NSP Problem Solving Clinic 2012 Troubleshooting Program Implementation Issues

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Damian Watkins
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1 U.S. Department of Housing and Urban Development Community Planning and Development NSP Problem Solving Clinic 2012 Troubleshooting Program Implementation Issues

2 Purpose Our Focus Today: Key Challenges to Program Implementation Interactive Case Studies & Discussion

3 Top Concerns? What are your top challenges in implementation at home?

4 Top Concerns? Subrecipient / Developer Roles What are your top challenges in implementation at home? The Data

5 The Market Challenge Round 1 5

6 Do We Understand the Market? Why can t we find properties to buy Competition Low inventory No cooperation from sellers Out of the price range Target area too small

7 Do We Understand the Market? Why won t properties sell? No qualified buyers Neighborhood condition Type of property Sales price Affordability period and lien requirements

8 How Can We Sell or Rent Units? What can we do to enhance sales? Cut the price Add amenities Use a realtor Market, market, market Identify partners

9 Other Strategies to Occupy Units Lease purchase Conversion to Rental Project Based Subsidies

10 Program Redesign Challenge Round 2 10

11 Does My Program Need to Change? What Problem was my Program Designed to address Neighborhood decline due to foreclosed or abandoned single family homes? Neighborhood decline due to foreclosed or abandoned multi-family developments? Neighborhood decline due to foreclosed/abandoned subdivisions?

12 Activities And Goals Acquisition/substantial rehab/resale Acquisition/minor-moderate rehab/resale Acquisition/rehab/rental Acquisition/rehab/lease purchase Metrics Time Frame

13 Are We Meeting Our Goals? If not why? Lack of eligible properties? Lack of creditworthy buyers? NSP Problem Solving Clinic 2012 Are neighborhood conditions/reputation limiting my target market? Incomes too low/price point too high? Subsidy too low Limited Availability of Permanent Financing Rental developments won t cash flow Competition from Investors

14 Are We Meeting our Goals Under Performing Partners -It s not me, it s you Undercapitalized Understaffed Inadequate Specs leading to unexpected expenses Unfamiliarity with the business line

15 The Subrecipient/Developer Quandary Challenge Round 3 15

16 Is my Partner a Subrecipient or a Developer? Who s on my team? Subrecipient- Services to families Management of programs Management of housing units Developer- Building/acquiring/rehabbing units

17 What are the Differences? Key Points to be aware of: Program Income vs. Program Proceeds Administrative Costs vs. Developer s fees Program Delivery Costs Procurement

18 Where Do I Get my Data Challenge Round 4 18

19 Data Based Decisions Prior to making changes, it is important to know what needs to be changed Collecting and reviewing data increases the chances that program changes will be successful

20 Data Needed and Likely Sources Market Appraisers/ Market Studies Maximum Gross Rent vs. Actual Gross Rent All Units 2011 Maximum Actual Total Unit Type Gross Rent Gross Rent Reported 1 BR $738 $ BR $904 $ BR $1,047 $ BR $1,156 $1,

21 Data Needed and Likely Sources (Continued) Market Realtors Homebuyer Counselors Law Enforcement Reports Program Design Nonprofit Partners Lenders Technical Assistance Providers NSP Problem Solving Clinic 2012

- 1 - Neighborhood Stabilization Program Information Summary Sheet

- 1 - Neighborhood Stabilization Program Information Summary Sheet Eligible Uses: Purchase and rehab abandoned or foreclosed homes and residential properties. Establishing financing mechanisms for purchase