Transcript Ryan Moser, CSH - National Association of Counties

Assembling the Resources for
Supportive Housing
Minneapolis, June 7, 2012
[email protected]
1
What Is Supportive Housing?
A cost-effective combination of permanent,
affordable housing with services that helps
people live more stable, productive lives.
2
Models of Supportive Housing
• Single-Site, Single Purpose
• Single-Site, Integrated
• Clustered Scattered-Site
• Scattered-Site
• Set-Asides
3
SERV – Integrated Housing
• Bergenline Ave (Hudson County, NJ) and Boulevard
East (Bergen County, NJ)
– Each building has12 units that include 5 PSH units and 7
affordable units.
• Guttenberg (Hudson County, NJ)
– 14 unit property that offers 6 PSH units and 8 affordable
units.
• PSH units serve people with serious mental illness. All
units serve people at 50% and below AMI.
Vision Drives Resource Development
•
•
•
•
•
Mission Mandate
Community and Individual Needs
Agency Priorities
Budget Drivers
Choice of Population, There is Never Enough
Supportive Housing to Serve Everyone
5
Developing a Supportive Housing Initiative

Can be confusing!

Not necessarily linear

No standard model

Tasks are interdependent

Multiple players
6
ONE: Concept
Go?
TWO: Feasibility
No Go?Go?
Go?
THREE: Dealmaking
No Go?
Go?
FOUR: Development
FIVE: Operations
7
Operating
Targeted Tenancy
Development
Budget
Services
Budget
Operating
Budget
8
A Typical Deal
• Capital
– HOME/CDBG
– Low Income Housing Tax Credits
– Federal Home Loan Bank
• Operating
– HUD McKinney
– Section 8
• Services
Medicaid
Philanthropy/Foundations
Local Sources
Specialized Partnership Services
Development
Scattered-Site
or
Set-Aside
9
C
The First Leg:
Capital
10
C
To Build or Not to Build,
That is the Question.
•
•
•
•
•
Pros
Long term project stability
Take advantage of
property assets; affordable
housing market
Building culture can be
pro-social
Exciting flagship
Easier to offer onsite
services
•
•
•
•
Cons
Minimum 3 year timeframe
Development Requires a
High Capacity Housing
Partner
Not In My Back Yard
Concentration
11
C
Capital Builds the Box
•
The costs of designing, purchasing, building or
rehabilitating, and filling housing units with
tenants.
– Soft Costs: Consultant Fees, Architectural Drawings,
Marketing Units, Appraisals, Legal Fees, Permits, and
Studies
– Hard Costs: Acquisition, Construction or
Rehabilitation, and Offsite Improvements
12
C
Capital Sources
•
Capital funding is generally offered in the form of
either:
– A grant
– A deferred loan (which operates as a grant for a
specified period of time)
– A low-interest loan
– A Low-Income Housing Tax Credit Award providing
investment equity
13
Castle Gardens, The Fortune Society
Capital Sources
•
•
•
•
•
•
•
•
•
•
•
•
•
NYS Housing Finance First Mortgage $3,600,000
NYS Housing Finance Second Mortgage $4,000,000
Federal Home Loan Bank Affordable Housing Program
$1,500,000
NYS Office of Temporary and Disability Assistance,
Homeless Housing Assistance Program $5,500,000
NYC Supportive Housing Loan Program (SHLP)
$8,300,000
Mayor’s Fund $250,000
NY City Council $2,000,000
Borough President Capital Funds $1,000,000
NYS Energy Research Development Authority $239,390
Enterprise Green Communities $50,000
Low Income Housing Tax Credits $16,060,594
Deferred Developer Fee $ 1,000,000
Total $43,499,984
14
C
Sources & Uses

Schedule of Sources & Uses
– Combines costs with the financing
Acquisition
Construction
S oft Costs
Reserves
Developer’s Fee
Other
Total
Total # of development
units
Total Development Cost
per Development Unit
(excluding reserves)
15
#1 IHCDA
Total $ Amount Trust Fund
$1,200,000
$8,000,000
$750,000
$2,250,000
$250,000
$1,200,000
$0
$12,900,000
$750,000
#2 IHCDA
HOME
$1,200,000
#3 Donations
Tax Credit
Equity
#4 AHP
$1,800,000
$600,000
$1,200,000
$1,800,000
$600,000
Tax Credit
Equity
$5,450,000
$1,650,000
$250,000
$800,000
Deferred
Developer
Fee
$
400,000
$8,150,000 $
400,000
80
$161,250
C
Sources of Financing
Federal Sources:
• Federal Home Loan Bank Affordable Housing
Program (AHP) ($750,000)
• HUD 811 & 202
16
C
Sources of Financing
State Sources:
• Low-Income Housing Tax Credits (LIHTC)
• Indiana Development Fund or New York State
Housing Assistance Program
• HOME and Community Development Block
Grant (CDBG) Funds
17
C
Sources of Financing
County or Municipal Sources:
• HOME/CDBG
• Local Housing Trust Funds
• Tax Reaction/Scavenger Sale/donation of publiclyowned land (for acquisition)
• Tax Increment Financing Districts (TIFs)
• Empowerment Zones
• Enterprise Zones
18
C
Low-Income Housing Tax Credits
• Eligibility is based on tenant income using HUD
median income data, adjusted for family size
• Rent restrictions – below 60% of AMI
• Tax credits received over the first 10 years of
operation, but compliance period is 15
• Typically suited for projects of at least 20 units
19
C
Key Concept:
Housing Funding is
Restricted to Housing
20
The Second Leg:
Operating
21
Operating Pays the Bills
•
The costs of operating and maintaining the
housing, including all costs of maintaining the
project once it is ready for occupancy:
–
–
–
–
–
–
–
Utilities
Maintenance Services
Insurance
Security
Debt Service or other Loan Payments
Operating and Replacement Reserves
(rent)
22
Relationship with the Development Budget
DEVELOPMENT BUDGET
OPERATING BUDGET
Schedule of Sources and Uses of Funds
Schedule of Income and Expenses
Budget for capital funds used in the acquisition and
improvement of the real estate.
Annual budget for the operation of the real estate once
development is complete.
USES
INCOME
Hard Costs
Acquisition
Construction
Contingency
Gross Residential Rent


Soft Costs
Professional fees
Financing fees
Start-up costs
Developer fee
Contingency
Operating
TOTAL USES


Vacancy Allowance



EFFECTIVE GROSS INCOME



EXPENSES
Reserves
Capital
Other income
Gross Commerical Rent (if any)
Real estate taxes
Insurance
Utilities


=



Building payroll

Management, admin. & marketing 
Maintenance and repairs
TOTAL EXPENSES
=
SOURCES
Equity
Owner's
Investor's
Loan
Grant
TOTAL SOURCES
EFFECTIVE GROSS INCOME


TOTAL EXPENSES

NET OPERATING INCOME
=


Debt Service
Cash Flow

=
=
23
O
Who Pays for Operating Support
• Sources that pay for costs of operating and/or
maintaining the housing or physical component
of supportive housing
• Who comprises the primary sources?
– Federal - HUD
– State
– County/Municipal
• Again, depends on your TARGET POPULATION
24
O
Sources Overview
Name
Source
Description
Shelter Plus
Care
HUD
McKinney
5 or 10 yr project-based subsidies –
homeless, disabled
Supportive
Housing
Program
HUD
McKinney
Funds leasing or operating costs –
homeless, disabled
Project Based
Section 8
HUD and
PHA
Administered by state or local
housing authority
Section 811
HUD
Funds independent living facilities –
could be used for sup hsg
HUD VASH
HUD
Funds leasing and supportive
services for homeless veterans
25
O
HUD McKinney – Shelter Plus Care
• Rental assistance only eligible activity under SPC
• Funds provide the operating costs excluding
services
• Target Population: Homeless and Disabled as
defined by HUD
• Applicant must provide supportive services in
an amount at least equal to the rental
assistance provided during the term of the
grant
26
O
HUD – Shelter Plus Care
•
•
•
•
New construction: 5-year initial grant
Rehabilitation: 10-year initial grant
Can be sponsor-based or project-based subsidies
Must apply through the local Continuum of Care
– Grants are large because must be for 5 or 10 years is
there room in the Continuum?
– Example: 15 unit, 1bd, SPC for 5 years = around $1
million dollars
27
O
HUD – Supportive Housing Program
• Operations
– HUD Regulation: Pay up to 75% of annual costs
– Using other cash resources, make up difference
between the total costs and the SHP grant
• Leasing
– Can pay for up to 100% of annual leasing costs
– With leasing, you cannot be the owner
28
O
SHP Considerations
• SHP budgets do not allow for annual increases, even if
your costs rise over time
• Continuums may have additional budget requirements
• Initial grant is typically for 2-3 years. Grants are renewed
competitively on annual basis after initial award
• Grant is a direct grant with HUD
• Online:
www.hud.gov/offices/cpd/homeless/library/shp/index.cfm
29
O
Continuum of Care Homeless
Bonus Project
• Bonus allocated to Continuums on annual basis
• Must fund ONE permanent supportive housing
project that serves homeless, disabled
• Equal 15% of Continuum’s pro-rata allocation
• In past, project had to be 80% housing and 20%
services
30
O
Bonus Project Considerations
• Good money if your project is located in
Continuum with a decent size bonus
• Can fund leasing or operations
• Some Continuums are not able to use their
bonus dollars due to lack of matching funds
31
O
Key Concept:
Get to know your
Continuum of Care.
32
Tenant-Based Section 8
• The typical scattered-site rental subsidy only
program
• Can be challenging for tenants with special needs
to navigate
• Specialized waiting lists can be set up by PHAs
33
O
Project-Based Section 8
• Project-Based voucher remains attached to the unit.
• Lesser known voucher component, and is optional
for the PHA up to 20%.
• PHA attaches rent subsidy to a unit of rental
housing through a contract with the owner that can
last from 1 year to 15 years.
34
O
Sponsor-Based Section 8
• Newer process, similar to Shelter Plus Care
administration where vouchers go to a sponsor
agency
• Can be used to increase access for people in need
of supportive services
• Available in Moving To Work sites
• Signals from HUD that they will review waiver
requests for PSH related sponsor-basing
35
O
Project-Based Section 8 Considerations
• PHA may have restrictions that exclude the
population project intended to serve
• May require some education with PHA
• Section 8 certificates may be oversubscribed
• More info:
www.tacinc.org/Docs/HH/OpeningDoors/ODIssue28
.pdf
36
O
Public Housing Units
• Also administered by the PHA, although there
are sometimes different applications
• Barriers can be harder to negotiate
• Efficiencies sometimes have higher vacancy rates
37
O
Key Concept:
Get to know your
PHA/Vouchering
Agency.
38
State/Local Rental Assistance
• Does not necessarily have the same targeting as
Federal rental assistance.
• May not have the same barriers related to CJ
populations.
39
O
Section 811
• The Section 811 program allows persons with
disabilities to live as independently as possible in
the community by increasing the supply of rental
housing with the availability of supportive services.
• Current RFP has changed the format providing only
operating assistance and requiring a partnership
with the Medicaid administering agency and focus
on high cost recipients.
40
O
Section 811 Considerations
• Announced through competitive process in
the HUD SuperNOFA (notice of funding
availability)
• Timeframe: Spring
41
O
HUD HOPWA Program
• National dollars – Competitive SPNS dollars
• Local dollars – formula dollars funneled through Dept
of Public Health or Dept of Housing
• Amount of funding varies by location
• Funding specific for HIV/AIDS population
• Funding can include rental assistance, however, grants
are typically not for more than 2-4 years at one time
42
O
Funding Restrictions to Consider
• As we discussed with services, public financing
program rules can differ significantly by source
• Need to consider:
– How does the source define homelessness?
– Are their qualifying disabilities?
– Are there barriers based on Criminal Justice
or other restrictions?
43
O
Key Concept:
Operating stream may
hide the need for capital
funding.
44
The Third Leg:
Services
45
S
Develop a Service Plan
You’ll use it to inform your Service Budget
• TARGET POPULATION
• Service Needs
• Services Program
– Overview, Partners and Roles, Staffing, Outcomes
• Budget and Staffing Plan
46
S
Common Approaches
•
•
•
•
47
Contracts with funders for services to a set
of eligible clients.
Reimbursement agreement for certain
services to eligible clients.
Fixed fee for maintaining the health of
individual clients.
Grants that help cover service expenses.
S
Budget Components (cont)
• Other expenses
– Consultant/contractual services
– Social/client services
– Transportation
– Staff training
– Supplies & materials for services
– General office supplies and support
48
S
Federal Service Funding
• Significant portion of funding for services
• Some funding directly apply to feds
– Continuum of Care (through local process)
– Special request for proposals
49
S
Federal Service Funding
• Majority of funding flow to local level
– Alphabet Soup - TANF, Medicaid, SAMHSA,
Dept of Ed, VA, DOL, SSA
– Departments of Health & Human Services,
Social Services, Education/Training,
Employment, Workforce Investment Board,
Schools
50
S
Federal Sources to Consider
• HUD - McKinney Vento Programs
– Through Continuum of Care
– Typically limited % and part of larger request
– Flexible funding
• HUD - HOPWA Program
– National: Part of housing request
– Local: Depends on local criteria – may be good
source for HIV impacted client services
51
S
Federal Sources to Consider
• HUD - CDBG Funding
– Block grant to local jurisdictions
– Check Consolidated Plan for Current Spending
Priorities
– Flexible dollars for services
• HHS – Health Related Funding
– Ryan White service dollars go through local planning
council – services for HIV+
– Advocacy for line item to fund services in supportive
housing
– Dollars distributed to local/state agencies
52
S
Federal Sources to Consider
• Special RFPs
– Programs through Dept of Agriculture,
Education, Labor, Justice (SCA), Veterans
Affairs, Social Security Admin. and Youth
Related Programs, SAMHSA
– Not frequent; often narrow population focus
53
S
Veterans Administration Resources
• The Department of Housing and Urban
Development and the Department of
Veterans Affairs Supported Housing (HUDVASH)
– Long-term case management
– Supportive services
– Operating support
• Veterans Justice Outreach Initiative
54
S
State, County, Municipal Resources
• Medicaid for eligible participants and eligible services
• Revenue through the Community Mental Health
Centers
• Dollars may be available through other agencies
depending on population (i.e., Division of Child
Services and the Youth Aging Out of Foster Care
partnership with Connected by 25)
55
S
Key Concept:
Services are often the
most difficult leg to fund
and require the greatest
creativity.
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Strategic Considerations
57
Private Funding
• Can Play an Important Strategic or Gap Filler Role
• Foundation Dollars
– Explore both local and national foundations
– Usually targeted to specific activities, population, or
geography
• Other Private Funding
– Grants through banks or corporations - Usually targeted
to specific activities, population, or geography
– Private philanthropy/fundraising
– Community Foundations
58
Strategies
• Pick up the phone
• Compromise on targeting
• Advocate for funding using budget neutral
approaches, targeted to your audience
• Offer funding, support, resources in exchange for
consideration
• Use philanthropic support as a leading wedge
59
Pitfalls
• Compromise doesn’t mean water down
• You’re creating housing for people with CJ histories,
not jails
• Be mindful when mixing funding resources, keep
the focus on low threshold
• Resist the urge to do it on the cheap
• Resist the urge to transitionalize
60
Leveraging Mainstream Resources
• Mainstream Public and Affordable Housing
Resources
• Health Care Systems
– Health Reform
– For-Profit Entities (Hospitals/Managed Care)
• Examples of Federal Direction
– Current Section 811 RFP
61
Bud Clark Commons (Portland, OR)
• 130-unit PHA-owned and
managed supportive
housing
• Waiting list populated by
referrals from 3 FQHCs
using DESC Vulnerability
Assessment Tool on clinic
patients
• Services include:
– PHA-provided housing
stability services
– 2 contracted mental health
clinicians
– Medical case management
and primary and behavioral
health services by 3 FQHCs
62
CSPECH (Massachusetts)
• Partnership between MHASA,
MBHP (Value Options), and health
and supportive housing providers
• Developed through the
Community Support Program as
part of an 1115 Medicaid waiver
• Targets chronically homeless with
high health need indicators
• Uses both scattered and singlesite projects to access housing
through providers
• Uses contracting structure to
extend support network to nonbilling agencies
63
CSH Lending Products
64
CSH Lending Products
Project Initiation Loans (PILs)
• These early stage loans are a unique CSH offering.
They encourage developers to get projects off the
ground with incredibly flexible terms that include 0%
interest, typically up to $50,000.
Predevelopment Loans
• CSH predevelopment loans are flexibly structured to
meet your project’s financing needs. We can even
consider loans of over 100% of collateral value.
65
CSH Lending Products
Acquisition Loans
• Financing for real estate acquisition in connection
with the development of supportive housing.
Other Lending Products
• Construction
• Mini-Perm Loans
• Preservation Finance
66
Why CSH Lending
All CSH loan products are tailored to your needs. We offer below
market rates and favorable terms to provide early stage capital to
supportive housing projects that can make a difference in your
community. We’ll even work with you to pair financing with technical
assistance to help ensure that your project is the highest quality
supportive housing.
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Key Concept:
You’re not in it alone
FINANCING
PHASES
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