Best Practices in Workforce and Mixed Income Housing

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2010 ULI Fall Meeting Presentation
October 15, 2010
11:00 am to 12:15 pm

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Best Practices in Workforce and Mixed Income Housing

  1. 1. Best Practices in Workforce and Mixed-Income Housing Friday, October 15 11:00 a.m. – 12:15 p.m.
  2. 2. FINANCIAL PARTNERS RBS Citizens Bank NH Community Loan Fund Bowdoin Charitable Trust for Housing Creation NH Housing Finance Authority PNC Bank Town of Hanover Grafton County DEVELOPERS
  3. 3. BACKGROUND • Regional housing shortage • High-cost town • Sustained advocacy effort for work force housing • Town meeting vote • Donated land
  4. 4. PROGRAM CONSTRAINTS • 50% Affordable up to 100% of AMI • Mix of for sale and rental homes PROJECT TIMELINE • Town Meeting votes – 2001 + 2002 • Site plan application – Fall, 2005 • Site plan approval – January, 2007 • Construction start – September, 2007 • Delivery of first buildings – November, 2008…
  5. 5. Total units Planned: 120 • Rentals – 61 units(all complete) • Affordable Rental: 46 (LIHTC) • Market rentals: 15 (all workforce- no restrictions) • Condos – 59 units (36 complete) • Market above workforce: 23 • Market workforce: (no restrictions): 22 • Income-restricted workforce: 14
  6. 6. LESSONS LEARNED 1. Workforce Housing Works – Public Acceptance – Market Acceptance – Successful Public Policy 2. Resist Complexity 3. Beware and Be Vigilant when Ignoring #2 - Deviations from the norm require extreme preparation
  7. 7. 4. Mission-based lenders can play a key role 5. Perceived quality critical in overcoming market skepticism 6. Don’t try to save on affordable unit finishes 7. Do be strategic about location/view decisions 8. Affordable rental development experience does not equate to affordable for sale experience ***
  8. 8. 2010 ULI FALL MEETING AND URBAN LAND EXPO October 15, 2010 Best Practices In Workforce And Mixed-Income Housing
  9. 9. RENAISSANCE SQUARE ENTERPRISE HOMES • Create homeownership and rental opportunities for families from all walks of life • Develop affordable workforce and market- rate housing – Affordable at 30-60% area median income – Workforce homeownership at 60-120% area median income – Market-rate homeownership • Created over 5,000 homeownership and
  10. 10. RENAISSANCE SQUARE
  11. 11. DEVELOPMENT OVERVIEW • 18 Acres • Former failed FHA Section 8: 300+ units • HUD/County Property Control • Community Charette led by Baltimore County and Design Collective • Pattern Book • RFQ/RFP Issued by Baltimore County 2006 • Contract Awarded 2007 • Contract Signed October 2008 RENAISSANCE SQUARE
  12. 12. RENAISSANCE SQUARE
  13. 13. RENAISSANCE SQUARE DEVELOPMENT • 196 units – 81 senior LIHTC – 115 Ownership • 65 Renaissance Credit • 50 Market
  14. 14. RENAISSANCE SQUARE SITE PLAN
  15. 15. RENAISSANCE SQUARE FINANCING • Susquehanna Bank • Maryland DHCD • Baltimore County • Enterprise Green Communities • Enterprise Community Investment, Inc. LIHTC Total Development Cost: $11,715,000 81 Senior Apartments
  16. 16. RENAISSANCE SQUARE WORKFORCE OWNERSHIP • 115 Homes – 65 Renaissance Credit • (60%-115% AMI) – 50 Market • Four Housing Types – Townhouse 1400 s.f. – Cottage 1500 s.f. – Manor 1900 s.f.
  17. 17. RENAISSANCE SQUARE WORKFORCE OWNERSHIP • County Contributions – Land – $4 million Infrastructure • Developer Contributions – $2.1 Million Renaissance Credit
  18. 18. RENAISSANCE SQUARE WORKFORCE OWNERSHIP Construction Financing Susquehanna Bank Revolving Line $3,000,000 Baltimore County $4,131,802 Developer Equity $2,100,000 Total Development Costs $27,472,973
  19. 19. RENAISSANCE SQUARE INCOME STRATIFICATION • 10 HOMES 60-70% AMI • 10 HOMES 71-80% AMI • 15 HOMES 81-90% AMI • 15 HOMES 91-100% AMI • 7 HOMES 101-107% AMI • 8 HOMES 108-115% AMI
  20. 20. RENAISSANCE SQUARE DEED RESTRICTIONS • 15-year re-sale restriction to affordable buyer • Year 1-5 – Down Payment – Equity/Improvement s • Year 6-15 – Down Payment – Equity/Improvement
  21. 21. RENAISSANCE SQUARE Renaissance Credit Permanent Financing 70-80% AMI* Sale Price $225,500 Estimated Closing Costs $ 15,575 Total Needed to Close $241,075 Cash Down $ 2,255 First Mortgage $166,503 Renaissance Credit Second Mortgage $ 72,317 *Income: Family Size of 4 = $64,000 (Presumed Interest Rate: 4.75%/30 years, no mortgage insurance)
  22. 22. RENAISSANCE SQUARE BUYER PROFILE • 26 CONTRACTS • 19 SETTLEMENTS LOW HIGH MEDIAN INCOME $39,000 $200,000 $67,000 HH SIZE 1 4 2.6 EMPLOYER PUBLIC = 62% PRIVATE = 38%
  23. 23. RENAISSANCE SQUARE 2005 • Land Costs • Construction Costs • Skyrocketing Pricing 2010 • Market, Market, Market! • Credit Scores/Eligibility • Financing WORKFORCE HOUSING CHALLENGES

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