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City Club of Central Oregon Presentation

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John Gilbert's presentation on Affordable Housing from the City Club of Central Oregon's February Forum

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City Club of Central Oregon Presentation

  1. 1. City Club Forum JOHN GILBERT PACIFIC CREST AFFORDABLE HOUSING February 2017
  2. 2. Part 1 DEFINING AFFORDABLE HOUSING Pacific Crest Affordable Housing
  3. 3. What is Affordable Housing? Subsidized housing for low or moderate income households Pacific Crest Affordable Housing
  4. 4. So, What is Affordable?  Housing costs should not exceed 30% of income  Cost-burdened: 30% or more of income spent on housing  Severely cost-burdened: 50% or more of income spent on housing Pacific Crest Affordable Housing
  5. 5. How Many Are Cost Burdened? Deschutes County renters are worse off than the national average Nationwide 48% Nationwide 74% Deschutes County 52% Deschutes County 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Renters Cost Burdened Low Income Renters Cost Burdened Pacific Crest Affordable Housing *Data from 2015 American Community Survey
  6. 6. Who Qualifies for Affordable Housing? ◦ Area Median Income (AMI) ◦ Low Income: 60% (or less) of AMI ◦ Moderate Income: 60% - 120% of AMI Affordable projects generally serve 30% - 60% of AMI Pacific Crest Affordable Housing
  7. 7. Deschutes County 2016 AMI INCOME LIMITS BY NUMBER OF PEOPLE IN HOUSEHOLD % AMI 1 2 3 4 5 6 30% $12,540 $14,340 $16,140 $17,910 $19,350 $20,790 40% $16,720 $19,120 $21,520 $23,880 $25,800 $27,720 50% $20,900 $23,900 $26,900 $29,850 $32,250 $34,650 60% $25,080 $28,680 $32,280 $35,820 $38,700 $41,580 Pacific Crest Affordable Housing *Data from Novogradac & Company LLP
  8. 8. Who Are We Talking About? $15k - $25k Jobs Home health aides Childcare workers Fast food workers Cashiers Restaurant and hotel staff $25k - $35k Jobs Preschool teachers and teaching assistants Bank tellers Nursing/physical therapy/vet assistants Administrative assistants Construction workers/laborers Working households contributing to society Pacific Crest Affordable Housing
  9. 9. 2016 Deschutes Co. Max Allowable Rents 30% AMI 40% AMI 50% AMI 60% AMI Market Rate Studio $313 $418 $522 $627 n/a 1 bedroom $336 $448 $560 $672 $1,100 2 bedroom $403 $538 $672 $807 $1,200 3 bedroom $465 $621 $776 $931 n/a *Data from Novogradac & Company LLP Affordable rents = roughly 45% of market rents Pacific Crest Affordable Housing
  10. 10. The Funding Gap $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 Cost Value Gap Development costs = roughly $250,000/unit Subsidies are needed to cover the funding gap Pacific Crest Affordable Housing
  11. 11. The Funding Puzzle Sources of Funds LIHTCs $6,292,000 Constr. Loan $5,300,000 Perm. Loan $2,597,000 OAHTCs $2,597,000 HOME Loan $ 895,000 City of Bend $ 275,000 Developer Equity $ 250,000 State Trust Fund $ 100,000 Weatherization $ 60,000 Discovery Park Lodge Funding drives project size – most are between 25 and 50 units Pacific Crest Affordable Housing
  12. 12. Low Income Housing Tax Credits (LIHTC) LIHTCs typically fund about ¾ of a project Tax credits offset federal corporate income taxes on a $ for $ basis for 10 years Developers compete for the credits Developers exchange the credits with investors for cash The cash greatly reduces the amount of debt used Federal government funds affordable housing today by foregoing taxes in the future Pacific Crest Affordable Housing
  13. 13. Allocation of OHCS Funds  Highly competitive  Disarray in tax credit market  New emphasis on preservation Pacific Crest Affordable Housing
  14. 14. Part 2 LOCAL FOCUS THE NEXT FRONTIER Pacific Crest Affordable Housing
  15. 15. LIHTC Projects in Bend Pacific Crest Affordable Housing
  16. 16. Historic Funding ImbalancesBentonCounty LakeCounty ShermanCounty KlamathCounty JosephineCounty PolkCounty CrookCounty LaneCounty BakerCounty DeschutesCounty LinnCounty MarionCounty CoosCounty ClackamasCounty ClatsopCounty JacksonCounty WashingtonCounty ColumbiaCounty DouglasCounty YamhillCounty MalheurCounty JeffersonCounty GrantCounty UnionCounty CurryCounty WheelerCounty TillamookCounty GilliamCounty LincolnCounty WallowaCounty MultnomahCounty UmatillaCounty WascoCounty HarneyCounty MorrowCounty HoodRiverCounty 1 +50% ------ +100% ---- +150% ---- -50% ------ -100% ----- Equitable Allocation *Data from OHCS website Pacific Crest Affordable Housing
  17. 17. City of Bend  Bend Affordable Housing Fund  $1MM in SDC credits  Possible SDC exemptions coming  Low Income Rental Housing Property Tax Exemption  Surplus land available  Height & density bonuses  Expedited review & permitting Pacific Crest Affordable Housing
  18. 18. Other Local Funds and Assistance  Deschutes County  Property Tax Exemptions  Document Recording Fees  Private Land Owners  Private Foundations  Local Lenders Pacific Crest Affordable Housing
  19. 19. Recent Trends  Incorporating sustainability measures into housing design  Combining health and housing  Life cycle cost analysis Little Deschutes Lodge Pacific Crest Affordable Housing
  20. 20. The Next Frontier  Need to develop affordable housing without federal funds  Employer funding  Municipal land  Social investing  Crowd funding  New designs Pacific Crest Affordable Housing

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