Transcript Affordable Housing Needs Assessment

City of Ann Arbor 2012
Jennifer Hall
Executive Director
Ann Arbor Housing Commission
[email protected]
734 794-6720 ext 47201
What is Affordable Housing?
 Rental or owner
 30% or less of gross income
 NOT 30% of gross income
 especially for renters and households under 50% AMI
 Includes utilities, taxes, insurance
 Otherwise considered cost burdened
HUD 2011 Income Limits –
Ann Arbor Area PMSA includes Washtenaw County
Household
Size
1
2
3
4
5
6
Median Income
$60,500
$69,100
$77,700
$86,300
$93,300
$100,200
Low (80%/74%)
$44,950
$51,400
$57,800
$64,200
$69,350
$74,500
Very Low (60%)
$36,300
$41,500
$46,700
$51,800
$56,000
$60,100
Very low (50%)
$30,250
$34,550
$38,850
$43,150
$46,650
$50,100
Extremely low
(30%)
$18,150
$20,750
$23,350
$25,900
$28,000
$30,500
Based on the Median Income of a household of 4, the 80% Area Median Income (AMI) cannot
exceed the National Median Income, therefore the 80% AMI is actually 74% AMI.
Maximum Monthly Housing Costs
By Household Size (30% of income)
1
2
3
4
5
6
Median income
$1,513
$1,728
$1,943
$2,158
$2,333
$2,505
Low income (80% / 74%)
$1,124
$1,285
$1,445
$1,605
$1,734
$1,863
Low income (60%)
$908
$1,038
$1,168
$1,295
$1,400
$1,503
Very low income (50%)
$756
$864
$971
$1,079
$1,166
$1,253
Extremely low income (30%)
$454
$519
$584
$648
$700
$751
*Note: Includes utilities (except telephone) for rental. Includes taxes, utilities, condo fees, and insurance for homeownership
2011 Housing Affordability
 Ann Arbor ranked 87th most expensive housing
markets of 209 metro areas - $162,000 median home
price
 132nd in 2009 ($136,000)
 Ann Arbor ranked 87th of 209 metro areas -
$882/month Fair Market Rent for a 2 bedroom
apartment
 51st in 2009 ($940)
http://www.nhc.org/chp/p2p_2011_q3/index.php
Housing plus Transportation
“Commuting is a common strategy for working
families to cope with high housing costs. When
the cost of transportation is considered together
with the cost of housing, the percentage of
working families paying more than half their
total expenditures increases five-fold from 8.3
percent to 44.3 percent of working
families.”
Something’s Gotta Give – Center for Housing Policy
http://www.nhc.org/media/documents/somethings_gotta_give.p
df?
Ideal World
 Every household lives in a unit they can afford
 If 200 households need to pay no more than
$300/month in rent, then there are 200 rental units of
the appropriate size for them
Rental Housing Mismatch
Gross Rent (including utilities) paid by household income
less than $10K
$10K-$19,999
$20K-$34,999
$35K-$49,999
$50K-$74,999
$75K-$99,999
$100K +
no rent
188
203
255
158
152
53
50
less than $100
169
91
49
18
18
6
8
$100-$199
900
194
153
42
33
17
15
$200-$299
437
483
198
7
37
5
20
$300-$399
475
748
570
246
111
42
46
$400-$499
897
1071
1370
759
380
125
65
$500-$599
1245
1478
2338
1204
704
273
132
$600-$699
1321
1512
2434
1659
1028
292
131
$700-$799
837
986
1849
1534
1415
353
257
$800-$899
607
794
1297
1122
1098
398
235
$900-$999
354
359
528
760
667
345
242
$1K-$1249
445
387
713
684
1179
528
443
$1250-$1499
118
119
175
222
259
221
249
$1500-$1999
29
121
189
186
149
150
250
$2K +
18
58
60
97
57
67
122
Is it affordable?
Source: Census 2000, Washtenaw County
Green = Yes
Yellow = Maybe
Red = No
Every facet of our local homelessness system of care is seeing
increased demand:
Homeless
2004
2010
Experienced Homelessness
2756
4738 (72% increase)
Households with children
26%
23%
53%
56% families
43% individuals
66% unaccompanied youth
44%
21% of families
35% individuals
42%
26% families
33% individuals
66%
77% of families
62% individuals
Experienced homelessness
first time
Struggling with addiction
Mental Illness
Unemployed
Source: Washtenaw Housing Alliance Blueprint Progress Report 2004 to 2011
Waitlist Tenant Income
 Section 8 Waitlist
 86% are Extremely Low Income (30% AMI or less)
 11% are Very Low Income (31% - 50% AMI)
 3% Low Income (51% AMI – 80% AMI)
 Public Housing
 92% are Extremely Low Income (30% AMI or less)
 7% are Very Low Income (31% - 50% AMI)
 1% Low Income (51% AMI – 80% AMI)
Waitlist Tenant Household Size
 Section 8 Waitlist Snapshot (6% disabled)
 19% Single
 28% Two-person
 27% Three-person
 27% Four or more people
 Public Housing Waitlist (23% disabled)
 26% Single
 30% Two-person
 20% Three-person
 25% Four or more people
Poverty Level
Ann Arbor sub-areas
Percent of Households on Public Assistance
Section 8 Voucher Use
Transit Routes
Federal Funding
Historical decline in federal support for affordable
housing
 1976 HUD’s budget was $86.8 billion
 2010 HUD’s budget was $43.58 billion
Capital Needs Public Housing
 HUD’s study nationally
 Nation’s 1.2 million public housing units need an
estimated $25.6 billion for large scale repairs to improve
basic living conditions for residents
 $21,333/unit
 AAHC study locally
 $14,534,791 in deferred Capital Needs for 360 units
 $40,374/unit
 2012 HUD capital grant = $440,778 or $1,224/unit
Market Rate vs. Public Housing
Annual
Market indiv.
meter
Market master
meter
PHC -
Turnover
46% - 53%
43% - 52%
14% - 20%
Revenue/unit
$10,008
$13,139
$5,167
Expense/unit
$4,352
$6,434
$5,304
Capital Expend
$601
$669
$129
2010
Conclusion: PH collects $431/mo in rent compared to $1,000/month market
Net loss = Inability to invest in units, and therefore need to access additional
funding just to maintain units
Source: 2011 National Apt Assoc. Survey of 3,992 properties, 1,052,006 units
Affordable Housing Continuum
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Shelters (Washtenaw, IHN, Safe House, SOS)
Transitional Housing (MAP, Home of New Vision, Dawn Farm)
Group Homes (Synod, WCHO)
Senior Assisted Living (AAA1B, private)
Nonprofit supportive housing (Avalon, MAP, CHA)
Vouchers with Support Services (VASH, SPC, SHP)
Public Housing (AAHC, YHC)
Senior Housing (Lurie Terrace, Cranbrook)
Tenant Vouchers (AAHC, YHC, PHC, MSHDA)
Private developer LIHTC (Windsong)
Cooperatives (Arrowwood, Pine Lake, Forest Hills, Univ Townhomes)
Habitat/other nonprofit owner housing
Developer zoning units (1st/Washington, Stone School)
Market Rate economically affordable
Rental Vouchers –
Private Sector
 Over 1400 tenant based vouchers
 1,180 Housing Choice Vouchers
 140 VASH (Veterans)
 100 Mainstream (Disability)
 20 Enhanced (higher payment standard)
 37 Project Based Vouchers
 20 Avalon Pear Street (6 homeless)
 5 VASH (Avalon property TBD)
 12 AAA1B (Assisted Living)
 1 homeowner voucher
Public Housing
 193 Primarily single bedroom units at 5 sites
 166 Family 1-5 bedroom units at 12 sites
 One 3bdr family unit – lease to own
360 units total at 18 sites
 1998 last development 2- duplexes
Challenges
 Aging properties, not enough rent revenue or HUD
funding to cover expenses
 Staff salaries are the lowest in city, difficult to retain good
staff
 A number of tenants with history of mental illness,
substance abuse and homelessness. Requires intensive
services as well as staff time. Vulnerable populations taken
advantage of – letting in homeless people, disrupting
meetings and yelling at other tenants, fist fights, partying,
excessive damage to units (broken windows, holes in
walls), graffiti, threatening notes under door, threatening
our staff
 Lack of security. Do have good response from AAPD
2009
 Long-term Director retired
 Agency in troubled status per HUD
 Significant budget shortfalls

Staffing cuts & Salary reductions
 Board of Directors not in alignment
 City of Ann Arbor increased involvement

Hired Schumaker and Company as consultant
 OIG audit
 Fair Market Rent decreased
 Stimulus funds $708,155 capital
2010
 City of Ann Arbor increased involvement



New Board of Directors
Council liaison appointed
Schumaker report presented to Council
 Reorganization



New Director hired
Deputy Director & 3 manager positions hired
Staff reductions
 Continued HUD cuts
 Continued troubled status
Current Situation 2012
 Out of Troubled Status per HUD!!
 Staff Reorganization continues, Since 2009…
 5 Executive Directors (2 Interim)
 3 Managers Voucher Program (1 Interim)
 6 Managers Public Housing Program (2 Interim)
 1 Financial Manager
 9 0ther staff turnovers out of 20 positions
 Continued HUD cuts – Cannot rely on HUD for funding
 HUD admin fee is 80% of what is owed to AAHC by formula
 Some PHA’s are turning down voucher program – unprecedented
 Financially – operating in the black because cut staff, but
continued property deterioration due to lack of resources
Staffing Implemented
 Staff pay at 90% of market mid-point
 Hired Dep Director and Managers
 Ongoing staff training
 Will hire Maintenance Supervisor and Financial Analyst.
City committed 2 years of general funds to support

Also need additional maintenance, intake/social worker, and
administrative support position
 Did not outsource maintenance
 Did not separate Voucher Program

Did levalize work load
Operations Implemented
 Increase Utilization
 Reducing unit turn around days
 Increase voucher utilization
 Consultant hired to update policies and procedures
 Minimum HUD requirements
 Maximize efficiencies
 Maximize technology
 Mobile maintenance
 On-line waitlist
 On-line payments by tenants
 Electronic transfers for payables
External Relations Implemented
 Continuing work with Resident Advisory Board
 Board of Directors
 New Board 2011
 Developed orientation and governance policy
 City of Ann Arbor
 Additional funding allocated for 2 positions
 Council liaison
 Interdepartmental Support: HR, IT, Planning, Building, Payroll,
Attorney, Retirement, AAPD, Fire Marshall, AFSCME, Teamsters
 Footing Drain Disconnect program – several properties
 Partnering
 Services: IHN/FSN, Ozone, CAN, Peace, CSTS, AAA1B, Wayne CAA
 Housing Policy: WHA, Community and Econ. Development,
Sustainability Initiative
Finances Recommendations
 Additional Grants/Funding since 2010
 $75,000 A2 Housing Development Corporation – security
 $100,000 CDBG - water drainage at 2 sites
 $352,111 competitive Vouchers from HUD
 $34,500/year Family Self Sufficiency - support services for voucher
holders
 Approx. $300,000 Community Challenge Planning Grant –
Development
 $4,000 mini grants OCED - training
 Funding for partners for services at AAHC
 $300,000 to CAN for Resident Opportunities for Self-Sufficiency
 $200,000 to CSS for services for up to 40 homeless households
 Approx. $50,000 To CAN for fitness equipment and playground
 Vouchers for Veterans – 140 new vouchers since 2008, over
$800,000
Properties
 MUST diversify portfolio
 To address deferred capital expenditures
 To financially stabilize the organization
 Property assessment - continue where Marge started
 Demolish, Sell, Maintain, Convert to project based section 8?
 Evaluate Capital Needs, Financially solvency, Marketability
 Select Equity Partner
 Low-Income Housing Tax Credits
 Select Development Partner
 Develop properties
 Land Bank vacant properties
 Redevelop existing properties
City of Ann Arbor
 Currently owns all Housing Commission properties
 Housing Commission owns improvements
 Required by City Ordinance to purchase real property
on behalf of Housing Commission
 Can transfer property to Housing Commission at any
time
 All Housing Commission staff are City employees
 CONSEQUENTLY: The Housing Commission cannot
diversify its funding on properties without support of
City
Comparison of Public Housing
and Project Based Vouchers
Unit Size
Fair Market Rent
Washtenaw County
1 Bedroom
$718
2 Bedroom
$874
3 Bedroom
$1,099
4 Bedroom
$1,132
2011 Public Housing rent/operating subsidy is approx. $527/unit/month ($231 HUD subsidy,
$183 tenant, $113 capital expenditures)
2011 Voucher Tenants average $807/unit/month ($567 HUD subsidy to private landlord, $240
tenant to private landlord). And the AAHC receives approx $56/unit/month in admin fees
Rental Assistance Demonstration
 New competitive HUD program
 60,000 unit target conversion of Public Housing to Project






based vouchers coupled with private investment in capital
improvements
Use own vouchers, not subject to 20% cap on project
basing own vouchers
Up to 50% of units in one building can be project-based
Lower regulatory requirements than public housing
Hold harmless rent for tenants first year
Applications in August 2012
Contract rent limited to current rents
Development Sources
 Low Income Housing Tax Credits
 HOME/CDBG
 Federal Home Loan Bank
 FHA insured Mortgages (223f or 221d4)
 Conventional Construction Loan
 Competitive Grants like Community Challenge
Planning Grant
 Private Foundations
 Bond financing
Development Concept
 Mission and Goals
 Target Market
 Identify Site
 Cost Estimates
 Sources of Funding
 Community Support
Feasibility & Due Diligence
 Neighborhood Market Analysis
 Neighborhood/Resident input
 Site Control – purchase option
 Zoning, Environmental Review
 Appraisal, Preliminary design
 Title work, Survey, Legal
 Identify and hire project team
 Architect, Engineer, Syndicator, Consultants
 Project work plan
 Apply for funding
Deal Making & Commitments
 Finalize design
 Marketing plan
 Site Plan approval
 Construction specs and bids
 Close on financing & subsidies
 Manage development team
New Rental Model
 Lower Operating Expenses
 High Efficiency
 Minimize Maintenance
 Durability
 Higher Rent
 Project-Based Vouchers

up to 20% of AAHC’s tenant vouchers can be converted (280)
 $300 - $400/mo additional rent over public housing
 Tenants still pay affordable rents (30% of income)
Market Demand - Rental
 Know market and must have demand –
 June 2011 market study from CB Richard Ellis showed
Michigan occupancy at 93% and Ann Arbor at 98.5%
 Rents high enough to cover costs, but lower than market
rents
 Demand for high quality, energy efficient, lowmaintenance design
Proposed Rental Project
 22-37 unit detached single family and duplexes
 1-5 Bedrooms
 Green construction
 Potential partnership with local nonprofit developer
Owner Market Demand
 Location critical
 Higher income, stable neighborhood
 Transportation, jobs, services
 Need buyers that are low-income but have stable
sources of income
 Energy Efficient
Ann Arbor Sales Market
Ann Arbor Area Board of Realtors – MLS listed sales
http://www.aaabor.com/news/area_housing_statistics
Proposed Owner Project
 15 unit detached site condos and duplexes
 2-4 Bedrooms
 Green construction demonstration project
 Partnership with Parks Department
 Potential partnership with Habitat
Proposed Owner Project
 Estimated Development Costs
 Acquisition
 Construction
 Site Improvements
 Developer Fee – staff
 Professional fees
 Education Workshops
 Soft costs
 TOTAL
$160,000
$2,100,000
$400,000
$450,000
$300,000
$30,000
$300,000
$3,740,000 = $249,000/unit
Potential Financing
 Federal Home Loan Bank Grant
 City AAHTF
 Brownfield TIF
 Green/Private Grants
 Community Challenge Grant
 Education Grants/Fees
 CDBG/HOME
 Construction Loan
 TOTAL
Proceeds from sale of houses
$225,000
$50,000
$560,000
$300,000
$340,000
$10,000
$400,000
$1,855,000
$3,740,000
$2,100,000 = $140,000/unit
Owner Down Payment Assistance
 MSHDA DPA with MSHDA loan
 Federal Home Loan Bank
 Housing Choice Vouchers
Bottom Line – PER UNIT
Total Development Costs
Minus Grant Subsidy
Loan to Repay
$249,000
-$125,333
=$123,667
Projected Sales Price
Proceeds/Safety Margin
$140,000
$16,333
Conclusions
 Continued need for affordable housing
 Fair and equitable housing
 Need advocacy at federal levels
 Supported by facts
 Need support at local levels (opposite of NIMBY AA)
 Realistic
 Inclusive