Appendix C: Existing Revenue Sources for Affordable Housing

Transcription

1 Appendix C: Existing Revenue Sources for Affordable Housing City of Richmond, Virginia November 6, 2014

2 Appendix C: Existing Revenue Sources for Affordable Housing PREPARED FOR: Economic Development and Planning City of Richmond, Virginia 900 East Broad Street Richmond, Virginia PREPARED BY: David Paul Rosen & Associates 1330 Broadway, Suite 937 Oakland, CA Fax Hendrix Street Irvine, CA Fax Current Resources for Affordable Housing

3 Table of Contents 1. Federal Grants Administered by the City of Richmond (Table 1) City of Richmond Local Funds for Housing (Table 2) Richmond Redevelopment Housing Authority Resources (RRHA) (Table 3) Virginia Housing Development Authority (VHDA) Low Income Housing Tax Credits (LIHTC) (Table 4) Private Activity Volume Cap (Table 5) List of Tables 1. Federal Grant Programs Administered by City of Richmond City of Richmond Local Funds Richmond Redevelopment & Housing Authority (RRHA) VHDA Low Income Housing Tax Credits (LIHTC) Private Activity Bond Allocations... 7 Current Resources for Affordable Housing

4 The summaries below describe affordable housing resources currently available to the City of Richmond from federal, state and local housing programs. We have organized this information into 5 tables. 1. Federal Grants Administered by the City of Richmond (Table 1) Federal programs administered by the City include Community Development Block Grants (CDBG) inclusive of Section 108, Home Investment Partnership (HOME), Housing Opportunities for Persons with AIDS (HOPWA), Emergency Shelter Grants (ESG), and the Neighborhood Stabilization Program (NSP). Section 108 is the loan guarantee provision of the CDBG program. Section 108 provides localities with a source of financing for CDBG eligible activities by allowing them to borrow against future CDBG entitlements. As the City uses its CDBG funding for a variety of community development activities in addition to housing, we have provided a CDBG activity summary from FY 2012 (the latest year available), showing that 24 percent ($599,530) of total CDBG funds allocated by the City in 2012 supported housing-related activities. In 2010 and 2011, housing s share of the City s CDBG funding was 51 percent and 39 percent respectively, ($3,132,477 and $1,987,605). The City reports having $20 million in Section 108 borrowing authority, comprised of a $9.875 million Business Loan Pool and a $ million Economic Development & Housing Loan Pool. The Business Loan Pool, which currently has no outstanding loans, cannot be used for affordable housing. The Economic Development & Housing Loan Pool is fully committed to projects that will close in 2015: $7.5 million for permanent financing and $2.625 million for construction loans with maturities of up to 36 months. The data on federal funding reported below are from the City s 2015 Biennial Fiscal Plan. We have also reported allocation amounts provided by HUD (in italics), which are different than the amounts shown in the fiscal plan. The Fiscal Plan does not provide information on federal Program Income or HOME program match. Program Income consists of Current Resources for Affordable Housing 1

5 interest and principal payments (including loan repayments) on loans funded by the City from the proceeds of federal housing and community development programs such as HOME and CDBG. Federal program regulations typically treat Program Income as program funds, subjecting Program Income to the same rules that apply to the program that served as the original source of funding. Program Income can be significant if an owner repays all or a portion of an existing HOME or CDBG loan in connection with a sale or senior loan refinancing. 2. City of Richmond Local Funds for Housing (Table 2) [The only reported local funding for housing is the Housing Trust Fund.]. [The City will confirm that the line item ($1,000,000) in the 2015 Fiscal Plan Affordable Housing Non CDBG Areas is, in fact, the Trust Fund, and the source of money, e.g., General Fund] 3. Richmond Redevelopment Housing Authority Resources (RRHA) (Table 3) Table 3 summarizes RRHA resources. In addition to the information detailed in Table 3, RRHA received a Rental Assistance Demonstration (RAD) award to convert Fay Towers, a 200-unit Public Housing development constructed in 1971, into Section 8 housing, and to renovate or replace the entire development. RRHA and the City of Richmond secured a HOPE VI grant of $26.9 million from HUD in 1997 to revitalize Richmond's Blackwell community. 4. Virginia Housing Development Authority (VHDA) Low Income Housing Tax Credits (LIHTC) (Table 4) Table 4 reviews 9 percent and 4 percent Low Income Housing Tax Credit (LIHTC) activity in Richmond, detailing the number of LIHTC projects placed in service in Richmond since the inception of the LIHTC program, and the number of LIHTC projects placed in service each year from 2009 through Table 4 also notes VHDA s estimated 2014 statewide 9 percent LIHTC allocation. Since the inception of the LIHTC program, approximately 54 developments receiving 9 percent LIHTCs have been placed in service in Richmond and approximately 20 developments receiving 4 percent LIHTCs have been placed in service, comprising 7,407 total units and 7,208 affordable units. Current Resources for Affordable Housing 2

6 For the period 2009 through 2013, 17 developments receiving 9 percent LIHTCs have been placed in service in Richmond and 5 developments receiving 4 percent LIHTCs have been placed in service, for a total of 1,783 total units, and 1,751 affordable units. VHDA divides its 9 percent LIHTC allocation into several pools, including a nonprofit pool (15 percent of the allocation), a local housing authority (LHA) pool (15 percent of the allocation), and five regional pools. Richmond is in the Richmond MSA pool, which is comprised of twenty counties and cities and receives 11.6 percent of VHDA s allocation. (The pool allocations indicated above are enumerated in VHDA's 2014 Qualified Allocation Plan (QAP) and are subject to change year-to-year in accordance with the terms of future QAPs.) In order to qualify for the LHA pool, a development must be sponsored by a local housing authority (or an industrial development authority if the locality does not have a local housing authority), as sole general partner or managing member (either directly or through a wholly owned subsidiary) or as landlord or seller of the land to a tax credit developer. VHDA does not count an award under the LHA pool as an award under the geographic pool in which the LHA project is located. The LHA pool was oversubscribed in 2013 and 2014 and, according the VHDA staff, competition within the LHA pool is high. 5. Private Activity Volume Cap (Table 5). Table 5 summarizes private activity volume cap allocations and utilization statewide between 2010 and While VHDA receives 43 percent of the State s allocation by statutory formula, it typically collects additional volume cap from other issuers in the state that have not used their statutory allocations. While VHDA has not provided information on forfeited cap, it is apparent from Table 5 that Virginia, like other states, has unused volume, chiefly because of the absence of demand from single family mortgage revenue bond programs. Current Resources for Affordable Housing 3

7 Richmond Affordable Housing Resources Table 1- Federal Grant Programs Administered by City of Richmond Proposed HOME-Fiscal Plan 2,266,727 1,993, ,045 1,103,415 HOME-HUD 1,073,661 1,186,468 1,229,168 NA HOPWA-Fiscal Plan 797, , ,368 1,078,026 HOPWA-HUD 864,491 1,159,168 1,087,373 NA NSP-Fiscal Plan 444, ,332 2,300,000 2,300,000 NSP-HUD NA NA NA NA ESG-Fiscal Plan 215, , , ,311 ESG-HUD 380, , ,193 NA CDBG-Fiscal Plan 4,838,031 2,763,428 2,936,031 3,974,572 CDBG-HUD 3,914,708 4,273,733 4,200,532 NA CDBG Activities (2012) Type of Activity (2012) Expenditure Percentage Acquisition 29, Economic Development 319, Housing 599, Public Services 419, General Administration 656, and Planning Repayment of Section 451, Loans Total 2,476, Sources: 2015 Biennial Fiscal Plan. HUD Allocations: CPD Allocations and Awards (HUD Website). CDBG Activities: HUD CDBG Performance Profiles (HUD Website). Current Resources for Affordable Housing 4

8 Table 2 - City of Richmond Local Funds Proposed Affordable Housing Non CDBG Areas ,000 1,000,000 Source: 2015 Biennial Fiscal Plan. Table 3 - Richmond Redevelopment & Housing Authority (RRHA) Housing Choice Vouchers $25,837,168, 3,000 units Public Housing 4,000 units, 19 developments Operating Subsidy $21,321,722 HUD Capital Grant $7,757,342 Replacement Housing Factor $1,296,437 HOPE VI $2,480,000 Tenant Rents/other $9,593,129 Source: RRHA Annual 2012 / 2013 Report. Current Resources for Affordable Housing 5

9 Table 4 - VHDA Low Income Housing Tax Credits (LIHTC) 2014 Estimated Statewide LIHTC Allocation $18,998,931 Richmond LIHTCs Placed In Service: 1987 to 2013 Year/Type Projects Total Units Affordable Units Since Inception 9% 54 4,914 4,911 4% 20 2,493 2,297 Total Since Inception 74 7,407 7, % % Total % % Total % % Total % % Total % % Total Source: VHDA Tax Credit Property listing, updated January 3, Current Resources for Affordable Housing 6

10 Table Private Activity Bond Allocations (Millions) Virginia Allocation VHDA Allocation * VHDA Multifamily Use VHDA Single Family Use * Only the statutory 43% until fall-out and carry-forwards are determined at year-end. Source: Virginia Department of Housing and Community Development, Allocation of 2014 Ceiling for Private Activity Bonds. Current Resources for Affordable Housing 7