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Nj future redevelopment forum 2019 staton


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Michael Staton presentation for missing-middle housing session at Redevelopment Forum 2019.

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Nj future redevelopment forum 2019 staton

  1. 1. UNCOMMON EXPERTISE. UNMATCHED IMPACT. Creative Small Building Financing Initiatives for New Jersey March 8, 2019
  2. 2. CPC HAS UNMATCHED EXPERIENCE IN SMALL BUILDING FINANCE Since our founding in 1974, CPC has built strong and productive relationships with key housing finance agencies and entities across the Northeast, and helped to implement preservation programs and tools which simplify the financing process for small multifamily building owners Drawing on our experience, we have compiled a high-level overview of low-cost initiatives other jurisdictions have successfully implemented to support small buildings owners with their financing and development needs 2
  3. 3. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS CPC has helped other jurisdictions execute on initiatives which simplify and ease the ownership and financing process for small buildings, including: 1. New York State partners with private lenders, such as CPC, who specialize in small buildings to seek out financing opportunities for its Housing Funds and Pension Funds • The State targets its existing public resources to support small buildings, through proactively providing direct financing and mortgage insurance through a private, on-the-ground lender. • CPC is already on the ground in NJ, building relationships and providing expertise to small building owners, and could partner with the Neighborhood Preservation Balanced Housing program to facilitate targeted financing 2. CPC works with New York State and other jurisdictions to identify opportunities for regulatory relief and technical assistance for small building owners • Based on our deep experience in the space, CPC has written and published a “Small Buildings Guide” to help small building owners through the financing and development process • Other solutions include regulatory waivers, landlord training, or designating an office for small building owners” to reach out for technical assistance for financing or regulatory concerns 3
  4. 4. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS 3. Many cities, such as Erie, PA, are proactively marketing and promoting the upside potential of investments located in “Opportunity Zones” • New Jersey could serve as a “one-stop shop” to 1) connect property owners in need of financing with investors looking for deals, and 2) provide technical assistance for small building owners seeking investors • Some states are also directing resources to opportunity zones to support the program to further attract investment where needed (may require legislation or executive order) 4. Many States have facilitated and supported low-cost financing programs for energy efficiency capital improvements, which require no upfront investment from the owner • A nationwide financing market exists for Energy Performance Contracting (EPC), where debt service is made only to the extent of utilities savings • Several states have implemented Property Assessed Clean Energy (PACE) Financing programs for multifamily buildings – requires passing already proposed legislation in NJ State legislature • These programs impose no budgetary impact on the State as they are funded by private lenders • CPC has published a guide on underwriting energy efficiency investments, which could help guide financing activity 4
  5. 5. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS 5. New York, along with 34 other States, has implemented Historic Preservation tax credits and Brownfield tax credits to help revitalize older properties and distressed downtowns • Tax credits can offset from the upfront redevelopment costs for historic sites or remediation of environmentally hazardous properties; owners can use credits to finance upfront capital costs • CPC has had great success in working with borrowers to generate financing using these credits across New York State • This type of credit would require passing legislation already proposed in NJ State Legislature, entitled “The Historic Property Reinvestment Act” 6. Jurisdictions frequently use Tax Increment Finance districts to earmark funding for development and rehab • Localities could earmark future property tax increases specifically for loans and grants for small building owners • New Jersey could gear funding towards particularly blighted real estate in the district in need of severe development or rehabilitation 5