City downtown elderly/disabled Substantial Rehabilitation of five downtown • • high rise buildings structures (Washington Plaza, Sierra Vista , Sutter view, Edge Water and Riverview); Large family developments such as Twin • Rivers, Marina Vista, Alder Gove Award of a Choice Neighborhood Planning • grant for Marina Vista and Alder Grove; Small scattered sites throughout the City and • County of Sacramento. Award of Choice Neighborhood Planning • Grant for Twin Rivers Choice Neighborhood Implementation Grant • for the Twin Rivers site. Relocation and demolition of the first phase of the project have been initiated; Transferred 33 City and 13 County Scattered • Site units to the Neighborhood Stabilization Program (NSP) Transferred 52 City and 23 County Scattered • Site units to the Purchase and Resale Entity (PRE)

CSG Assessment • Physical condition of the properties via Physical Needs Assessments • Financial record of property budgets for past 3 years • Historical data of properties • HUD Guidelines – Conversions – Disposition – Funding for Public Housing

Millions $100 $150 $200 $250   $50 $0 Average Annual Capital Funding between 2016-2018 is $4.8M. Total 20-Year Capital Need is $204M. Average per year need is $10.2M. $58 2018 $10 $64 2019 $15 $80 2020 $20 $83 2021 PNA v. Capital Funding $25 $96 2022 $29 $104 2023 $34 Capital Need $109 2024 $39 $117 2025 $44 $120 2026 $49 Capital Funding $135 2027 $53 $140 2028 $58 $148 2029 $63 $155 2030 $68 $157 2031 $73 $172 2032 $77 $179 2033 $82 $186 2034 $87 $202 2035 $92 5 $204 2036 $97

20-Year Unfunded Capital Unfunded Capital Need $250 Millions $214M $214 $211 $200 $185 $173 $163 $142 $140 $150 $132 $122 $118 $67 $68 $80 $87 $90 $98 $99 $100 $50 $53 $50 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Based on inflated capital need and capital funding, the 20-year unfunded capital need  is $214M. 6

CSG Conclusions to Stabilize Public Housing • Convert Scattered Site Properties (4 or less units) • Convert properties above 5 units under Rental Assistance Demonstration Program (RAD) • Eligibility for Demolition

Scattered Site Portfolio Of the 218 Scattered Site units, 52 (24%) are included in this analysis, based on the • number of PNAs received by CSG. Increased number of scattered sites in an analysis would allow different groups of • scattered sites and an increase in revenue from potential sales. 70% of scattered sites are located within the city of Sacramento, with the remaining • scattered sites in Sacramento County. 8

Scattered Sites Scattered Sites HUD provides PHAs the ability to dispose of scattered site units because the PHA demonstrates an unsustainability to operate and/or maintain due to distance between units and lack of uniformity of systems. Scattered site units generally mean units in non- contiguous buildings with four or fewer total units. Total Units in SHRA Portfolio that Qualify as Scattered Sites 9

What Is RAD RAD is a program that converts Public Housing to the Project Based Section 8 Platform • RAD allows public housing agencies to leverage public and private debt and equity in order to • reinvest in the public housing stock and improve public housing units . This is critical given the 25.6 billion dollar backlog of public housing capital improvements. In RAD, units move to a Section 8 platform with a long-term contract that, by law, must be renewed. • This ensures that the units remain permanently affordable to low-income households. Residents continue to pay 30% of their income towards the rent and they maintain the same basic • rights as they possess in the public housing program. RAD maintains the public stewardship of the converted property through clear rules on ongoing • ownership and use. The RAD program is cost-neutral to HUD and does not increase HUD's budget . This program simply • shifts units from the Public Housing program to the Section 8 program so that providers may leverage the private capital markets to make capital improvements. RAD creates greater funding certainty while allowing increased operational flexibility to empower • PHAs and owners to serve their communities.

What does RAD Do?

Tenant Benefits • Right to information • Right to Rental Assistance • Right to return • Right to relocation assistance • Right to organize Resident Councils • Continued rent at 30% of adjusted household income

Section 18 – Demolition Demolition For the demolition of an entire development, the development is obsolete as to physical condition, location, or other factors, making it unsuitable for housing purposes, and no reasonable program of modifications is cost-effective to return the public housing project or portion of the project to its useful life. To evidence obsolescence for demolition of a project, PHAs must show that the necessary modification and/or rehabilitation to a project is not cost-effective. HUD generally considers modifications not to be cost-effective if costs exceed 62.5% of Total Development Cost for elevator structures and 57.14% for other types of structures. Units That Qualify for Demolition 13

City of Sacramento Summary Transitioning to  RAD can help the City of Sacramento address $93M in 10-year Capital Needs for 1,514 units. 14

County of Sacramento Summary Transitioning  to RAD can help the County of Sacramento address $24M in 10- year Capital Needs for 668 units. 15

Guiding Principles Asset Repositioning Guiding Principles 1. Sustain our commitment to house extremely low income households by adopting a “no net loss policy”, requiring the development of at least an equivalent number of replacement units when units are removed from our baseline inventory. 2. Decrease reliance on federal funding sources by leveraging the use of existing sources with private funding (debt and equity) and other sources (grants and local subsidies). 3. Preserve and enhance existing physical housing stock; upgrading stock whenever possible to a 30 year useful life. 4. Locate new units into sustainable and livable communities that meet the specific needs of residents. 5. Incorporate smart growth principles (i.e. energy efficiency, safety/security, quality of life) into project design to the maximum extent possible. 6. Diversify real estate portfolio in creative ways to support extremely low income units. 7. Maximize utilization of existing resources (i.e. vouchers, local funds, the value of HA real estate assets, etc.) to implement development strategies. 8. Reinvest proceeds from the sale of Housing Authority properties in the replacement of units. 9. Promote and support resident self- sufficiency. 10. Seek creative partnership with other agencies, non-profits, community groups, resident advisory boards, and private sector sponsors. 11. Generate developer fees, sales proceeds, or other revenues to SHRA that at least covers associated costs.

Priority Action 1 • Pilot RAD Conversion Sites Point Lagoon(205) Rio Garden(202) Oak Park(105) Meadow (County) (County) (City) Commons(104) (City) Property Units Property Units Property Units Property Units Address Address Address Address 9205 Elk 16 8223 Walerga 24 4921 10 1043 43rd 28 Grove BLVD Folsom Blvd 4300 El Pariso 36 Ave 4500 Perry 10 Ave Sub Total 62 Sub Total 24 Sub Total 10 Sub Total 28

Priority Action 2 • Resident Outreach – Make residents a part of the process – Engage Community leaders and advocates – RAD Consortium • RAB, Resident Representatives, key stakeholders

Priority Action 3 • Complete Feasibility Analysis – Complete over next 30-60 days – Determine priority properties for conversion • Low to high capital needs • Operating deficits • Revitalization potential • Resident retention • Authority need of gap financing