2018-10-10 Presentation Housing Authority - Affordable Housing Information Workshop AFFORDABLE HOUSING
INFORMATION WORKSHOP
City of Encinitas
Housing Authority
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CITY OF I
PURPOSE & OUTLINE
Staff to provide overview of
affordable housing in Encinitas
Describe affordable housing K
funding programs
Showcase recent affordable
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housing communities
Panel discussion/Q&A discussion
Receive feedback and direction Cantebria Senior Apartments
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WHAT "AFFORDABLE " •
❑ Affordable Housing
0 30% of monthly income
towards housing
o Deed-Restricted
❑ Area Median Income AMI
for San Diego County
• Department of Housing and
Urban Development
• California Health and Coral Cove
Safety Code
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LOW INCOME
Area Median % 2018 Income Limit 2018 Rent Limit
Income person) (2bd)
Extremely Low 30% $29,200 $552
Very Low 50% $48,650 $920
Low 80% $77,850 $ 1 , 104
Moderate 120% $98, 150 $2,025
2018 San Diego Median Income: $81 ,000
Note: IncomelRents vary based on program and changes annually
AFFORDABLE •
Am 4h aim
❑ 38.5% of households have incomes
less than $75,000 (ACS 2012-2016)
❑ 1 % of housing stock deed restricted
at 80% AMI or below (SANDAG and
City of Encinitas)
❑ Median Sales Price $ 1 , 165,900
(HomeDex)
❑ Median Rent $3,544 (
Manchester Apartments
Policy question to considers Should a deed restricted goal ( Yo) be
established?
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AFFORDABLE • ENCINITAS
Deed Restricted
Apartment Units 136 _ -
Accessory Units 101
Sin le-Family/Condos 65
TOTAL 302 ��'
Pacifico Encinitas
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The Boathouses Su Casa Apartments Esperanza Gardens
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Iris Apartments Pacific Pines Pacific Station
OTHER HOUSING PROGRAMS
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Non-Deed Restricted
Program Funding Households Administering
Assisted Entity
Section 8 Rental Federal — HUD Approx. 100 City of Encinitas
Assistance Housing Authority
Residential Federal — HUD 110 since 2008 City of Encinitas
Rehabilitation Program Development Services
Opening Doors Encinitas - 80 Since 2016 Community Resource
General Funds Center
Down Payment Federal — HUD None County of San Diego
Assistance
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AFFORDABLE •
FEDERAL COUNTY:
• Section 8 Project Based o HOME Funding
Vouchers o Mental Health Services Act
• HUD 202 Program Funding
• Many More o Housing Trust Fund
o STATE: CITY:
• Tax Credits o CDBG Funding (acquisition,
•
Affordable Housing & rehab, site clearance)
Sustainable Communities o Affordable Housing Funds
• Veterans Housing Program
• Many More
WHAT ARE 1 CREDITS ?
Tax Reform Act of 1986 to encourage
public/private partnerships to develop
affordable housing
Governed by Section 42 of the IRS Code
Known as Low-income Housing Tax Credit '
( LIHTC) - VC
Administered by each State
California Tax Credit Allocation Committee (TCAC)
Highly competitive program
Twice per year funding
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HOW DO CREDITS WORK?-
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Tax Credits are a dollar for dollar reduction in federal income tax
liability
Two types of Tax Credits, 9% and 4% Credits:
0 9% and 4% refer to the approximate % of a projects "qualified basis" a
taxpayer may deduct from their annual federal tax liability for ten years
Affordable housing developers awarded with Tax Credits partner
with an equity investor who purchases the credits in order to offset
their tax liability
Developers use equity provided by investors to acquire, construct,
and/or rehabilitate affordable housing
EXAMPLE OF 9 % TAX CREDIT CALCULATION
100 unit project/70 low-income units
Total Development Cost (including land) = $5 .5m
❑ Land cost = $500k
❑ Eligible Basis = $5 .0m
❑ Qualified Basis = $ 3.5m ( $5 .0m x 70%)
Applicable Percentage = 9%
Annual Tax Credit = $ 315,000 ( $ 3.5m x 9%)
❑ 10 year credit total = $ 3, 150,000
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TAX CREDITS ( CONT,, )
Capital or equity received from the sale of Tax
Credits reduces the amount of debt or loans needed
to cover the cost of construction
Remaining amount of funding needed to fill the "gap"
in financing of affordable housing comes from local
jurisdictions and/or other sources
GAP 1
o The City funds "Gap" via Residual Receipts loans
o Low interest loan for the term of the deed restrictions
(usually 55 years)
Paid off from Residual Receipts and refinancing of
the project
Residual Receipts = Cash flow at end of fiscal year
after all a I Iowa ble project operating expenses, debt
service, etc. have been met
PUBLIC / PRIVATE PARTNERSHIP
" Partner w/folks who really have it down"
RECENT AFFORDABLE HOUSING COMMUNITIES
_ilslLAS PALMAS : 1 1
,.&- A� &EMENTE ,National Community Renaissance ,
(CORE) 4% Tax Credits $3,158,265
0 19 one-bedroom units
30%-60% AMI City of San $3,430,000
0
Clemente Loan
o Community room
o
Mixed-use R24 zone State Grant $731 ,000
0 52 net units/acre Developer Loan $400,000
0 2-3 stories; 30 feet 30-year $432,000
Mortgage
Total $8,151 ,265
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OAKCREST HEIGHTS : YORBA LINDA, CA
National Community Renaissance
(CORE) ( Rancho Cucamonga, CAS
0 54 units 9 % Tax Credits $ 15,430,624
0 Families 30%-60% AMI
0 Preschool onsite City of Yorba $5,234,803
Linda Loan
o Community center and services
0
Voter approved R30 sites Other Loans $4,143,094
0 17 net units/acre Developer Equity $ 100,000
0 3 stories; 30 feet Total $24,881 ,521
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CREEKSIDE : 1 MARCOS, 1
Opportune Companies (Encinitas, CA)
0 98 units
0
Families 30% - 60% AMI 9% Tax Credits $221279,806
0 Mixed -use: 26,500 sq. ft. retail City of San Marcos $ 12,281 ,000
0
New street + numerous Loan
infrastructure improvements Total $34,560,806
0 Community amenities and services
0 LEED Silver or equivalent m Ulm [U.m
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0 Mixed-use/R30 zone SIREF1 SCC e£AiONL CREEKS ❑F O[IYF LAAN AYF.LOCNFR•r�r ��
0 29 net units/acre
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0 2-4 stories; up to 60 feet m
STREET SC INE RfONC CREECS I[II[I[I V[-AT YAS[O
THE PROMENADE ATCREEKSIDE
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PARKVIEW : SAN MARCOS,, CA, -9ilil
Hitzke Development (Lemon Grove, CA) •
& C & C Development (Tustin, CA) 9% Tax Credits $ 17,026,867
0 84 units City of San $ 11 ,681 ,583
o Families at or below 60% AMI Marcos Loan
o Mixed Use - 4,000 sq. ft. retail Conventional $ 11106,430
o Community amenities and services Mortgage
o LEED Silver or equivalent ��
HMSA $ 1 ,637,804
o Mixed-use/R30 zone � I
0 20.9 net units/acre
Deferred Fees IW7,4.,8iP���
0 2-3 stories; up to 35 feet Total $31 ,700,510
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WINDSOR POINTE :
—OaLwPLANNED DEVELOPMENJJ
Affirmed Housing (San Diego, CA) Funding (anticipated)
0 50 units; over two sites
o Homeless veterans families Tax Credits $ 15,400,000
0 30% - 60% AMI City of Carlsbad Loan $4,250,000
o R30 zone Affordable Housing $480,000
0 51 .2 net units/acre Program
0 3 stories; 35 feet Other $4,750,000
o Awaiting Funding Total $24,880,000
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Q & A / PANEL DISCUSSION
NEXT STEPS MWO
Develop policies, guidelines, deal point
standards, and incentives
• Late 2018/Early 2019: Workshop and review of draft
documents
• Spring 2019: City Council Consideration
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THA U !
I; CONTACTS - -A
Nicole Piano-Jones: Temporary Housing Coordinator, City of Encinitas --
npiano@encinitasca.gov
Karl Schwarm: Contract Employee -- kshwarm 13@gmail.gov
Ginger Hitzke: President, Hitzke Development -- ginger@hitzkedevelopment.com
Steve Bram: Principal/CEO, Opportune Companies -- steve@opportuneco.com
John Seymour: Vice President of Acquisition & Forward Planning, National Core --
iseymour@nationa lcore.org
Nicki Cometa: Chief Financial Officer, Affirmed Housing -- nicki@affirmedhousing.com