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Affordable and Senior Housing

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Due to changing demographics and market conditions, affordable and senior housing projects are becoming more prevalent in discussions about housing types within a community. These projects often provide unique opportunities for revitalization and strategic partnerships. There are an array of incentives available to promote this type of housing. This presentation will explain why we are seeing changes in this particular housing market and what communities can do to create strategies for successful development projects that can help achieve multiple community development objectives.

Published in: Government & Nonprofit
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Affordable and Senior Housing

  1. 1. Affordable & Senior Housing League of Wisconsin Municipalities 2014 Annual Conference October 16, 2014 Presented By: Kurt Muchow, Community Development Consultant v i s i o n t o r e a l i t y
  2. 2. Presentation Outline • What is Affordable Housing? • Why is it important? • Define the Problem • Barriers to Affordable Housing • Community Best Practices • Example Projects
  3. 3. What is Affordable Housing? • Housing Costs (including mortgage or rent payments & utilities) should not exceed 30% of the total household income. • For example: - 2012 Wisconsin Median Household Income = $ 52,627 - Allowable Housing Cost ($52,627 x 30%) = $ 1,315 / month - 80% of Median Income (Moderate Income) = $ 42,100 - Allowable Housing Cost ($42,100 x 30%) = $ 1,052 / month - 50% of Median Income (Low Income) = $ 26,313 - Allowable Housing Cost ($26,313 x 30%) = $ 658 / month - 30% of Median Income (Very Low Income) = $ 15,788 - Allowable Housing Cost ($15,788 x 30%) = $ 395 / month Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
  4. 4. Why Is It Important? Community Development Program Housing Economic Development Public Facilities
  5. 5. Why Is It Important? Lack of affordable housing impacts both communities & individual households! • For Communities: attracting & retaining employment opportunities, providing an adequate quality of life for residents & maintaining quality neighborhoods. • For Households: self sufficiency, stability & decent safe and sanitary housing.
  6. 6. Define the Problem •Wisconsin Population vs. Income Income Level No. of Households % of all Households Moderate Income (50% to 80% of median) 427,958 households 19.23% Low Income (30% to 50% of median) 302,552 households 13.59% Very Low Income (0% to 30% of median) 347,130 households 15.60% Total Very Low to Moderate Income 1,077,640 households 48.42% Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
  7. 7. Define the Problem •Wisconsin Median Household Income vs. Housing Occupancy vs. Allowable Housing Cost Owner-occupied Renter-occupied Description All Households Households Households Median Household Income $52,627 $66,241 $29,425 30% of Household Income $1,315 / month $1,656 / month $735 / month *Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
  8. 8. Define the Problem • Wisconsin Household Income vs. Housing Cost Greater Than 30% % of Owner-Occupied Units % of Renter-Occupied Units Household Income Paying More Than 30% Paying More than 30% Less than $20,000 6.7% 27.1% $20,000 to $34,999 6.6% 14.3% $35,000 to $49,999 5.5% 3.1% $50,000 to $74,999 5.6% 0.7% $75,000 or more 3.2% 0.1% Total 27.6% 45.3% Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
  9. 9. Define the Problem • Single Family Home Affordability Median Single Family Home Sale Prices (Wis. Realtors Association) • 2007 = $ 162,900 • 2011 = $ 132,000 • 2014 (thru August) = $ 148,450 Cost for Median Single Family Home vs. Required Income 2007 2014 • Mortgage Payment (80% loan to value, 20 year term) $ 890 / mo $ 810 / mo • Real estate Taxes $ 270 / mo $ 270 / mo • Utilities (electric, sewer, water, heat) $ 230 / mo $ 230 / mo • Total $1,390 / mo $1,310 / mo • Min. household income to afford Median Priced Home $55,600 $ 52,400
  10. 10. Define the Problem • Multi- Family Affordability (Market Rate) Typical Development Cost for new Multi-Family = $ 100,000 / unit Housing Cost for Multi-Family vs. Required Income • Mortgage Payment (80% loan to value, 20 year term) = $ 660 / month • Real estate Taxes = $ 170 / month • Utilities (electric, sewer, water, heat) = $ 190 / month • Total = $ 1,020 / month • Min. household income to afford Market Rate Apartment = $ 40,800 • Median Household Income for Renters in Wisconsin = $ 29,425
  11. 11. Define the Problem • Senior Housing Aging Baby Boomers are Fueling Growth in the 65 and Older Population • Population of Age 65 and Older Will Surge by 65% by 2030 • Increase in Life Expectancy is Greatly Expanding Population Over 75 • Creates a Significant Demand for Senior Housing • Baby Boomers Hold More Than 70% of U.S. Financial Assets & Over 50% of Discretionary Spending Types of Senior Housing • Independent Living: (Lowest Cost)- Growth+ • Assisted Living: (Avg. Cost $4,180 / Month) – Growth ? • Skilled Nursing: (Avg. Cost $275 / Day) – Declining • Continuing Care Communities: – Growth • Special Needs: Dementia
  12. 12. Barriers to Affordable Housing • Private Sector Impediments • Household Income: - 48.42% of Wisconsin Households are Very Low Income to Moderate Income - Median Household Income for Renters in Wisconsin = $29,425 • Lack of Equity for Down Payment & Financing Costs: Estimated 45% of Renters Lack Required Equity to Purchase Home. • Tougher Lending Criteria: Credit Scores, Employment History, Equity, etc. • Rising Cost of Housing • Lack of Affordable Housing that is Decent Safe & Sanitary • Public Sector Impediments • Attitudes of the General Public – NIMBY • Development Regulations – Zoning, Density, Infrastructure, Design Guidelines • Development Costs – Infrastructure • Local Fees -Taxes, Permit Fees, Impact Fees • Lack of Public Funding
  13. 13. Barriers to Affordable Housing • Who Is Impacted the Most? • Low Income • Single Women With Children • Minorities • Elderly • But, Who Else is Impacted? • Teachers • Police Officers • Restaurant Staff • Retail Employees • Service Workers • Factory Workers
  14. 14. Community Best Practices • Ways to Encourage Affordable Housing • Create Awareness – Make it a High Priority • Update Local Development Regulations • Utilize Good Land Use Practices • Proactive Use of Public Funding • Develop Public/Private Partnerships
  15. 15. Community Best Practices • Create Awareness – Make it a High Priority • Get the Facts and Educate the Public • Involve Key Stakeholders • Create & Adopt a Plan to Create Affordable Housing for all Residents • Encourage Fair Housing Opportunities • Take a Leadership Role in Implementation
  16. 16. Community Best Practices • Update Local Development Regulations • Update Zoning Ordinance – Density, Mixed-Use, PUDs or Special Zoning Districts, etc. • Update Development Regulations – Infrastructure, Permit & Impact Fees, Parking, etc.
  17. 17. Community Best Practices • Alternate Infrastructure Design Standards Standard Reduced Width
  18. 18. Community Best Practices • Utilize Good Land Use Practices • Smart Growth & New Urbanism – Development of Mixed-Use, Dense Town Centers • Infill Development – Restoration of Existing Structures & Use of Vacant Land Within Urbanized Areas • Urban Redevelopment – Acquisition/Demolition of Blighted Structures & Develop New Residential
  19. 19. Community Best Practices • Proactive Use of Public Funding Programs • Local Funded Programs – TIF, RLFs, Trust Funds, etc. • Intergovernmental Programs – Grants, Tax Credits, Low Interest Loans, Subsidies, etc. • Funding Agencies - Wis. Dept. Of Admin. – Division of Housing - WHEDA - USDA Rural Development - Wis. Dept. Of Health Services
  20. 20. Community Best Practices • Develop Public/Private Partnerships • Local Development Corporations & Housing Authorities – Collaborative Effort • Regional Development Corporations & Housing Authorities – Utilize Outside Resources • Partner With Developers & Landlords – Facilitate and Incentivize
  21. 21. Community Best Practices • Benefits From Best Practices • Reduces Land & Infrastructure Costs • Eliminates Blight & Revitalizes Distressed Neighborhoods • Reduces Sprawl & Preserves Land • Increases Tax Base • Provides Affordable Decent, Safe & Sanitary Housing
  22. 22. Example Project #1 - Community-Wide Strategy • Strategic Housing Program to Meet Community Needs & Goals • Economic Development Plan Identified Needs • High Percent of Elderly Over 65 Living in Their Own Home • High Percentage of Workers are Age 55 or Older • Local Employment is Projected to Increase 8% by 2020 • Business Survey - Lack of Workforce and Available Housing are Top Issues • #1 Community Priority - Revitalize Central Business District • Strategic Opportunities • Create New Senior Apartments & Assisted Living Units • Transition Single Family Owner Occupied Units from Senior to Families • Creates Affordable Housing for Workforce to Fill Employment Opportunities (Average Sale Price for existing Homes = $120,000) • Increases Population in Existing Housing Stock (Change 50 Units from 1.35 to 3.0 Persons per Household = 82 More Persons • Helps to Address Business Workforce & Housing Issues • Helps to Revitalize Central Business District (Construct Senior Housing Facilities Adjacent to Downtown)
  23. 23. Example Project #2 - WHEDA Section 42 Multi-Family & Urban Redevelopment • Central Business District Redevelopment Project • Adjacent to Historic Downtown • Blighted Properties • Redevelopment District & Tax Increment District (TIF) • Construction of New 48 Unit Senior Apartments • Total Project Cost = $6 million, or $125,000 per Unit • Financing: WHEDA Section 42 Tax Credits, $940,000 CDBG & TIF Grants, and Private Financing • Apartment Composition: 8 Units - Market Rate 8 Units – 30% - 40% of County Median Income 32 Units – 60% of County Median Income • Lease Rate, Including utilities are Based on Household Size, Income and Number of Bedrooms 1 Person @ 30% of CMI in One Bedroom Unit = $379 / Month 1 Person @ 60% of CMI in Two Bedroom Unit = $759 / Month 2 Persons @ 60% of CMI in Two Bedroom Unit = $910 / Month
  24. 24. Example Project #3 - Urban Redevelopment - Community Development Authority • Urban Redevelopment in Residential Neighborhood • Project Designed to Eliminate Blight, Enhance Neighborhood & Provide Needed Affordable Housing. • Community Lead Project – Owned & Developed by CDA With TIF Assistance From City • Mixed-Use: 7 Single Family, Two 4 – Unit Apartments, Daycare Facility & Neighborhood Park • 100% of Acquisition, Demolition, Infrastructure & Platting Costs Funded With TIF • CDA Serving as Developer • Revenue from Land Sales will Fund CDA Revolving Loan Fund
  25. 25. Example Project #4 - High Density Residential Development • New Development For Affordable Workforce Housing • New Housing for the Workforce • Public/Private Partnership (City & Private Developer) • City Created Special Zoning District (Smaller Lots & Lower Cost Houses) • Special Covenants to Address Quality of Life Within Higher Density Subd. • Private Developer Funded • Reduced Housing Cost by 25%
  26. 26. Example Project #5 - Senior Apartment Building - Local Housing Authority • New Senior Apartment Complex • Small Rural Community – Small Market • Private Developers Not Interested • Village Created Housing Authority • Obtained Financing from Rural Development • Constructed New 8 Unit Elderly Apartment Building • Contracted With the County Housing Authority to Manage Facility
  27. 27. Example Project #6 - Market Rate Multi-Family With TIF Assistance • Greenfield Development In Tax Increment District • Project Designed to Address Severe Housing Shortage • Greenfield Site & Tax Increment District • Total Project Cost = $6.3 million • Financing: Private Financing & TIF To Bridge Financing Gap • Apartment Composition: 40 Studio Apartments 40 One Bedroom Apartments 40 Two Bedroom Apartments • Lease Rate, Including utilities Studio Apartment = $ 495 / Month One Bedroom Apartment = $ 725 / Month Two bedroom Apartment = $825 / Month
  28. 28. Example Project #7 – Assisted Living • New Assisted Living Facility in Tax Increment District • Redevelopment Project • 40 Unit Assisted Living • Located in Tax Increment District • Financing: Private Financing & TIF to Bridge Financing Gap.
  29. 29. Example Project #8 – Urban Redevelopment Idle Industrial Site • Mix Use Redevelopment • 20 Acres Site • Adjacent to Downtown & River • Proposed Uses • 27 Bed Assisted Living (Incl. Memory Care) • 24 Unit Affordable Housing (30%, 50%, & 60% of CMI) • 64 Unit Market Rate Apartments • Office Renovation – Office Space • $19.9 Million Project Cost • Funding: WEDC Idle Ind. Grant, TIF, Home : Private Investment
  30. 30. Questions & Answers Kurt R. Muchow Vierbicher Associates, Inc. 400 Viking Drive Reedsburg, WI (608) 768-4817 Email: kmuc@vierbicher.com

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