REQUEST FOR INFORMATION16-023

AFFORDABLE HOUSING DEVELOPMENT

Community ServicesCommunity Development Division

January 28, 2016

Consolidated Plan• Identified Rental Housing as a High Priority for the

following population:– Extremely Low & Low Income– Families with Children– Elderly & Frail Elderly– Public Housing Residents– Individuals– Persons with Physical & Developmental Disabilities

Consolidated Plan• Goal Description: Ensuring adequate rental housing

opportunities for low-income families and individuals through the provision and sustainability of decent housing by encouraging the following type of projects:– Rental Housing Rehabilitation– Rental Housing Construction– Rental/Owner Housing Code Enforcement– Homelessness Prevention – TBRA Security Deposits

Area Median Income LimitsHousehold Size

Income Limit

30% AMI 60% AMI 80% AMI

1 $12,800 $25,620 $34,1002 $14,600 $29,280 $39,0003 $16,450 $32,940 $43,8504 $18,250 $36,540 $48,7005 $19,750 $39,480 $52,6006 $21,200 $42,420 $60,4007 $22,650 $45,360 $64,300

8 $24,100 $48,240 $64,300

Examples• Individual working full-time making $12/hour

earns $24,960 annually/$2,080 monthly: 30% - 60% AMI• Family of 4 with 2 working adults making $10/hour

earns $41,600 annually/$3,467 monthly: 60% – 80% AMI• Elderly individually receiving average Social Security

benefit of $1,341/mo: 30% - 60% AMI

2012 Comprehensive Housing Affordability Strategy• 32,885 Households: 18,160 or 55% LMI• 13,080 Family Households: 4,365 or 33% LMI• 21,350 Renter Households: 16,080 or 75% LMI• Brazos County Level – age 62 or older:

– 12,425 Elderly Households: 4,730 or 38% LMI 1,600 LMI Renters 3,130 LMI Owners

Fair Housing Requirements• Prohibits discrimination in housing and lending based on several

protected classes– Race - Religion– Color - Sex– National Origin - Familial Status– Handicap (Disability)

• Exemptions include:− Owner-occupied buildings with no more than 4 units

− Single-family housing sold or rented without broker

− Housing operated by organizations and private clubs that limit occupancy to members

− Housing for Elderly (55 & Older)- Exempted

Current Conditions• Survey conducted in November and December of

90 apartment complexes in College StationRental Type Efficiency 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms 5 Bedrooms

Number of Available Units

9 22 24 5 12 4

Average Reported Rent

$622 $761 $933 $1,429 $2,135 $3,265

HUD Fair Market Rent $647 $651 $803 $1,161 $1,399 $1,601

* Does not indicate number of rooms available for rent in a unit with other rooms are leased. Common practice to cater toward the large student population.

Examples• Individual working full-time making $12/hour

earns $24,960 annually/$2,080 monthly: $624 housing exp• Working family of 4 with 2 working adults making

$10/hr earns $41,600 annually/$3,467, monthly:• $1,040 housing exp.• Elderly individually receiving average Social Security

benefit of $1,341/mo: $402 housing exp

Current ConditionsRental Type Efficiency 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms 5 Bedrooms

Number of Available Units

9 22 24 5 12 4

Average Reported Rent

$622 $761 $933 $1,429 $2,135 $3,265

HUD Fair Market Rent $647 $651 $803 $1,161 $1,399 $1,601

• Examples:– Individual: $624 housing exp– Family of 4: $1,040 housing exp.– Elderly individual: $402 housing exp

Current Conditions• Affordable & Workforce Housing InventoryComplex Restriction Source of

Funding/YearTotal Units LMI Units Waiting List

Heritage LMI LIHTC – 1999 96 96 36

Haven Homeless LIHTC – 2000 24 24 6

Santour Court LMI LIHTC – 2007 16 16 50*

Windsor Point(No LURA)

Transitioning to student property

LIHTC – 1994 192 0 0

Southgate Village (Site based – No LURA)

LMI LIHTC – 2001 200 199 1 BR: 1-2 yrs2-4BR: 1-3 mo

Villas of Rock Prairie Elderly LIHTC – 1994 132 92 100*

Terrace Pines Elderly LIHTC – 2004 100 80 8*

LULAC Oak Hill (Section 202)

Elderly/Disabled Section 202 50 50 8*

* Managers state that it takes months and sometimes years for units to become available

Housing Choice Voucher Program• Program funded by U. S. Department of Housing and

Urban Development• Provide rental assistance payments for households at or

below 60% of area median income (AMI)• Minimum of 75% reserved for households below 30% of

AMI• Authorized to issue up to 1,901 voucher each month for

the 7 county region• Average approximately 1,602 or 84% of this number due

to high rental costs

Economic Outlook Conference• Dr. Jim Gaines from the Texas Real Estate Center• Stated that housing affordability is a major issue• Household numbers are increasing – majority of which are

Millennials - tend to rent instead of buy• Average sales price in College Station increased by 10% to

$186,300 • A family of 4 at 80% AMI earning no more than $48,700

could potentially qualify for a mortgage of $146,100• There are currently 3 houses and 6 townhome/condos

listed for sale in College Station at $146,100 or less

RFI Background • Current conditions and rental inventory support increased

efforts in expanding affordable housing opportunities for all LMI populations• Inquiries beginning in June regarding potential support of tax

credit applications for College Station• Tax credit allocation process changed preferences, thereby

increasing interest in CS developments• Late adoption by Governor of tax credit process • High cost for developer to respond to RFP/submit application• Decision to release Request for Information

Purpose• The purpose of this RFI was to solicit information

from firms interested and qualified to develop an affordable elderly or family development within the City.

Responses• 4 proposals received

– MGroup – Pre-application submitted, seeking support from Council

– Casa Linda – Pre-application submitted, will not proceed– Prestwick Companies – No Pre-application– KG Residential – No Pre-application

Proposed Development – Huntington at College Station

Proposed Development – Huntington at College Station

Project Proposal• The Huntington at College Station

– Estimated $18 million investment– Mixed-income elderly affordable housing development– 148 units – one & two bedroom luxury apartment homes

for adults 55+ 84 one bedroom 20 one bedroom with study 44 two bedroom

– 105 affordable, 43 market rate– Rental range - $350 to $1,200 per month– Commitment to Green Building and LEED Certified

Project Proposal• Amenities

– Exceptional interior with Pergo wood flooring, custom cabinetry, open and spacious floor plans.

– Controlled access gates– Outdoor pool– Executive business center– Home health room– Clubhouse– Fitness center, beauty shop, onsite laundry– Transportation– Handicapped accessibility– Etc.

Mgroup Holdings, Inc.• Mark Musemeche, A.I.A.

– 25 years Architecture and real estate development experience

– Owns & operates 2,800 units in 25 communities in Texas– Originated and sold over $195 million in low income

housing tax credits– In house integrated Architecture, development, design

and construction – Business model to build, own and operate for 20+ years– Based in Houston

Basic Tax Credit Process• 9% Tax Credits allocated by Texas Department of

Housing and Community Affairs – funds from HUD• Competitive Process – Region 8• Qualified Allocation Plan (QAP) sets parameters and

point structure• Tax Credit award – generates capital for

construction

Basic Tax Credit Process• Pre-application Information – Due January 8th

– Development Name & Proposed Entity Name & Type– Target Population– Development Address, City, Zip, County, Region &

designation– Census Tract– # of Low Income/# Market Rate/# of Total Units– Notifications to Public Officials– Self Score

Basic Tax Credit Process• Full Application – Due March 1st

– Administrative– Development Site– Development Activities– Finance– Organization– Third Party– Community Input

Basic Tax Credit ProcessTimeline

January 8th: Pre-applications due March 1st: Application dueMarch – June: Public Hearings, ChallengesJuly: Final Recommendations by TDHCA BoardSpring 2017: Construction begins

HOME Funding Available• The FY 2016 Annual Action Plan and budget allocated

$240,000 in HOME funds for supporting development partners interested in development affordable/workforce housing: – HTC project– Habitat for Humanity– Elder Aid– Brazos Valley Community Action Agency

Staff Recommendation• Staff recommends that Council adopt a resolution of

support for the MGroup, Inc. HTC application for the 2016 competitive 9% housing tax credit application process to maximize the opportunity for an award in College Station.• Strengthen the application by providing $100,000 in HOME

funds

Future Research• Staff is currently researching available funding mechanisms to expand

affordable housing opportunities:– CDBG/HOME Funds– Developing relationships with other organizations with access to sources of

funds– HOME and/or CDBG funds– HTC – 9% or 4%– Section 108 Loans– Others

• Bush School class will conduct a special project this spring to assist staff with this effort

• Information will be presented to Council at a future date for consideration