snapshot: affordable housing market fisher center for real estate conference
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Snapshot: Affordable Housing Market Fisher Center for Real Estate Conference. April 30, 2012. Cynthia Parker, President & CEO BRIDGE Housing Corporation. Snapshot: Affordable Housing Market. About BRIDGE Housing Corporation Demand for Affordable Housing Traditional Financing Tools - PowerPoint PPT PresentationTRANSCRIPT
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Snapshot: Affordable Housing MarketFisher Center for Real Estate Conference
April 30, 2012
Cynthia Parker, President & CEOBRIDGE Housing Corporation
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Snapshot: Affordable Housing Market
About BRIDGE Housing Corporation Demand for Affordable Housing Traditional Financing Tools Low Income Housing Tax Credit Program Redevelopment Agencies BRIDGE Project Examples
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Mission• Quantity, Quality,
Affordability History
• Business Leadership• 27 Years of Success• Internationally
Recognized Leader and Innovator
BRIDGE Housing Corporation Background
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Approximately 15,000 Homes and Apartments Developed
85 California Communities 37,000 Residents Development in Northern and
Southern California
BRIDGE Housing Corporation Track Record
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BRIDGE Housing Corporation Types of Developments
Series10%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rental
For Sale
New Construc-
tion
Acquisition
Inner City
Suburban/Small City
Family
Senior
Sole Developer
Or with Nonprofit Partner
Private Partner
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BRIDGE in 2012
More than 2,000 units breaking ground, with a combined total value of more than $450 million
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MIXED INCOME – Irvington Village, Fremont
Mixed Income Family Rental and Homeownership100 affordable units
Project Value: $31,800,000283 market-rate units
Project Value: $148,000,000
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SUSTAINABILITY – Mission Walk, San FranciscoFamily Homeownership131 unitsProject Value: $63,500,000
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SENIOR RENTAL – Foothill Farms, Sacramento
Senior RentalTotal Units: 138Project Value: $26,000,000
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Income Limits
U.S. Median Family Income = $52,400* California Median Family Income = $71,400* Bay Area Median Family Income = $103,000*
Extremely Low-Income = 30% of AMI** Very Low-Income = 50% of AMI Low-Income = 80% of AMI
*based on household of four**Area Median Income = AMI
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TRANSIT-ORIENTED REDEVELOPMENTNorth Beach Place, San Francisco
Mixed-use Family Rental341 unitsProject Value: $108,400,000Up to 60% AMI
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AFFORDABLE HOMEOWNERSHIPArmstrong Townhomes
Family Homeownership124 unitsProject Value: $60,000,000
Condominiums were priced $175,000 to $345,000 and affordable to households earning 60 to 100% of AMI
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Affordable Housing Demand: U.S.
Renter households represent 33% of all households in the U.S., of which nearly 70% are low-income
The Fair Market Rent (FMR) for a two-bedroom apartment in the U.S. is $949
A renter household needs an annual income of $37,960 in order to afford a two-bedroom apartment at FMR
A renter earning the federal minimum wage ($7.25 per hour) must work 101 hours per week to afford a two-bedroom apartment at FMR
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Affordable Housing Demand: California
The Fair Market Rent (FMR) for a two-bedroom apartment in California is $1,353
A renter household needs an annual income of $54,127 in order to afford a two-bedroom apartment at FMR
A renter earning California minimum wage ($8.00 per hour) must work 130 hours per week to afford a two-bedroom apartment at FMR
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Bay Area FMRs
In 2012, FMR for a 2-bedroom in San Francisco was $1,905, affordable to families earning at least $76,200 per year; this is a four percent increase from 2011.
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Continued Demand
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Traditional Financing Tools
For Non-Profit Affordable Housing Restriction Competition Lead Time
501(c)3 Financing Low No 6 months+
4% Low Income Housing Tax Credit (LIHTC) Equity + Bond Cap Financing
Some Some < 1 year
9% LIHTC Equity High High 2+ years
Federal e.g. HOME (cut by 1/3), McKinney (gone), 202 and 811 (on hold)
High High 2+ yearssevere reductions
Prop 1C High High N/A
MHP/RDA ---- GONE ----
Traditional financing tools are inadequate to meet increasing need in our region.
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Federal Low Income Housing Tax Credit Program
Tax Reform Act of 1986 (IRS Section 42) Housing Finance Agencies (HFAs) in each state award
credits to developers, who sell them to investors in exchange for funding for the construction and rehabilitation of affordable housing (60% AMI and below)
Investors receive 10 year credit 4% and 9% programs Nearly 2 million affordable rentals have been created
with equity provided by the Low Income Housing Tax Credit Program
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California Low Income Housing Tax Credit Program California Tax Credit Allocation Committee
• Over $3 billion in Annual Federal and State Credits awarded to date
• Over 265,000 units produced since 1987
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Impact of Economic Downturn
Banking Crisis
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Banking Crisis: Federal Aid for LIHTC Program
2008 Congress Program Changes• Provided additional Housing Credit authority• Exempted Housing Credits from the Alternative Minimum Tax (AMT)• Fixed the 70 percent present value Credit at 9 percent• Gave states flexibility to provide state-designated developments a
30 percent Housing Credit “basis boost” 2009 American Recovery and Reinvestment Act of 2009 –
Response to Economic Downturn• $2.25 billion in formula grants to states through the Tax Credit
Assistance Program (TCAP)• Allowed states to exchange some of their 2009 Credits for cash to
make up for equity gaps in Credit developments
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Banking Crisis: Federal Aid for LIHTC Program
California Tax Credit Allocation Committee: 2011 Totals• Federal (9%) Credit Awards
• Annual Federal Credits Awarded: $83,682,515• Total State Credits Awarded: $86,979,826• Projects Awarded: 105• Total Number of Units: 6,150• Total Number of Low Income Units: 6,026
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LIHTC Program
California Tax Credit Allocation Committee: 2011 Totals (cont’d)• Federal (4%) Plus State Credit Awards
• Annual Federal Credits Awarded: $7,419,382• Total State Credits Awarded: $23,833,168• Projects Awarded: 16• Total Number of Units: 1,175• Total Number of Low Income Units: 1,134
• Federal (4%) With Tax-Exempt Bond Financing Awards • Annual Federal Credits Awarded: $75,627,461 • Projects Awarded: 109• Total Number of Units: 10,073• Total Number of Low Income Units: 9,340
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DEMAND SNAPSHOTThe Coronet, San Francisco
Senior Rental150 unitsProject Value: $55,000,000 15-40% AMIWait/Interest list of over 7,000
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LIHTC Program: Equity Pricing Trend / Investor Yield Change
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RDA Funding
Properties # of UnitsAmount of RDA
Funds Committed
TDC
Northern California16th Street Station474 Natoma Family ApartmentsSan Leandro CrossingsFoothill Farms Senior ApartmentsMacArthur Transit Village Affordable HousingSt. Joseph’s SeniorSt. Joseph’s FamilyRene Cazenave ApartmentsWest Sacramento
825 $89,886,656 $279,831,364
Southern California9th & BroadwayComm22 – FamilyCollege ParkSummerhouse Phase 2
575 $46,750,000 $174,856,211
TOTAL 1,400 $136,636,656 $454,687,575
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MacArthur Transit Village, OaklandMixed-use, Mixed-income Family RentalAffordable Units / Total Units: 108 / 624
Project Value: $329,800,000
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COMM22, San DiegoMixed-use Family RentalTotal Units: 200Project Value: $77,928,000
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9th & Broadway, San DiegoMixed-Use RentalTotal Units: 250Project Value: $73,500,000