Transcript Building Sustainable Housing Around TOD
A Transit-Oriented Housing Strategy
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Housing Mosaic
Materials Capital Wage Market Income Demand Labor Public Policy Job Growth Land
Regional Approach
Goal: Increase Workforce Housing near Transit
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu Source: The Center for Transit-Oriented Development
Breaking the Cycle of Unintended Consequences in Transit-Rich Neighborhoods
Market Trends
Construction Costs Comparison
Source: Rider Levitt Bucknall
Workforce Housing
Source: Center for Housing Policy, 2009 Housing, Rents, and Income Data
35,00 30,00 25,00 20,00 15,00 10,00 5,00 0,00
Average Hourly Earnings, Selected Industries
2005 2006 2007 2008 2009 Source: Hawaii State Data Book, 2009
Distribution of Honolulu Household Demand vs. Supply by HUD AMI Levels 100.0% 80.0% 60.0% 40.0% 20.0% 0.0%
23.6% 7.4% 13.8% 13.1% 20.3% 58.7% 18.0% 3.7%
Single Family Demand
20.9% 10.5% 7.4% 1.9%
Single Family Supply
12.3% 11.7% 10.0% 25.6% 21.8% 8.5% 10.2%
Multi Family Demand
9.6% 8.5% 8.9% 30.3% 31.4% 8.5% 2.9%
Multi Family Supply
> 180% AMI 141 - 180% AMI 121 - 140% AMI 81 - 120% AMI 51 - 80% AMI 30 - 50% AMI < 30% AMI
Combined Housing and Transportation Costs % of Household Income
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0%
18.6% 20.4% 21.5% 21.0% 22.6% 21.3% 21.4% 15.0% 32.0% 35.0% 28.6% 26.3% 27.0% 33.0% 29.2% 32.2%
0.0% H on ol ul u Lo s An ge le s Po rtl an d Sa lt La ke C ity Ph oe ni x Sa n D ie go Se at tle Sa n Fra nci sco Source: http://htaindex.cnt.org
Transportation Housing
Definitions
• • • • • •
Affordability – Pay no more than 30% of Gross Monthly Income. Housing meets needs of households Area Median Income – At 100% of AMI, half residents earn below that amount and half above Very Low Income - <30% of AMI Low Income – 30% to 59% of AMI Moderate Income – 60% to 79% AMI Middle Income – 80% to 120% of AMI
Market Trends
•
New real estate development in Honolulu is challenged by high construction costs which result from:
–
Strong labor unions and associated high cost of labor
• Although recent declines in construction activity have reduced labor rates military construction projects continue to support Oahu’s relatively high construction wages – –
High cost of land
• • Approximately 1% of Hawaii’s land is developable; The supply of developable land is constrained by: – Mountains – Military owned lands – State of Hawaii owned lands – Privately-owned lands –
Premium cost of materials which usually must be imported
• Hawaii does not have plentiful natural resources that are generally used in traditional building materials –
Other factors
• Expectation that developers pay for infrastructure upgrades • • Length of time required for permit and entitlement review timeline Zoning considerations (i.e. green space and parking requirements)
Factors That Affect the Amount of Travel & Modal Choice Automobile Transit Cycling & Walking Out-of-Pocket Costs Time Costs Service Attributes
Fuel & Maintenance Roadway Tolls Parking Fees Driving Parking Search Walking Effort Safety Comfort Transit Fare Walking Waiting Riding Effort Safety Comfort Maintenance Riding Walking Effort Safety Comfort
Short & Long-term Effects of Transportation System Improvements
Work and non-work travel (frequency, destination, mode) Short-term decisions Transportation improvement Automobile ownership Mode to Work Medium-term decisions Employment location Residential location Infrastructure investment Long-term decisions
Potential Livability Benefit Outcomes associated w/TOD
Downtown & Neighborhood Rejuvenation Metropolitan Sustainability & VMT Reduction Social Equity for Jobs & Housing Economic Growth with Environmental Quality
TOD 3.0
1. Route Alignment 2. Station Location 3. Station Area 4. Land Assemblage 5. Infrastructure 6. Vertical Development
7. Livability Benefits
Challenge: TOD Housing Difficult, Time-Consuming, and Expensive
Land Prices
Land prices around station are likely to increase because of speculation when a new transit line is planned Affordable and workforce housing developers lack the capital to acquire land before the prices go up and hold it until ready to be developed
Financing
Funding for workforce housing is limited or too restrictive Mixed-income and mixed-use projects require complex financing structures involving multiple sources of funding
Timeline
Sites often require land assembly and rezoning, leading to lengthy acquisition and permitting process Community opposition to density and affordable housing can be challenging Development near transit requires collaboration among the public, private, and non-profit sectors , which can be difficult to coordinate given the different needs, constraints, and schedules Creating A Transit-Oriented Workforce Housing Strategy for Honolulu Source: Center for Transit-Oriented Development
Housing Challenges
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Affordable housing and rental housing, both have negative connotation – NIMBY’s. Typically, projected market rents do not support new multi-family (rental )construction; Hawaii is dominated by service-sector industries, whose average employee wage scales do not support the purchase of housing (for-sale) The majority of employer assisted housing programs focus heavily on demand-side (for-sale) programs.
PARTNERSHIP APPROACH: Collective, long-term, sustained, and strategic investments are needed in order to produce important community development outcomes. In addition to brokering a common agenda, these partnerships are building the capacity of community-based groups and other stakeholders to ensure strong local leadership. These coalitions help increase the flow of resources into neighborhoods, define and execute market-based strategies, and develop new approaches to creating and seizing neighborhood
development opportunities.
aggressive land assembly regional connections housing development/ rehab tools partnership approach targeted neighborhood planning marketing neighborhoods economic development sophisticated market analysis procedures that measure impact
Community Challenge Planning Grant
$40 million total – Honolulu receieved $2.3m max grant + 20% match)
to:
Foster reform and reduce barriers
to achieving affordable, economically vital, and sustainable communities. •
Development of master plans or comprehensive plans
that promote affordable housing co-located and/or well connected w/retail, businesses..aligned w/..transportation plans; •
Development & implementation of plans and strategies
livability and sustainability; that promote •
Revisions to zoning codes
, ordinances, building standards, or other laws to
remove barriers …..;
•
Revisions to building codes to promote …energy efficiency
….; •
Strategies for creating or preserving affordable housing
and extremely low families or individuals….; for low, very-low, •
Strategies to bring additional affordable housing
housing opportunities….; to areas that have few •
Planning, establishing, and maintaining acquisition funds and/or land banks for development, redevelopment, and revitalization for the development of affordable housing
Goal: Increase Workforce Housing Along the Rail Corridor
1. Truly Affordable Housing
– Pairing lower housing costs with lower transportation
costs 2. Broadening Access To Opportunity
– Producing better economic and social outcomes
3. Increasing Employers’ Access To Metro Workforce
– Improving economic competitiveness and productivity
4. Stabilizing “High-Percentage” Riders
– Increasing transit access to populations who will use it
the most 5. Alleviating Gentrification Pressures Near Transit Stations
– Counterbalance the potential displacement of existing
workforce housing
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Build On Multiple State, Local Housing Studies
2008 Comprehensive Housing Strategy for the C&C of Honolulu, Mayor’s Affordable Housing Advisor Group
State-level Recommendations
Change purpose of the Land Use Commission to long-term planning Modify Low Income Housing Tax Credit allocation and requirements County-level Recommendations
2008 Report of the Governor’s Affordable Housing Regulatory Barriers Task Force
Establish county-level Office of Housing and provide a single government point-of-contact for housing development (Ongoing) Increase long-range housing planning capability at DPP
Nine additional studies and reports conducted between 1991 and 2006 by federal, state, and local agencies
Streamline the entitlement process to reduce length, cost Revise rules for Unilateral Agreements to 140% of AMI, transfer/sale of housing credits, and enhancement credits. (Complete)
Fee-based expedited third-party review by private consultants (Complete)
Plan/budget for infrastructure investment with Honolulu High-Capacity Transit Corridor Project and
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
TOD
Strategies
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Focus on creating mixed-income workforce housing opportunities near transit .
Engage employers and employee unions to expand employer assisted rental housing programs; Focus on preservation of existing housing units and; opportunities for acquisition and rehabilitation/adaption of existing structures; Actively pursue modifications to state and local regulatory policies to reduce impediments to create more affordable, energy-efficient housing.
Integrated, Targeted Approach for TOD Housing
Planning and Zoning
Inclusionary Zoning Expedited Permitting Reduced Parking Requirements Modify Unilateral Agreements
Incentives
Density Bonus Impact Fee Waivers Property Tax Waiver Tax Abatement
Financing
Land Acquisition/Banking Fund Pre-development Financing Gap Financing Preservation/Rehabilitation Financing Modify LIHTC criteria
Coordination
TOD Housing Coordinator Public-Private Partnerships Value Capture Tools For Infrastructure Programming Capacity Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
TOD Fund Structure and Activities
•
Enhance impact, funding through collaboration
– Use HUD funding for “top loss” or lead equity capital – Identify fund manager and define transactional role – Provide start-up support while structuring the fund – Create governance agreement to guide fund mission and
mechanics
– Solicit partners to build “capital stack” and mitigate risk Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Land Acquisition/Banking Fund for TOD
• • • •
Buy and hold strategic parcels before the real estate market heats up to control development later and ensure it meets community development goals Do catalytic projects to help “jumpstart” markets and help transition auto-oriented places into compact, walkable, transit-oriented places Ensure that existing affordable housing is preserved and new affordable housing is created—along with other important amenities—in valuable transit-rich locations Target small projects where preservation/development of affordable housing units is possible
Source: Center for Transit-Oriented Development
Land Acquisition/Banking Fund for TOD
Case Study: Denver Transit-Oriented Development Fund
$15m credit facility focused on preserving and creating affordable housing with access to transit Public-private partnership with Enterprise Community Partners and the Urban Land Conservancy Provides capital for non-profits to leverage for purchase, operation, and rehabilitation of affordable housing 100% Loan to Value Ratio, 5-year hold on property, and risk mitigation with “top loss” pool Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Case Study: Portland TOD Property Tax Abatement
Supports TOD by reducing operating costs through a 10-year maximum property tax exemption Applies to newly-constructed structures, additions or conversions within ¼ mile of transit Minimum of 10 units, 20% at 60 percent of AMI, 10% at 30 percent of AMI Sponsor must own or have site control and demonstrate exemption necessary for financial feasibility Annual cap of $20m for 3 years
Denver Transit-Oriented Development Fund
City & County Of Denver Enterprise Communities
Housing Finance Authority & Foundations Capital Sources
Commercial Lenders Bridging the Gap
Foundations
Local Government Fund Manager
Enterprise Communities
Borrowers
Urban Land Conservatory
CHFA DURA
Take-out Financing Senior Debt CDFI
DHA Capital Stack or Waterfall
Joint Venture Structure
CDC
• Affordable Housing Operator/ Manager •Workforce Placement •Social Services
Private developer
•Land owner •Conceptualization •Financing •Entitlements •Construction •Operations, Leasing & Management
City & County of Honolulu
•Planning & Zoning •Permitting •Community Outreach •Affordable housing •Transportation •Infrastructure Financing
Private Developer
Market-driven Infill Mixed-use Proximity to transit
• Return on Investment • Minimize risk • Create long-term value
City & County of Honolulu
Maximize community benefits Minimize environmental impacts Provide services Protect public health & safety
GAP Community Needs
•Mixed-income, •affordable housing •Neighborhood services •Job creation •Social & economic equity •Infrastructure
• • •
Creating the Implementing Entity – a local CDC
The term CDC refers to a type of non-profit entity known as a "community development corporation". CDC’s are characterized by their community-based leadership and their work primarily in housing production and/or job creation. This is what differentiates them from other types of non-profit groups.
CDC’s are formed by residents, small business owners, congregations and other local stakeholders to revitalize a low- and/or moderate income community. CDC’s typically produce affordable housing and create jobs for community residents. Jobs are often created through small or micro business lending or commercial development projects. Some CDC’s also provide a variety of social services to their target area.
A CDC is organized under section 501 (c) (3) of the Internal Revenue Code like any other non-profit entity . Local residents form the CDC getting together and developing a set of by-laws, file for incorporation with the state government and apply to the federal Internal Revenue Service (IRS) for designation as a tax exempt non-profit organization. The IRS designation is necessary in order for the organization to obtain grants and gifts from any government, corporate, or foundation sources or from individuals.
Roles & Responsibilities
EDA SBA US Treasury
•LIHTC •NMTC
HUD
• HOME • CDBG • Sec 108
Private Lenders
•Banks •REIT’s
Consultants
•Organization •Development •Financing
City & County of Honolulu
• Community Services •Economic Development •Planning & Permitting
Private Entities/ Foundations
•LISC •Enterprise Foundation •NeighborWorks •Living Cities
CDC
• Affordable Housing •Wealth Building •Community Transformation •Asset Management
Roles & Responsibilities
Consultants
•Organization •Development •Financing
City & County of Honolulu
• Community Services •Economic Development •Planning & Permitting Expertise Oversight
CDC
Limited Liability Partnership Vision Management Investment partners Shareholders
Neighbor - hood residents Private Entities/ Foundations
•LISC •Enterprise Foundation •NeighborWorks •Living Cities