Transcript Building Up: Developing a Supportive Housing Project Alison Recca-Ryan Leslie Wise John Rowland NATIONAL ALLIANCE TO END HOMELESSNESS CONFERENCE – JULY 12, 2005 Corporation for Supportive Housing www.csh.org.

Building Up: Developing a
Supportive Housing Project
Alison Recca-Ryan
Leslie Wise
John Rowland
NATIONAL ALLIANCE TO END HOMELESSNESS
CONFERENCE – JULY 12, 2005
Corporation for Supportive Housing
www.csh.org
Overview of the Agenda
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Who is CSH
Defining Supportive Housing
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Who Creates and Runs SH
Models of Housing and Services
The Environment for Supportive Housing
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What is Supportive Housing
Population served
Systems Fragmented vs. Systems Integrated
Funding environment
Planning & Systems environment
Small Group Break-Out Discussion
Financing of SH
Our Mission
CSH helps communities create
permanent housing with services to
prevent and end homelessness
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CSH’s Core Services
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Project development and finance
assistance
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Organizational/industry capacity building
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Advocacy/public policy reform
What is Supportive Housing?
A cost-effective combination of
permanent affordable housing with
services that helps people live more
stable, productive lives.
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A Distinctive Solution
Temporary/ Transitional
Interventions
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Uncertain length of stay
Program requirements
Isolated
Reinforce dependency
Supportive Housing
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Stable, no time limits
Independent living
Belong to a community
Personal responsibility for
behavior and rent
New approach to services
Who Lives There?
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Formerly homeless individuals, families, youth
People with serious, persistent issues:
substance use, mental illness, HIV/AIDS
People being discharged into homelessness
from the criminal justice system or other
institutional settings
Supportive Housing Works
for people
 57%  emergency room visits
 85%  emergency detox services
 50%  incarceration rate
 50%  in earned income
 More than 80% stay housed for at
least one year
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Supportive Housing Works
for communities
 Increased property values
 Neighborhood beautification
 Lower crime rates
 Overall economic impact
 More effective use of public resources
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Supportive Housing Types
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Dedicated buildings
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Rent-subsidized apartments
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Mixed-income buildings
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Long-term set asides
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Single-family homes
Services Make the Difference
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Flexible, voluntary
Counseling
Health and mental health
Alcohol and substance use
Independent living skills
Community building
Vocational counseling and
job placement
In Supportive Housing,
Tenants Choose to:
 Access appropriate care for and manage chronic
health and mental health conditions
 Take steps toward achieving and maintaining
sobriety
 Achieve housing stability
 Work
 Socialize
 Be leaders in their community
 Connect with the wider world
 Pursue goals and interests
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Tenant Commentary
“I have 2 years clean and sober, a steady job, I pay
my own rent – all of which I could not have done
without supportive housing.”
Charlie Miller, Tenant
Canon Kip, CA
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Models of
Supportive Housing
Models for Supportive Housing:
Traditional Development
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Creates a permanent asset to the
community
Involves acquisition and
construction and the full
compliment of development
activities.
Can take 2-3 years (or more!) to
develop
Involves establishing on-going
funding sources and providers for
operating and services Creates a
permanent asset to the community
Models for Supportive Housing:
Traditional Development
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Developing Project Concept/Assessing
Feasibility
Building a Development Team
Identifying and Securing Resources
Program Design and Construction
Preparing for Operations
Lease-up
Center House,
Asbury Park, NJ
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25 units
Urban, single structure
Combines Residential & Day
Center
Homeless individuals with
HIV/AIDS
On- and off-site services provided
by consortium of local agencies
TDC $4.5 million; HUD SHP,
LIHTC, HOME, Balanced Housing,
FHLB
The Fortune Society “The
Castle”
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Targeted tenancy: Formerly
incarcerated men and women,
including PWAs
Model: Single-site supportive
housing (41 units) and Shelter (18
beds)
Funding:
– Capital: HHAP, LIHTC, Historic Tax
Credits
– Operating: HOPWA, HUD S+C
(pending)
– Services: HUD SHP, HOPWA
SPNS, HOPWA, Existing agency
services
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Columbus, Ohio
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100 efficiency apartments
50% for chronically homeless
men and women, 50% for low
income people
Community room, linkage to
healthcare, education, and
employment services
Faith-based sponsor
Models for Supportive Housing:
Accessing Existing Housing
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Sometimes referred to as “Housing First”, also
might be referred to as Scattered Site Housing
Integrates residents into the community
Can “retrofit” existing affordable housing and add
services in a single site
Once secure rental subsidy, can move very
quickly
Involves establishing ongoing funding sources
and providers for operating and services
Accessing Existing Housing:
Opportunities Without Building
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Turn-key development
– Don’t develop, but get the building….
Master Leasing
– Often times fast and easy…
Scattered-Site
– The model of choice for many residents
Models for Supportive Housing:
Accessing Existing Housing
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Accessing existing
rental units in the
community and adding
wrap around services
Integrates residents into
the community
Once secure rental
subsidy, can move very
quickly
Involves establishing
on-going funding
sources and providers
for operating and
services
Scattered Site: One Example
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Using existing apartments in the community
Provider does not own units but might master
lease
No rehabilitation or construction involved – take
apartments “as is”
Owner of apartments typically private landlords
who own large and small apartment buildings or
2-4 family houses
Direct Access to Housing in CA
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The city of SF acquires sites for the DAH program
through “master leasing”
Most units have private baths and shared cooking
facilities
DAH housing presently includes:
– The Camelot Hotel (51)
– Windsor Hotel (78 units)
– Star Hotel (54 units)
– Pacific Bay Inn (75 units)
– Le Nain Hotel (86 units)
– Broderick Street Adult Residential Care Facility
(34 units).
LA: “No Fail” Housing
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Lamp Lodge is the permanent housing
component of LAMP Inc.’s continuum of
housing opportunities for people with mental
illnesses in Los Angeles
All are homeless when they arrive, and have
a history of mental illness; they may have
substance use issues as well
LAMP focuses on a philosophy of “no fail”
housing and a “non-linear case management”
model
Sunshine Terrace:
A Partnership with a PHA in Ohio
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Columbus Metropolitan
Housing Authority and the
YMCA of Central Ohio
partnered to convert Sunshine
Terrace into supportive
housing
50 units for formerly homeless,
services and security,
retraining of on-site staff
Project is now fully occupied
Who Creates
Supportive Housing
Who Creates Supportive Housing
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A wide variety of entities can create and operate
supportive housing
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The deciding factors include the type of SH and
the population to be served, the organization’s
experience and capacity, the competitive
environment, and even the funding sources
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Partnerships are also prevalent in SH creation
Who Creates Supportive Housing
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Mental Health and other Service Providers
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Homeless Service Providers
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NFP Affordable Housing Provider
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Public Housing Authorities
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Private Developers and Private Landlords
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SH providers who only create and run SH
Who Creates Supportive Housing
In some locales, there is a targeted initiative which
creates the environment for supportive housing
creation:
 In CT, the state agencies came together to create
a Demonstration and then the PILOTS initiative
 In NJ, the state created a “Long Term Support
Program” and put out an RFQ to find providers
 In CA, San Francisco and surrounding counties
have done targeted SH initiatives called HHISN
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The Environment for
Supportive Housing
Systems Fragmentation vs. Systems
Integration:
Challenges to Supportive Housing
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Integrated services and supportive
housing are products with proven
effectiveness ending chronic
homelessness – but without a system
to produce them
Siting/NIMBYism
Services funding
Sustainability
Results take time
Political will and support
Often, success means using money for
purposed that weren’t officially
intended
Systems Fragmentation vs. Systems
Integration:
Many systems share responsibility and serve
many of the same clients
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Homeless services
Social services
Employment
Child welfare
Education
Mental health
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Substance abuse
Housing development
and finance
Rent subsidy
Hospitals, clinics,
public health
Criminal justice
A Vision for a Better System
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Supportive housing as “standard response”
New and reliable sources of funding
Streamlined process for approving service
and housing funds
Supportive housing as a tool for community
development
Funding Environment
 New federal, state, and local investments
 Increased corporate and foundation funding
 Pressure to access Medicaid and other
mainstream funding sources for services and
operation
 Services for Ending Long-Term Homelessness
Act
 Modifications to Existing Sources – LIHTC,
HUD McKinney-Vento Homeless Asst., DOL
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National Momentum
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New federal, state, and local investments
Increased corporate and foundation funding
U.S. Conference of Mayors
Interagency Council on Homelessness
New Freedom Mental Health Commission
Samaritan Initiative
Services for Ending Long-Term Homelessness
Act
Local Planning & Momentum
 City, County and State 10-Year Plans to End
Homelessness
 State Interagency Council on Homelessness
 Continuum of Care Planning Groups &
Process
 State Policy Academies on Chronic
Homelessness and Family Homelessness
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Small Group Discussion
Supportive Housing
Development In Your
Community: Key
Partnerships and the
impact of Federal,
State, Local
Environments
The Financing of
Supportive Housing
Financing of Supportive Housing
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Supportive housing requires the financing of
three distinct components – development,
operating and services
Generally the projects require deep subsidies
and ongoing intensive services
The average # of funders for a supportive
housing project is 7 but it can range from 2 to 10
Financing Plan
Supportive Housing Project
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Pre-Dev
Capital
Operating
Services
HFA's
Banks
Intermediaries
LIHTC
HTF
HOME
Section 8
McKinney
LIHTC
McKinney
DHS
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Identifying & Securing
Resources
3 key budgets that must be financed
Capital
The bricks and mortar
Operating
Day-to-Day operations of the building
Services
Providing the necessary supports
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Funding Considerations
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Type of project
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Population served
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Eligible applicant
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Experience and team
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Compliance/regulations
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Geography
Capital – The Bricks and Mortar
DEVELOPMENT BUDGET
Schedule of Sources and Uses of Funds
Budget for capital funds used in the acquisition and
improvement of the real estate.
Capital costs are directly tied to the
acquisition and development of
the project, including “hard”
costs and “soft” costs.
USES
Hard Costs
Acquisition
Construction
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Contingency
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Soft Costs
Professional fees
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Financing fees
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Start-up costs
Developer fee
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Contingency
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Reserves
Capital
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Operating
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TOTAL USES
=
SOURCES
Equity
Owner's
Investor's
Loan
Grant
TOTAL SOURCES
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=
Capital
Potential Funding Sources
HUD
HOME
HOPWA
CDBG
Federal Home Loan Bank
Affordable Housing Program
Veterans Programs
State or Other Programs
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SHP
Operating Subsidy
Vacancy Allowance
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EFFECTIVE GROSS INCOME
EXPENSES
Real estate taxes
The difference
between the rents
paid by the
tenants and the
cost of operating
the completed
building
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Insurance
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Utilities
Maintenance and repairs
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Building payroll
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Management, admin. & marketing 
TOTAL EXPENSES
=
EFFECTIVE GROSS INCOME
TOTAL EXPENSES
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NET OPERATING INCOME
=
Debt Service
Cash Flow
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=
Operating Subsidy
Operating Subsidy
Potential Funding
Sources
HUD
State Programs
Section 8
Housing Choice
Shelter + Care
Section 8
Mod Rehab
Mainstream Housing Opps
SHP
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Support Services
What services will be made available to building
residents
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General Supportive Services
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Independent Living Skills
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Health Medical Services
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Substance Abuse Services
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Vocational Services
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Services for Families
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Support Services
Potential Funding Sources
Services
HUD
Department of Education
Veterans Affairs
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Department of Health and Human Services
SAMHSA
Mainstream
Medicaid
Ryan White
PATH
TANF
Health Center Grants
for Homeless Pops.
SAMHSA
Discretionary
Transitional Living Prog.
for Older Homeless Youth
Department of Labor
Challenges of Supportive Housing
Complex Financing
High Capital Costs
 Community/program space, security measures,
durable materials
High Operating Costs / Low Revenue
 Serves very low income tenants
 Cannot carry debt
 Needs deep rent subsidies
Support Services
 Few sources for non-institutional settings
 Need long-term availability
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The Development Puzzle
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Development (sources and uses)
Operating (sources and uses)
Services (sources and uses)
Population (physical, financial, support)
Property (rehab scope, acquisition price, site)
Timing (when $ and resources)
Organization (capacity, staffing, consultants,
partners…)
Community (input, approval, acceptance)
Michigan Example:
Heritage H.O.M.E.S. Inc.
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Formed through the 1997 merger of two well
established Western Michigan nonprofits
New organization combined the missions of
the original groups
Selected by the Allegan County consortium
as its nonprofit sponsor, developer, and
property manager for supportive housing
Heritage H.O.M.E.S. Multi-Site
Project Profile
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47-unit multi-site project part of
CSH’s Michigan Demonstration
Project
New construction, one-story
units across five rural sites
Target: people with special
needs, people who are
homeless, and those at risk of
homelessness
Heritage Homes Scattered Site
Financing Profile:
Capital:
 MI State Hsg Dev Authority (Home)
$2,800,000
 FHLB Affordable Housing Program
$25,000
 Allegan County General funds
$15,000
 Low Income Housing Tax Credit equity
$2,700,000
Total Capital Costs
$5,600,000
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Heritage Homes Scattered Site
Financing Profile:
Operating:
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A capitalized revenue deficit reserve was
established to maintain reduced rents for the
units over the 15-year tax credit period.
This reserve will act as a source of subsidy to the
project and will offset the low rents.
Rents are set at 30% of income for residents
Heritage Homes Scattered Site
Financing Profile:
Services
 Community Mental Health Family
Independence Agency
 Family Independence Agency
 McKinney-Vento Federal Supportive
Housing Program Grant
 Center for Independent Living
 Allegan Behavioral Health
 ACRDC (Transportation Grant)
Total Service Costs
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$775,000
$200, 000
$276,000
$10,000
$15,000
$84,000
$1,360,000
For More
Information:
Check out the following resources at
www.csh.org:
SH Financing Guide
Toolkit for Ending Long Term
Homelessness
CSH Policy Pages