Best Practices in Workforce and Mixed-Income

Housing

Friday,

October 15

11:00 a.m. – 12:15 p.m.

FINANCIAL PARTNERS

RBS Citizens Bank NH Community Loan Fund

Bowdoin Charitable Trust for Housing Creation

NH Housing Finance Authority PNC Bank

Town of Hanover Grafton County

DEVELOPERS

BACKGROUND

• Regional housing shortage

• High-cost town

• Sustained advocacy effort for work force housing

• Town meeting vote

• Donated land

PROGRAM CONSTRAINTS

• 50% Affordable up to 100% of AMI • Mix of for sale and rental homes

PROJECT TIMELINE

• Town Meeting votes – 2001 + 2002 • Site plan application – Fall, 2005 • Site plan approval – January, 2007 • Construction start – September, 2007 • Delivery of first buildings – November, 2008…

Total units Planned: 120 • Rentals – 61 units(all complete) • Affordable Rental: 46 (LIHTC) • Market rentals: 15 (all workforce- no

restrictions) • Condos – 59 units (36 complete) • Market above workforce: 23 • Market workforce: (no restrictions): 22 • Income-restricted workforce: 14

LESSONS LEARNED 1. Workforce Housing Works

– Public Acceptance

– Market Acceptance

– Successful Public Policy

2. Resist Complexity

3. Beware and Be Vigilant when Ignoring #2 - Deviations from the norm require extreme preparation

4. Mission-based lenders can play a key role

5. Perceived quality critical in overcoming market skepticism

6. Don’t try to save on affordable unit finishes

7. Do be strategic about location/view decisions

8. Affordable rental development experience does not equate to affordable for sale experience

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2010 ULI FALL MEETING AND URBAN LAND EXPO

October 15, 2010

Best Practices In Workforce And Mixed-Income Housing

RENAISSANCE SQUARE

ENTERPRISE HOMES

• Create homeownership and rental

opportunities for families from all walks of life

• Develop affordable workforce and market-

rate housing

– Affordable at 30-60% area median income

– Workforce homeownership at 60-120% area median income

– Market-rate homeownership

• Created over 5,000 homeownership and

rental residences for families and individuals

of diverse income, age, and culture

RENAISSANCE SQUARE

DEVELOPMENT OVERVIEW

• 18 Acres

• Former failed FHA Section 8: 300+ units

• HUD/County Property Control

• Community Charette led by Baltimore County and Design Collective

• Pattern Book

• RFQ/RFP Issued by Baltimore County 2006

• Contract Awarded 2007

• Contract Signed October 2008

• Closed Financing – 1st Quarter of 2009

RENAISSANCE SQUARE

RENAISSANCE SQUARE

RENAISSANCE SQUARE

DEVELOPMENT

• 196 units – 81 senior LIHTC

– 115 Ownership

• 65 Renaissance Credit

• 50 Market

RENAISSANCE SQUARE

SITE PLAN

RENAISSANCE SQUARE

FINANCING

• Susquehanna Bank

• Maryland DHCD

• Baltimore County

• Enterprise Green Communities

• Enterprise Community Investment, Inc. LIHTC

Total Development Cost: $11,715,000

81 Senior Apartments

RENAISSANCE

SQUARE WORKFORCE

OWNERSHIP • 115 Homes

– 65 Renaissance Credit • (60%-115% AMI)

– 50 Market • Four Housing Types

– Townhouse 1400 s.f.

– Cottage 1500 s.f.

– Manor 1900 s.f.

– Villa 2500 s.f. • Pricing

– $224,375 - $300,000

– $280,000 - $350,000

RENAISSANCE SQUARE

WORKFORCE OWNERSHIP

• County Contributions – Land

– $4 million Infrastructure

• Developer Contributions – $2.1 Million Renaissance

Credit

RENAISSANCE SQUARE

WORKFORCE OWNERSHIP

Construction Financing

Susquehanna Bank Revolving Line $3,000,000

Baltimore County $4,131,802

Developer Equity $2,100,000

Total Development Costs $27,472,973

RENAISSANCE SQUARE

INCOME STRATIFICATION

• 10 HOMES 60-70% AMI

• 10 HOMES 71-80% AMI

• 15 HOMES 81-90% AMI

• 15 HOMES 91-100% AMI

• 7 HOMES 101-107% AMI

• 8 HOMES 108-115% AMI

RENAISSANCE SQUARE

DEED RESTRICTIONS

• 15-year re-sale restriction to affordable buyer

• Year 1-5 – Down Payment

– Equity/Improvements

• Year 6-15 – Down Payment

– Equity/Improvements

– After year 5 Equity = 10% per year of Renaissance Credit

RENAISSANCE SQUARE Renaissance Credit Permanent Financing

70-80% AMI*

Sale Price $225,500

Estimated Closing Costs $ 15,575

Total Needed to Close $241,075

Cash Down $ 2,255

First Mortgage $166,503

Renaissance Credit Second Mortgage $ 72,317

*Income: Family Size of 4 = $64,000

(Presumed Interest Rate: 4.75%/30 years, no mortgage insurance)

RENAISSANCE SQUARE BUYER PROFILE

• 26 CONTRACTS

• 19 SETTLEMENTS

LOW HIGH MEDIAN

INCOME $39,000 $200,000 $67,000

HH SIZE 1 4 2.6

EMPLOYER PUBLIC = 62%

PRIVATE = 38%

RENAISSANCE SQUARE

2005

• Land Costs

• Construction Costs

• Skyrocketing Pricing

2010

• Market, Market, Market!

• Credit Scores/Eligibility

• Financing

WORKFORCE HOUSING CHALLENGES