Bill Rumpf, Mercy Housing Northwest

Long-Term Project Sustainability:
The New Wave of Preservation
NHC/MacArthur Foundation Partners in Innovation Conference May 17, 2010
Bill Rumpf, President
Mercy Housing Northwest

Federally-assisted stock built during peak period of late 1960s to mid-1970s.
Interventions aimed at preventing for-profit owner opt-outs, market-rate conversation
Success = Long-term affordability restriction
Preservation Classic

Production spurred by 1986 LIHTC and 1990 HOME Program
In Washington State-largely nonprofit, 40-50 year affordability restrictions
Units in operation 20 years+ by 2016:
Seattle: 45% of 11,000 units
Washington state: 40% of 37,000 units
Preservation-Next Generation

Reserve shortfall in at least 1/3 of buildings
Portland HDC Study
Underwriting assumptions
Reserve deposits of $250 to $300. Need=$700/yr
Assumed 2-3% increase in rent, but actuals less
Asset Management capacity has evolved later than development.
What is the Challenge?

Asset/Property Management Affinity Group
Operations Dashboard
Capital Needs Assessment format exchange
Lender refinance panels
Bed Bugs
20-25 active participants
Portfolio Preservation Planning Grants
6groups with 500 units+ each
Operations, Finance and Physical Needs
Seattle/WA State MacArthur Project

Multifamily Weatherization
800 units in 2009. ARRA helped
Statewide Web-Based Reporting
Single electronic report for local, HTF, tax credits
Will enable real-time data analysis
Recapitalization Guide
Seattle/WA State MacArthur Project

Trade-off with resources that otherwise can be used for new units.
Frog in Boiling Water Problem
Housing capital sources are down
Avoiding perverse incentive to be a low-reserve project.
Public Policy/Political Challenge

Develop hybrid staff teams
Break the 2nd-time Funding Taboo
Set cap on resources for existing projects
Competition. Best practice thresholds.
Develop $25-30K solution w/o Tax Credit
Portfolio Flexibility—post Y15
Recapitalization Strategy Ideas

The End

Bill Rumpf, Mercy Housing Northwest

by National Housing Conference & the Center for Housing Policy on May 21, 2010

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Bill Rumpf, Mercy Housing Northwest — Presentation Transcript