Stewardship for Lasting Affordability

Stewardship for Lasting Affordability Administration and Monitoring of Shared Equity Homeownership

Rick Jacobus Burlington Associates in Community Development

Stewardship Functions

Frates Square, Housing Land Trust of Sonoma County

Stewardship Functions

Stewardship Functions

Potential AgentsWho holds key responsibilities?

Minimal AdministrationNo Designated Steward

Santa Barbara CountyLocal Government as Steward

City of SalinasDevelopers Hire Private Contractor

Lafayette, COCity Hires Private Contractor

City of Palo AltoCity Contracts with Nonprofit

Tri-Valley HousingLocal Governments Form Nonprofit

Chapel HillCommunity Land Trust as Steward

Staffing and Revenue

MunicipalityShared Equity

Ownership UnitsEstimated staffing

(FTEs)Est. Units/FTE

Somerville, MA 41 2.5 16.4

Lafayette, CO 70 0.75 93.3

West Sacramento, CA 80 3 26.7

Palo Alto, CA 169 1.25 135.2

Housing Assistance Council of Cape Cod 250 0.25 1000.0

Boston, MA 400 3 133.3

Santa Barbara, CA 453 1 453.0

Bedminster Township, NJ 680 1 680.0

Denver, CO 700 1 700.0

Fairfax County, VA 1400 3 466.7

Montgomery County, MD 1976 6 329.3

NJ Housing and Mortgage Finance Agency 5000 10 500.0

Economies of Scale

Common Revenue Sources

• Local Government General Funds• Local Housing Funds• Application Fees• Refinance Fees• Marketing Fees from Developers• Resale Fees from Homeowners• Admin Fees/Ground Rent• Grants/Fundraising

Scalable Revenue

• Marketing Fees

• Resale Fees

• Admin Fees

Grows with Portfolio

Marketing Fees

• Workforce Housing Association of Truckee Tahoe– 3% of Affordable Sales Price

• Housing Land Trust of Sonoma County– $7,000 per unit

• City of Somerville, MA– $2,500 per unit

Traditional Realtor Commission = 6% of price

Charged to Developers at Initial Sale

Resale Fees

• Palo Alto – included in annual fee for service contract with City

• Tri Valley Housing Opportunity Center– $1,000 per sale (no marketing)

• Santa Clara, CA -NHS – ~$10,000 per sale (with marketing)

• State of New Jersey – 3% of Affordable Sales Price (with marketing)– 1.25% of Affordable Sale Price (without marketing)

Charged to Homeowners at Sale

Admin Fees

• Community Land Trust Ground Lease Fees– $20 - $100 per unit per month

• City of Chicago/Chicago CLT– “Covenant Fee” $25 per unit per month

• Urban Homesteading Assistance Board– Co-op Monitoring Fee $1,500 – 4,500 per

co-op building per year

Charged to Residents Monthly/Annually

Stewardship Costs

Sample Program Costs

Palo Alto - PAHC– $140,000/ 169 units ($828/unit)

• San Jose - NHS– $60,000/~ 125 units (~$500/unit)

• Montgomery County, MD – $400,000/1,976 units ($202/Unit)

Stewardship Costs

• We don’t have enough information to know what the right range of costs should be!

• Many programs are very significantly under funded

• Costs per unit seem to drop with volume (ie. There are significant economies of scale)

• Costs seem to increase with subsidy levels

Stewardship Costs

High Cost Lower CostMarket House Price 500,000$ 250,000$ Average Affordable House Price 325,000$ 150,000$ Value in Trust 175,000$ 100,000$

Budget for 300 Unit Program 240,000$ 135,000$

Stewardship Cost Per Unit 800$ 450$ Cost as % of Value in Trust 0.46% 0.45%

*Hypothetical values only

Relative to “Value in Trust”

Rick JacobusBurlington Associates

510-653-2995

Rick@rjacobus.com

www.rjacobus.com