HomeMy WebLinkAboutCC WORKSESSION PACKET 08102017
Work Session Agenda
Thursday, August 10, 2017
7:00 p.m.
1. Affordable Housing 101. Stacie Kvilvang and James Lehnhoff, Ehlers presenting
2. Adjournment
8/9/2017
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Affordable Housing Discussion
Stacie Kvilvang -Ehlers
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What is Defined as Affordable?
2
HUD Income Definitions:
•Low Income –Household income at or below 80%of area median income (AMI)
•Low to Very Low Income –Household income at or below 60%of AMI
•Very Low Income –Household income at or below 50%of AMI
•Extremely Low Income –Household income at or below 30%of AMI
# of Persons 30%50%60%80%
1 $18,990 $31,650 $37,980 $47,600
2 $21,720 $36,200 $43,440 $54,400
3 $24,420 $40,700 $48,840 $61,200
4 $27,120 $45,200 $54,240 $68,000
Income Limits By Household Size
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Affordable Rent Limits (HUD 2017)
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Unit Type 30%50%60%
Studio $474 $791 $949
1 - Bdrm $508 $848 $1,017
2 - Bdrm $610 $1,017 $1,221
3 - Bdrm $705 $1,175 $1,410
Rent Limits
Rent Maximum For Family of 4 in 2-Bedroom
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Area Median Income (AMI): Median 30% 50% 60% 80%
Household Income (Family of 4): $ 90,400 $ 27,120 $ 45,200 $ 54,240 $ 72,320
Monthly Affordable Rent (2 bedroom): $ 2,480 $ 610 $ 1,017 $ 1,221 $ 1,990
HUD 2017, Twin Cities MSA
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What Does St. Anthony Have For Affordable Rental Property?
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•30%of the City’s units (433) have been constructed in last
15 years
–Of those, 52%were affordable
•The Landings –20%affordable at 50%of AMI
•The Legends –100%affordable at 60%AMI
Number of
Properties
Number of
Units
Number of
Affordable units
Percent of Units
Affordable
Number &
Percent
Affordable at
30% of AMI
Number &
Percent
Affordable at
50% of AMI
Number &
Percent
Affordable at
60% of AMI
45 423 753
4%35%62%13 1,458 1,221 84%
Allocation of Regional Affordable Housing Goals
•Metropolitan Council’s Allocation Methodology:
–Total Forested Growth (Thrive MSP Regional Plan)
–Adjusted by Ratio of Low-wage Jobs to Low-wage Workers
–Adjusted by Existing Affordable Housing
•St. Anthony’s Allocation:
–Time Period: 2020 to 2030
–Total Forecasted Household Growth (excludes Lowry Grove
redevelopment): 100 households
–Allocated Affordable Housing Need: 38 New Affordable Units
•19 Units Affordable at or below 30%of Area Median Income
•13 Units Affordable between 31% and 50% of Area Median Income
•6 Units Affordable Between 51% and 80% of Area Median Income
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Case Study –Market Rate vs Affordable Rents
•97-unit apartment complex
•$200,000/unit in total development costs
–Total development costs of $19.4 million
•5% vacancy rate
•Revenues and expenses increase at 2% annually
•Developer cash/equity 20%
•Finance/mortgage 80%
•Expected return on developer cash/equity 10%
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Difference in Net Operating Income –Market Rate vs. Affordable
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Type # of Bedrooms Monthly Rent Income Available for
Debt Service
1 1,400$
2 2,500$
3 2,800$
1 848$
2 1,017$
3 1,175$
Difference N/A N/A (1,186,580)$
Type # of Bedrooms Monthly Rent Income Available for
Debt Service
1 1,400$
2 2,500$
3 2,800$
1 508$
2 610$
3 705$
Difference N/A N/A (1,613,043)$
97-Unit Apartment
Market Rate Rents
Rents @ 50% AMI
97-Unit Apartment
Market Rate Rents 1,475,094$
Rents @ 30% AMI (137,949)$
1,475,094$
288,514$
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Financial Impact
•50% rent “write down” over 30 years = $35.6M ($1.186M/year)
–Annual impact to average value home (21%tax increase)
•30% rent “write down” over 30 years = $48.4M ($1.613M/year)
–Annual impact to average value home (28%tax increase)
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Estimated Market Value Taxable Proposed
Market Value Exclusion Market Value Tax Increase*
150,000$ 23,740$ 126,260$ 352$
200,000 19,240 180,760 505
Residential 260,000 13,840 246,160 687
Homestead 300,000 10,240 289,760 809
400,000 1,240 398,760 1,113
TAX IMPACT ANALYSIS
Type of Property
Estimated Market Value Taxable Proposed
Market Value Exclusion Market Value Tax Increase*
150,000$ 23,740$ 126,260$ 259$
200,000 19,240 180,760 371
Residential 260,000 13,840 246,160 505
Homestead 300,000 10,240 289,760 595
400,000 1,240 398,760 819
Type of Property
TAX IMPACT ANALYSIS
Sources of Funding For Affordable Housing
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Type of Funding Level of Competitiveness
Low Income Tax Credits (4% and 9%)High
Tax Exempt Bonds High
Minnesota Housing Finance Agency (MHFA) Deferred Loan High
HOME High
CDBG High
AHIF (Hennepin County)High
Livable Communities Demonstration Account (LCDA)High
Local Housing Incentives Account (LHIA)High
Tax Increment (only source cities have control over)* Low
* If City doesn't have a large amount of its tax capacity captured by TIF
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What Does the City Really Have to Offer?
•For no tax impact to existing residents and businesses
–City can provide tax increment assistance (TIF) on a pay-as-you-go
basis
•Based upon 97 units
•Value of $150,000/unit
•4d tax classification (affordable housing tax rate)
•Approximately $121,000/year
–Developers have to seek other traditional funding sources in
order to develop affordable housing
•Low income housing tax credits
•CDBG, HOME or AHIF grants from the Hennepin County
•Minnesota Housing Finance Agency (MHFA) deferred loan
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Final Comments
•St. Anthony already provides a variety of affordable
rental housing options, well above what many other
communities do
•St. Anthony has always been committed to affordable
housing as demonstrated in their financial participation
in the only two (2) rental developments proposed and
completed in the last 15 years
•St. Anthony is open to financially assisting future
affordable rental projects if/when they come forward
•St. Anthony alone cannot solve providing housing for
very low or extremely low-income residents since they
are limited in what they have as financial tools (only TIF)
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Questions
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