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Preservation - RE:Conference 2014
- 1. RE:Invest Preservation #ReConf2014 | NeighborhoodPartnerships.org
- 2. Changes and Opportunities In the Housing Preservation Landscape Rob Prasch, Preservation Director Network for Oregon Affordable Housing October 29, 2014 www.PreserveOregonHousing.org
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- 7. Why has the Oregon Housing Preservation Project been necessary and who made it possible?
- 8. The Problem - 2007 Much of Oregon’s federally subsidized housing stock was thought to be in jeopardy as properties with long term Rental Assistance contracts were coming to the end of their original contract terms When contracts expired owners would decide whether to: Renew their subsidy contracts, often at reduced rents Opt out of their subsidy contracts and convert to market rate apartments or other uses, or Sell to new owners interested in maintaining long-term affordability
- 9. How big was the problem – What was really at risk? Estimates were as many as 7,300 of the state’s federally subsidized apartments were at risk of being converted to market-rate between 2007 and 2013 122 OHCS Bond Financed Section 8 Projects built between 1974 and 1983, 4,086 units with Section 8 Contracts 214 USDA Rural Development projects, 4,566 units with Rental Assistance Contracts Approximately 150 HUD-financed properties with Project Based Section 8 contracts (including old 202 and 811 projects) These properties are located in communities across the state and sometimes are the only rental properties
- 11. Who lives in subsidized housing?
- 12. The Response - 2008 The Oregon Housing Preservation Project (OHPP) Formed under the leadership of OHCS and the City of Portland Included housing industry experts from the public, nonprofit, and private sectors Philanthropy played a critical role - Particularly Meyer Memorial Trust The OHPP Steering Committee established program goals and adopted strategies to respond to the threat of losing thousands of affordable homes
- 13. The Steering Committee set the goals for the OHPP Between 2007 and 2013 preserve 80% of the federally rent-assisted apartments at risk of conversion to market-rate = 5,840 homes Safeguard an estimated $30 million in annual federal rent subsidy associated with these units Build support in the Oregon Legislature for dedicated preservation funding Remove barriers and achieve lasting systems improvements to housing assistance contract renewal, property transfer, and public financing processes
- 14. The five strategies of the Oregon Housing Preservation Project Create a Database of Oregon’s Affordable Housing Projects Create the Oregon Housing Acquisition Fund Streamline Housing Agency Processes – Inter Agency Working Groups Incorporate Green/Sustainable Practices in project renovations Provide information to residents when contract opt-outs are threatened
- 15. Accomplishments to date Create a Database of Oregon’s affordable housing PreserveOregonHousing.org has a database and other resources Create the Oregon Housing Acquisition Fund 20 loans made to date, $35 million, 817 units preserved or created Streamline Housing Agency Processes Inter-Agency Working Groups meet regularly Incorporate Green/Sustainable Practices in renovations $400,000 Green Pilot Program grants contributed to $10 million in upgrades Provide information to residents when contract opt-outs are threatened Community Alliance of Tenants provide valuable information to residents
- 16. Has it worked? Preserved Property Totals 2006-2014 Preserved Properties (Includes 9 MHPs) 181 Preserved Assisted Properties 172 Rent Assisted Units 6,115 Total Units 7,792 Recapitalized Assisted Properties 116 State Funds Invested $77,364,176 Other Capital Sources $551,404,544 Construction Contracts $199,343,869 Jobs Created 5,407 Total Project Costs $628,768,720 Federal Subsidy Retained $745,552,349 Average Resident Household Income $10,197
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- 22. What’s Next? There’s much more to do and many projects remain at-risk • Hot multifamily rental markets have pushed rents up/vacancies down • Increased risk of opt-outs due to higher property values • Rural Development 515 mortgages are beginning to mature • Many of the more attractive properties have been preserved • More challenging projects remain, new approaches/tools needed • Many small projects remain at risk and are concentrated in rural markets
- 24. Oregon’s Charitable Foundations Led the Way Meyer Memorial Trust: $5.2 million Collins Foundation: $500,000 Oregon Community Foundation: $120,000 The Oregon Legislature allocates $1 Million in General Funds Oregon Housing and Community Services contributes $1 million The John D. and Catherine T. MacArthur Foundation of Chicago awarded $5 million to Oregon’s preservation effort Four Oregon Commercial Banks commit to the Acquisition Fund Individual contributors made substantial commitments
- 25. Oregon Housing and Community Services Preserving Affordable Rental Housing Julie Cody Assistant Director, Housing Finance
- 26. Overview • HCS Role in Preserving Affordable Rental Housing • Upcoming & Current funding opportunities – Preservation NOFA (Lottery Backed Bonds) – 2014 NOFA (HOME, LIHTC) – 2015 NOFA • Questions? 26
- 27. OHCS Role in Preserving Affordable Rental Housing 27 • OHCS participates in the Oregon Housing Preservation Project • Funds for preservation are set aside within competitive funding cycles • Lottery Backed Bonds committed by the Oregon Legislature
- 28. Current & Upcoming Funding Opportunities 28 • Preservation NOFA – Oregon Legislature dedicated Lottery Backed Bonds for Preservation – $6 million available this fall – Eligibility & Award Methodology • Manufactured Home Parks NOFA – $1.5 million
- 29. Current & Upcoming Funding Opportunities 29 • 2014 NOFA – HOME – LIHTC – November 7: State Housing Council Approval • 2015 NOFA – Timing – Feedback from 2014, Minor Updates for 2015
- 32. Preservation Partnership • Portland • HUD • Oregon Housing & Community Services • NOAH Meyer Memorial Trust, John D. and Catherine T. MacArthur Foundation
- 35. 11 x 13 Over 700 affordable homes More than $20M in federal rent subsidy
- 36. 11 x 13 City of Portland invested $22 million TIF - local urban renewal dollars HUD guaranteed Section 108 loans CDBG and HOME Leveraging $110M in other private/public investment
- 37. Hawthorne East Northwest Housing Alternatives 70 units Bronaugh Apartments REACH CDC 60 units
- 38. Patrick J. Shea, Director Portland Multifamily Program Center
- 46. Brookside Rose Apartments Phoenix, 0regon Shelly Cullin Vice President of Development Chrisman Development, Inc.
- 47. Transaction involved consolidation of two USDA Rural Development senior apartment complexes: • Brookside Apartments (40 units) originally constructed 1988 • Rose Court Apartments (36 units) originally constructed 1987 • 55 units of USDA Rental Assistance (72%) • 7 Section 8 Tenant Voucher holders • 14 non-assisted units • Project Rents: $566 (100% of the units 1-bdrm)
- 48. Financing: Sources LIHTC Equity $ 7,667,000 USDA Assumption 2,611,834 OAHTC Perm Loan 500,000 MPowerOregon 112,384 Energy Trust of Oregon 35,261 Project Cash flow 15,634 $10,942,113 Construction Loan: $1,990,000
- 49. Financing: Uses Acquisition Costs $ 4,102,231 ($53,977 p/u) Rehabilitation Costs 4,279,000 ($56,303 p/u) Development Costs 2,560,882 ($33,696 p/u) $10,942,113 ($143,976 p/u) -Predevelopment Costs Approximately $400,000
- 50. Scope of Rehabilitation: 4,279,000 ($56,303 per unit) Replace Siding/Painting Windows Roof/Gutters/Downspouts Insulation Landscaping Asphalt seal coat/striping Sidewalk repairs Site Lighting Steel Stairs & Railings Interior/Exterior Doors Window Replacement Flooring Cabinets Countertops Appliances Hot Water Heaters Toilets/sinks/tub/shower HVAC/PTAC Units 2 ADA Unit Conversions
- 51. Brookside Apartments - Before
- 52. Brookside Apartments - After
- 53. Rose Apartments Under Construction
- 54. Financing Partners: Oregon Housing and Community Services USDA Rural Development US Bank Enterprise Community Investment MPowerOregon Energy Trust of Oregon Development Team: Chrisman Development, Inc. W.C. Construction Pinnacle Architecture Bateman Seidel Silver Consulting Viridian Management, Inc.
- 56. Northwest Housing Alternatives (NHA) creates opportunity through housing. Tonight, over 2,600 Oregonians in 1,864 units spread across 16 counties will fall asleep in safe, dignified, and affordable homes developed by NHA. The housing NHA develops is designed for families with children, older adults, and people with special needs.
- 57. Siuslaw Dunes NHA’s Siuslaw Dunes Apartments represent a scarce affordable housing resource for families living in Florence Oregon. Siuslaw Dunes offers 1, 2, and 3 bedroom apartments. Market analysis identified over 800 households earning under $15k annually (50% MFI) in the primary market. Siuslaw Dunes’ 45 apartments only meet 5% of the current demand for affordable housing in the area. The average Siuslaw Dunes household earns just over $7k a year. 80% of Siuslaw Dunes head of household has special needs. All tenant apartments include Section 8 subsidies.
- 58. Siuslaw Dunes 9% LIHTC project - $4.1M in equity generated from tax credits OHCS sources: $1M in HOME funds; $500,000 in Preservation funds; $200,000 Trust Fund from OHCS $15,000 OHAP Green Grant $1.6M permanent mortgage $7.6M total project cost; completed summer 2014
- 59. Hollyfield Village NHA’s Hollyfield Village is one of only two affordable housing options for seniors in Lake Oswego. Hollyfield Village offers one and two bedroom apartments for seniors aged 62 and older. Due to the high cost of housing in Lake Oswego, Hollyfield Village was in jeopardy of market rate conversion. The high demand for affordable homes and lack of turnover created significant supply shortage for both “market” and “restricted” rentals in the market. The average Hollyfield Village households earns under $14k a year. All tenant apartments include Section 8 subsidies. HUD authorized Residual Receipts contribution: $613,642
- 60. Hollyfield Village 9% LIHTC project - $3.5M in equity generated from tax credits Green energy grants: $30,000 from Energy Trust; $15,000 OHAP Green Grant $1.4M permanent mortgage with OAHTC $5.8 M total project cost Completed Winter 2013
- 61. MANUFACTURED HOUSING COOPERATIVE DEVELOPMENT
- 62. Our Vision Manufactured housing park residents in Oregon achieve long-term security and build assets through the creation of resident-owned communities (ROCs). Key Strategic Priority Develop a comprehensive manufactured housing community acquisition and preservation program with the capacity to provide financing and technical assistance to manufactured homeowners in Oregon who wish to purchase, govern and manage their communities.
- 63. Resident-Owned Community Conversions Horizon Homeowners Cooperative Green Pastures Senior Cooperative Saunders Creek Homeowners Cooperative Vida Lea Community Cooperative Clackamas River Village Cooperative West-Side Pines Cooperative Bella Vista Estates Cooperative Location McMinnville, OR Redmond, OR Gold Beach, OR Leaburg, OR Clackamas, OR Bend, OR Boardman, OR Purchase Price $1,200,000 $1,400,000 $900,000 $1,485,000 $5,000,000 $3,650,000 $3,150,000 Conversion October 2008 October 2009 April 2011 February 2012 October 2012 July 2013 January Date 2014 Community Type Non-rural, Family, Farmworkers Non-rural, Senior Rural, Family (predominately Senior) Rural, Senior Non-rural, Family Non-rural, Family Rural, Family, Farmworker s Number of Spaces 30 51 43 33 76 71 127 Lenders CASA Shorebank (now Craft3) OHCS NOAH, CASA, OHCS CASA, RCAC, OHCS NOAH, CASA, OHCS ROC Capital NOAH, CASA, OHCS, City of Bend Banner Bank, RCAC, CASA, OHCS Average Age of Homes Majority Pre- 1976 Majority Pre- 1976 Majority Pre- 1976 DW 1979 – 1989 SW Majority Pre-1976 1987 Majority Pre- 1976 Majority pre-1976 Annual Incomes 100% under 80% AMI 95% under 60% AMI 81% under 40% AMI 5% over 80% AMI 93% under 80% AMI 83% under 60% AMI 20% over 80% AMI 80% under 80% AMI 51% under 50% AMI 98% under 80% AMI 66% under 80% AMI 65% under 80% AMI 79% under 80% AMI Preservation price per space (not including capital improvements) $40,000 $27,450 $20,930 $45,000 $65,790 $51,410 $26,695
- 64. West-Side Pines Cooperative Bend, OR Family Park – 71 spaces
- 65. Vida Lea Community Cooperative Leaburg, OR Senior Park – 33 spaces Before
- 66. Vida Lea Community Cooperative Leaburg, OR Senior Park – 33 spaces After
- 67. Vida Lea Community Cooperative Leaburg, OR Senior Park – 33 spaces After
- 68. Green Pastures Senior Cooperative Redmond, OR Senior Park – 51 spaces
- 69. What’s Next? There’s much more to do and the OHPP impact remains strong • Strong multifamily rental markets have pushed rents up/vacancies down • Increased risk of opt-outs due to higher property values • Rural Development 515 mortgages are beginning to mature • Many of the more attractive properties have been preserved • More challenging projects remain, new approaches/tools needed • Many small projects remain at risk and are concentrated in rural markets • Extremely low income and vulnerable Oregonians are impacted every time an assisted property is lost
- 70. Contacts Rob Prasch, NOAH 503 501-5688 robp@noah-housing.org Michael Parkhurst, Meyer Memorial Trust 503 228-5512 michael@mmt.org Julie Cody, OHCS 503 986-2106 julie.cody@state.or.us Barbara Shaw, Portland Housing Bureau 503 823-3339 Barbara.Shaw@portlandoregon.gov Patrick Shea, US Dept HUD 971 222-2657 patrick.shea@hud.gov Shelly Cullin, Chrisman Development, Inc. 541 398-1013 shelly@chrismandm.com Martha McLennan, Northwest Housing Alternatives 503 654-1007 ext 107 mclennan@nwhousing.org Chelsea Catto, CASA of Oregon 503 537-0319 chelseac@casaoforegon.org PreserveOregonHousing.org