Gap Financing Tools for Affordable Housing

A presentation to the

Virginia Housing Coalition

Housing Credit Conference

September 5, 2013

VHCSept 2013

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• Owns 1,117 rental homes at 13 properties valued at $200M

• Award-winning, innovative• Founded in 1989• Led by Arlingtonians: Staff & Board• Most properties funded by:

• LIHTC• VHDA Financing• Arlington County Gap Financing• Low Cost Land Acquisition

APAH: A Non-Profit Affordable Housing Developer

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• AHIF: Affordable Housing Investment Fund• Affordable Housing Ordinance produces

on-site units and AHIF contributions• Density— Rezoning, Bonus,• Transfer of Development Rights• Public Land for Housing, land banking,

faith community land• Bonds: Industrial Development Authority• Housing Grants: rental subsidy• Permanent Supportive Housing: rental

subsidy and services

Major Arlington County Affordable Housing Tools

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Focus: Affordable Housing Investment Fund (AHIF)

• Revolving fund est. 1985• Target 60 years affordability• Target leverage 4:1 with other funds• 5 – 10% supportive housing• Repaid from cashflow, typ. 50%• Preference for below market fees,

acquisition costs• Funded with Federal HOME funds, local

general revenues, 1% of County recordation tax, loan repayments and developer contributions under Affordable Housing Ordinance

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Advocacy and Information: Important Development Tools

• APAH and partners (eg the faith community), publicize challenges facing low income households, like loss of affordable units

• County elected officials make affordable housing a top goal.

• Leadership facilitates funding, policies and approvals

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County lost 14,000 market affordable units between 2000 - 2011

County lost 14,000 market affordable units between 2000 - 2011

• HOME Investment Partnership Program• Pass Thru To States/Localities• $2B/year• 25% Local Match• Build or renovate, 20 yr term• Part of Consolidated Plan

• Section 8 Rental Subsidy• Community Development Block

Grants (CDBG)—housing & services for low income

Federal Affordable Housing Tools

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Focus: Density• Rezoning: Strategic rezoning to

allow more affordable units• Bonus density allowing larger

buildings in exchange for on-site affordable units and/or contribution to AHIF

• Density Transfer allows density to be transferred to an affordable site or sold to help finance preservation of existing units

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Focus: Public Land for Housing

• Pioneered with long term ground lease at Arlington Mill Community Center

• Leverages height and density with other County uses

• Significantly reduces development costs for acquiring new land

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Fairfax County 2014 Funding• $5 million in Housing Blueprint funds • Focus:

Extremely low incomes, particularly homeless or disabled (20% of units serve at or below 30%AMI);Low income working families (60% of units serve at or below 50% AMI); andModerate income workforce (20% of the units serve between 51%AMI and 100%AMI)

• Leverage other sources such as private equity and financing and Low-Income Housing Tax Credits (LIHTC)

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Alexandria Housing Opportunities Fund

• Development and preservation of affordable rental and sales housing.

• Priority to City-certified Community Housing Development Organizations (CHDOs).

• Leverage funding from all available sources--fill gaps.• Low interest loans or grants serving below 60% of the area’s

median income. • May cover feasibility analysis; pre-development activities;

housing preservation; and development costs.

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Prince William County Funding• $500,000 in CDBG Funds awarded competitively to

non-profit organizations• Maximum award $225,000• Public service grants at 100%/50%/25% annually• Repayable loan at zero interest or deferred

appreciation

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• Leverage• Private or bond mortgage financing• HUD Loan Programs• Land Banking• Non-profit-owned garden apts.• Faith community

• Philanthropy• Private contributions & grants • Volunteer support

• Historic Tax Credits• Federal (20%) and state (25%) of

eligible rehabilitation costs

Other Affordable Housing Tools

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Focus: Land Banking• Redevelop existing, older, low

density garden apartment communities or faith properties in transit-oriented locations

• Lower development costs because of existing non-profit ownership

• Rezoning provides more affordable units and can create new Smart Growth, energy-saving and Transit Oriented features

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Our VisionA diverse and inclusive, transit-oriented, sustainable community

that welcomes and values all residents. Our Role

Marry best practices in affordable housing finance and development with a deep commitment to the local community

to advocate, preserve, and build affordable housing .

Nina Janopaul, APAH President/CEO703-276-7444 (w)

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