Transcript Slide 1

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

Low Income Housing Tax Credit Program

Redevelopment Agencies

BRIDGE Project Examples
BRIDGE Housing Corporation
 Background

Mission
• Quantity, Quality,
Affordability

History
• Business Leadership
• 27 Years of Success
• Internationally
Recognized Leader
and Innovator
BRIDGE Housing Corporation
 Track Record

Approximately 15,000 Homes
and Apartments Developed

85 California Communities

37,000 Residents

Development in Northern and
Southern California
BRIDGE Housing Corporation
 Types of Developments
100%
90%
For Sale
Acquisition
Senior
Private
Partner
Family
Sole
Developer
Or with
Nonprofit
Partner
80%
Suburban/
Small City
70%
60%
50%
40%
Rental
New
Construction
30%
20%
10%
0%
Inner City
BRIDGE in 2012

More than 2,000
units breaking
ground, with a
combined total
value of more than
$450 million
MIXED INCOME – Irvington Village, Fremont
Mixed Income Family Rental and Homeownership
100 affordable units
Project Value: $31,800,000
283 market-rate units
Project Value: $148,000,000
SUSTAINABILITY – Mission Walk, San Francisco
Family Homeownership
131 units
Project Value: $63,500,000
SENIOR RENTAL – Foothill Farms, Sacramento
Senior Rental
Total Units: 138
Project Value: $26,000,000
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
TRANSIT-ORIENTED REDEVELOPMENT
North Beach Place, San Francisco
Mixed-use Family Rental
341 units
Project Value: $108,400,000
Up to 60% AMI
AFFORDABLE HOMEOWNERSHIP
Armstrong Townhomes
Family Homeownership
124 units
Project Value: $60,000,000
Condominiums were priced
$175,000 to $345,000 and affordable to
households earning 60 to 100% of AMI
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 twobedroom apartment at FMR
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 twobedroom apartment at FMR
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.
Continued Demand
Traditional Financing Tools
For Non-Profit
Affordable Housing
Restriction
Competition
Lead Time
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+ years
severe reductions
Prop 1C
High
High
N/A
501(c)3 Financing
MHP/RDA
---- GONE ----
Traditional financing tools are inadequate to meet increasing need in our region.
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
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
Impact of Economic Downturn
Banking Crisis
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
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
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
DEMAND SNAPSHOT
The Coronet, San Francisco
Senior Rental
150 units
Project Value: $55,000,000
15-40% AMI
Wait/Interest list of over 7,000
LIHTC Program:
Equity Pricing Trend / Investor Yield Change
RDA Funding
# of Units
Amount of RDA
Funds
Committed
TDC
Northern California
16th Street Station
474 Natoma Family Apartments
San Leandro Crossings
Foothill Farms Senior Apartments
MacArthur Transit Village
Affordable Housing
St. Joseph’s Senior
St. Joseph’s Family
Rene Cazenave Apartments
West Sacramento
825
$89,886,656
$279,831,364
Southern California
9th & Broadway
Comm22 – Family
College Park
Summerhouse Phase 2
575
$46,750,000
$174,856,211
1,400
$136,636,656
$454,687,575
Properties
TOTAL
MacArthur Transit Village, Oakland
Mixed-use, Mixed-income Family Rental
Affordable Units / Total Units: 108 / 624
Project Value: $329,800,000
COMM22, San Diego
Mixed-use Family Rental
Total Units: 200
Project Value: $77,928,000
9th & Broadway, San Diego
Mixed-Use Rental
Total Units: 250
Project Value: $73,500,000