affordable and senior housing
TRANSCRIPT
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Affordable & Senior Housing
Presented By:
Kurt Muchow, Community Development Consultant
v i s i o n t o r e a l i t y
League of Wisconsin Municipalities2014 Annual Conference
October 16, 2014
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Presentation Outline
• What is Affordable
Housing?
• Why is it important?
• Define the Problem
• Barriers to Affordable
Housing
• Community Best
Practices
• Example Projects
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What is Affordable Housing?
• Housing Costs (including mortgage or rent payments & utilities)
should not exceed 30% of the total household income.
• For example:
- 2012 Wisconsin Median Household Income = $ 52,627
- Allowable Housing Cost ($52,627 x 30%) = $ 1,315 / month
- 80% of Median Income (Moderate Income) = $ 42,100
- Allowable Housing Cost ($42,100 x 30%) = $ 1,052 / month
- 50% of Median Income (Low Income) = $ 26,313
- Allowable Housing Cost ($26,313 x 30%) = $ 658 / month
- 30% of Median Income (Very Low Income) = $ 15,788
- Allowable Housing Cost ($15,788 x 30%) = $ 395 / month
Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
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Why Is It Important?
Community Development Program
Housing
Economic
Development
Public
Facilities
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Why Is It Important?
Lack of affordable housing impacts both
communities & individual households!
• For Communities: attracting & retaining
employment opportunities, providing an
adequate quality of life for residents &
maintaining quality neighborhoods.
• For Households: self sufficiency, stability &
decent safe and sanitary housing.
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Define the Problem
•Wisconsin Population vs. Income
Income Level No. of Households % of all Households
Moderate Income (50% to 80% of median) 427,958 households 19.23%
Low Income (30% to 50% of median) 302,552 households 13.59%
Very Low Income (0% to 30% of median) 347,130 households 15.60%
Total Very Low to Moderate Income 1,077,640 households 48.42%
Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
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Define the Problem
•Wisconsin Median Household Income vs.
Housing Occupancy vs. Allowable
Housing Cost
Owner-occupied Renter-occupied
Description All Households Households Households
Median Household Income $52,627 $66,241 $29,425
30% of Household Income $1,315 / month $1,656 / month $735 / month
*Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
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Define the Problem
• Wisconsin Household Income vs.
Housing Cost Greater Than 30%
% of Owner-Occupied Units % of Renter-Occupied Units
Household Income Paying More Than 30% Paying More than 30%
Less than $20,000 6.7% 27.1%
$20,000 to $34,999 6.6% 14.3%
$35,000 to $49,999 5.5% 3.1%
$50,000 to $74,999 5.6% 0.7%
$75,000 or more 3.2% 0.1%
Total 27.6% 45.3%
Source: U.S. Census Bureau, American Fact Finder, 2012 American Survey
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Define the Problem
• Single Family Home Affordability
Median Single Family Home Sale Prices (Wis. Realtors Association)
• 2007 = $ 162,900
• 2011 = $ 132,000
• 2014 (thru August) = $ 148,450
Cost for Median Single Family Home vs. Required Income 2007 2014
• Mortgage Payment (80% loan to value, 20 year term) $ 890 / mo $ 810 / mo
• Real estate Taxes $ 270 / mo $ 270 / mo
• Utilities (electric, sewer, water, heat) $ 230 / mo $ 230 / mo
• Total $1,390 / mo $1,310 / mo
• Min. household income to afford Median Priced Home $55,600 $ 52,400
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Define the Problem
• Multi- Family Affordability (Market Rate)
Typical Development Cost for new Multi-Family = $ 100,000 / unit
Housing Cost for Multi-Family vs. Required Income
• Mortgage Payment (80% loan to value, 20 year term) = $ 660 / month
• Real estate Taxes = $ 170 / month
• Utilities (electric, sewer, water, heat) = $ 190 / month
• Total = $ 1,020 / month
• Min. household income to afford Market Rate Apartment = $ 40,800
• Median Household Income for Renters in Wisconsin = $ 29,425
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Define the Problem
• Senior Housing
Aging Baby Boomers are Fueling Growth in the 65 and Older Population
• Population of Age 65 and Older Will Surge by 65% by 2030
• Increase in Life Expectancy is Greatly Expanding Population Over 75
• Creates a Significant Demand for Senior Housing
• Baby Boomers Hold More Than 70% of U.S. Financial Assets & Over
50% of Discretionary Spending
Types of Senior Housing
• Independent Living: (Lowest Cost)- Growth+
• Assisted Living: (Avg. Cost $4,180 / Month) – Growth ?
• Skilled Nursing: (Avg. Cost $275 / Day) – Declining
• Continuing Care Communities: – Growth
• Special Needs: Dementia
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Barriers to Affordable Housing
• Private Sector Impediments• Household Income:
- 48.42% of Wisconsin Households are Very Low Income to Moderate Income
- Median Household Income for Renters in Wisconsin = $29,425
• Lack of Equity for Down Payment & Financing Costs: Estimated 45% of Renters
Lack Required Equity to Purchase Home.
• Tougher Lending Criteria: Credit Scores, Employment History, Equity, etc.
• Rising Cost of Housing
• Lack of Affordable Housing that is Decent Safe & Sanitary
• Public Sector Impediments• Attitudes of the General Public – NIMBY
• Development Regulations – Zoning, Density, Infrastructure, Design Guidelines
• Development Costs – Infrastructure
• Local Fees -Taxes, Permit Fees, Impact Fees
• Lack of Public Funding
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Barriers to Affordable Housing
• Who Is Impacted the Most?• Low Income
• Single Women With Children
• Minorities
• Elderly
• But, Who Else is Impacted?• Teachers
• Police Officers
• Restaurant Staff
• Retail Employees
• Service Workers
• Factory Workers
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Community Best Practices
• Ways to Encourage Affordable Housing• Create Awareness – Make it a High Priority
• Update Local Development Regulations
• Utilize Good Land Use Practices
• Proactive Use of Public Funding
• Develop Public/Private Partnerships
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Community Best Practices
• Create Awareness – Make it a High Priority• Get the Facts and Educate the Public
• Involve Key Stakeholders
• Create & Adopt a Plan to Create Affordable Housing for
all Residents
• Encourage Fair Housing Opportunities
• Take a Leadership Role in Implementation
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Community Best Practices
• Update Local Development Regulations
• Update Zoning Ordinance – Density, Mixed-Use,
PUDs or Special Zoning Districts, etc.
• Update Development Regulations –
Infrastructure, Permit & Impact Fees, Parking, etc.
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Community Best Practices
• Alternate Infrastructure Design Standards
Standard Reduced Width
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Community Best Practices
• Utilize Good Land Use Practices
• Smart Growth & New Urbanism –
Development of Mixed-Use, Dense Town
Centers
• Infill Development – Restoration of Existing
Structures & Use of Vacant Land Within
Urbanized Areas
• Urban Redevelopment –
Acquisition/Demolition of Blighted Structures
& Develop New Residential
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Community Best Practices
• Proactive Use of Public Funding Programs
• Local Funded Programs – TIF, RLFs, Trust
Funds, etc.
• Intergovernmental Programs – Grants, Tax
Credits, Low Interest Loans, Subsidies, etc.
• Funding Agencies
- Wis. Dept. Of Admin. – Division of Housing
- WHEDA
- USDA Rural Development
- Wis. Dept. Of Health Services
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Community Best Practices
• Develop Public/Private Partnerships
• Local Development Corporations & Housing
Authorities – Collaborative Effort
• Regional Development Corporations &
Housing Authorities – Utilize Outside
Resources
• Partner With Developers & Landlords –
Facilitate and Incentivize
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Community Best Practices
• Benefits From Best Practices
• Reduces Land & Infrastructure Costs
• Eliminates Blight & Revitalizes Distressed
Neighborhoods
• Reduces Sprawl & Preserves Land
• Increases Tax Base
• Provides Affordable Decent, Safe & Sanitary
Housing
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Example Project #1 - Community-Wide Strategy
• Strategic Housing Program to Meet Community Needs & Goals
• Economic Development Plan Identified Needs
• High Percent of Elderly Over 65 Living in Their Own Home
• High Percentage of Workers are Age 55 or Older
• Local Employment is Projected to Increase 8% by 2020
• Business Survey - Lack of Workforce and Available Housing are Top Issues
• #1 Community Priority - Revitalize Central Business District
• Strategic Opportunities
• Create New Senior Apartments & Assisted Living Units
• Transition Single Family Owner Occupied Units from Senior to Families
• Creates Affordable Housing for Workforce to Fill Employment Opportunities
(Average Sale Price for existing Homes = $120,000)
• Increases Population in Existing Housing Stock
(Change 50 Units from 1.35 to 3.0 Persons per Household = 82 More Persons
• Helps to Address Business Workforce & Housing Issues
• Helps to Revitalize Central Business District
(Construct Senior Housing Facilities Adjacent to Downtown)
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Example Project #2 - WHEDA Section 42
Multi-Family & Urban Redevelopment
• Central Business District Redevelopment Project• Adjacent to Historic Downtown
• Blighted Properties
• Redevelopment District & Tax Increment District (TIF)
• Construction of New 48 Unit Senior Apartments
• Total Project Cost = $6 million, or $125,000 per Unit
• Financing: WHEDA Section 42 Tax Credits,
$940,000 CDBG & TIF Grants, and Private Financing
• Apartment Composition:
8 Units - Market Rate
8 Units – 30% - 40% of County Median Income
32 Units – 60% of County Median Income
• Lease Rate, Including utilities are Based on Household Size, Income and
Number of Bedrooms
1 Person @ 30% of CMI in One Bedroom Unit = $379 / Month
1 Person @ 60% of CMI in Two Bedroom Unit = $759 / Month
2 Persons @ 60% of CMI in Two Bedroom Unit = $910 / Month
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Example Project #3 - Urban Redevelopment
- Community Development Authority
• Urban Redevelopment in Residential Neighborhood• Project Designed to Eliminate Blight, Enhance
Neighborhood & Provide Needed Affordable
Housing.
• Community Lead Project – Owned & Developed
by CDA With TIF Assistance From City
• Mixed-Use: 7 Single Family, Two 4 – Unit
Apartments, Daycare Facility & Neighborhood
Park
• 100% of Acquisition, Demolition, Infrastructure &
Platting Costs Funded With TIF
• CDA Serving as Developer
• Revenue from Land Sales will Fund CDA Revolving Loan Fund
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Example Project #4 - High Density
Residential Development
• New Development For Affordable Workforce Housing• New Housing for the Workforce
• Public/Private Partnership
(City & Private Developer)
• City Created Special Zoning District
(Smaller Lots & Lower Cost Houses)
• Special Covenants to Address Quality
of Life Within Higher Density Subd.
• Private Developer Funded
• Reduced Housing Cost by 25%
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Example Project #5 - Senior Apartment
Building - Local Housing Authority
• New Senior Apartment Complex• Small Rural Community – Small Market
• Private Developers Not Interested
• Village Created Housing Authority
• Obtained Financing from Rural Development
• Constructed New 8 Unit Elderly Apartment Building
• Contracted With the County Housing Authority to Manage Facility
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Example Project #6 - Market Rate
Multi-Family With TIF Assistance
• Greenfield Development In Tax Increment District• Project Designed to Address Severe Housing Shortage
• Greenfield Site & Tax Increment District
• Total Project Cost = $6.3 million
• Financing: Private Financing & TIF To Bridge Financing Gap
• Apartment Composition:
40 Studio Apartments
40 One Bedroom Apartments
40 Two Bedroom Apartments
• Lease Rate, Including utilities
Studio Apartment = $ 495 / Month
One Bedroom Apartment = $ 725 / Month
Two bedroom Apartment = $825 / Month
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Example Project #7 – Assisted Living
• New Assisted Living Facility in Tax
Increment District
• Redevelopment Project
• 40 Unit Assisted Living
• Located in Tax Increment District
• Financing: Private Financing & TIF to Bridge
Financing Gap.
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Example Project #8 – Urban
Redevelopment Idle Industrial Site
• Mix Use Redevelopment• 20 Acres Site
• Adjacent to Downtown & River
• Proposed Uses
• 27 Bed Assisted Living (Incl. Memory Care)
• 24 Unit Affordable Housing (30%, 50%, & 60% of CMI)
• 64 Unit Market Rate Apartments
• Office Renovation – Office Space
• $19.9 Million Project Cost
• Funding: WEDC Idle Ind. Grant, TIF, Home
: Private Investment
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Questions & Answers
Kurt R. Muchow
Vierbicher Associates, Inc.
400 Viking Drive
Reedsburg, WI
(608) 768-4817
Email: [email protected]