Providence District Council

Jim EdmondsonMember, E&G Group, LLC

President, AHOME

Questions to address regarding affordable housing…

•What is it?

•What is the need in Fairfax?

•How does it get built/financed?

•What does it look like?

•What does the County need to do about it?

•What is affordable housing?

Public Housing

Private “market-rate” affordable

Subsidized rental housing (Section 8 or vouchers)

Low-Income Housing Tax Credits (LIHTCs)

Workforce housing

Variations

• Special needs such as group homes• Homeless shelters• Domestic violence victims

Others:

•What is the need in Fairfax?

• Changing pattern of job growth• Lower median income• Changing housing preferences• Other

CRA at GMU is reliable source

• Need more apartments and rental• Need ToD

Implication

• Tens of thousands of units over the next 20 years• Large portion need rents of less than $1,250 - $1,500 per month

CRA

•What is the need in Fairfax?

• Changing pattern of job growth• Lower median income• Changing housing preferences• Other

CRA at GMU is reliable source

• Need more apartments and rental• Need ToD

Implication

• Tens of thousands of units over the next 20 years• Large portion need rents of less than $1,250 - $1,500 per month

CRA

•How does affordable housing get financed and built?

Can’t expect market forces to do it

• See example on next slide

Let’s look at a capital structure for real apartment project

LIHTCs and tax exempt bonds

Must have “gap” financing, or soft loans from County

ADUs?

•A real affordable housing project made possible by DC HPTF

• 116 Units, all LIHTC eligible (household incomes of $40,000 to $65.000)• 20 special needs apartments with rental subsidies from DCHA• 2 service providers – N Street Village and LAYC• Land owned by H Street CDC sold to development entity• HSDC as managing member (project helped by R.E. Tax Exemption)• E&G as primary developer

2321 4th Street NE

Land $ 3,000,000 10.0%

Construction incld contingency $18,858,870 62.6%

Design $950,000 3.2%

Financing (assuming bonds and 4% LIHTCs) $2,213,095 7.3%

Other soft costs $1,554,000 5.2%

Developer Fees $2,500,000 8.3%

Reserves $1,069,905 3.5%

TOTAL DEVELOPMENT COSTS $30,145,870$259,878

TOT/Unit

Tax Credit Equity $ 9,813,144 32.5%

Perm Debt $10,500,000 34.7%

Deferred Fee $800,000 2.6%

DHCD $7,500,000 24.8%

NOI $615,676 2.0%

Seller Note $1,000,000 3.3%

TOTAL SOURCE OF FUNDS $30,228,819

Surplus $82,950

•How does affordable housing get financed and built?

Can’t exceed market forces to do it

• See example on next slide

Let’s look at a capital structure for real apartment project

LIHTCs and tax exempt bonds

Must have “gap” financing, or soft loans from County

ADUs?

•What does affordable housing look like?

• Fairfax County• 284 Units• Built in 1950• “Market rate affordable” – old garden apartments

Seven Corners

•What does affordable housing look like?

• Washington, DC• 549 Units• Built in 1962• LIHTC – middle aged garden apartments

Ft Chaplin Park

•What does affordable housing look like?

• Washington, DC• ~300 Units• Elevators & ToD

Minnesota Ave Metro

•What does affordable housing look like?

2321 4th Street (Rendering)

• Washington, DC• To be built starting next month

•What does the County need to do about it?

Economic development strategy

Let’s look at County’s workforce housing table

Housing blueprint/Homelessness prevention

•Place making/Redevelopment

•Transportation

•Affordable Housing

•Workforce Development

•Development Process Improvements

•Demographic Changes (Respond to Aging Population, Social Equity, Millennials)

•Innovation Support & Small Business Support

•Healthy Communities (Support policies to create a healthier population/community)

•Communication (Encourage more community engagement & participation)

•Diversify the Economy

•What does the County need to do about it?

Economic development strategy

Let’s look at County’s workforce housing table

Housing blueprint/Homelessness prevention

•Fairfax Workforce Housing Table

Income Tiers for Affordable Housing

Up to 120% of AMI 2% of total units

Up to 100% of AMI 3% of total units

Up to 80% of AMI 5% of total units

Up to 70% of AMI 3% of total units

Up to 60% of AMI 2% of total units

•What does the County need to do about it?

Make it part of economic development strategy

Provide meaningful funding to get units built

Tweak the ADU ordinance

Define the term, and set and meet goals

Use revenue bonds generously