RESILIENT + AFFORDABLE MULTI-FAMILY HOUSING. Addressing roadblocks and opportunities in pursuit of social resilience

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1 RESILIENT + AFFORDABLE MULTI-FAMILY HOUSING Addressing roadblocks and opportunities in pursuit of social resilience

2 Context: CENTRAL CITY CONCERN -- OVERVIEW Founded in Providing comprehensive solutions to ending homelessness and achieving self-sufficiency. Serving over 15,000 extremely low-income and homeless people annually. Average client income at move-in: $6,700/year Average age of portfolio: 1933

3 Context: CCC CONTINUUM OF CARE affordable housing employment services Homelessness Addictions Mental Illness Chronic Health Trauma No health insurance Unemployment medical care drug & alcohol treatment

4 Why are people homeless? Individual Factors Poverty Early childhood adverse experiences Mental health and substance use disorders Personal history of violence Criminal justice system interaction Youth: family conflict and victimizations, nonheterosexual sexual identify, having been in the childhood welfare system Structural Factors* Absence of low-cost housing Absence of employment opportunities for low-skilled workers Absence of income support Changes in mental health approaches HOMELESSNESS *When structural support is not available, individuals with fewer individual vulnerabilities become homeless and rates of homelessness rise Fazel et al Lancet 2014

5 Structural: Loss of Affordable Housing and Stagnant Incomes Loss of 3 million low income housing units nationally between 1970 and 2000 Including a loss of 2 million Single Room Occupancy SRO units Representing lowest barrier housing available (housing of last resort) Chicago lost 95% of its SRO stock NY lost 90% Portland lost 70% LA lost 60% San Francisco lost 50%

6 The Portland Housing Market

7 Portland s Affordability Crisis Average 1BD rent in Portland: $1,430 Average monthly rent of new construction: $1,954 Total # units under development or construction: 13,434 Estimated % that will be permanently affordable for someone making $30,000: 4.8% An additional ~5% will be affordable for 10 years under MULTE program Estimated % that will be affordable for someone making minimum wage or less:.05%

8 Context: A DIVERSE HOUSING PORTFOLIO

9 01 Operations: THE REAL COST OF AFFORDABLE

10 WHY THE CONCERN? Rents are restricted based on MFI ANNUAL INCOME & EXPENSES NEGATIVE CASH FLOW INCOME OPERATING EXPENSES POSITIVE CASH FLOW TIME

11 THE COST OF UPKEEP: Total Identified 10YR CAP Needs: Projected 10YR Asset Repl. Balance: $9,913,888 $4,956,944

12 INVESTMENT LIFE CYCLE Concept Development Tax Credit Application and Allocation Syndication (Investment) Development Housing Operation End of Limited Partnership Investment (Yr. 15) Rehabilitation/Investment (Yr )

13 02 Case Study: The Henry Preservation Project Some Basic Facts: Built in 1909 (On Historic Registry) Un-Reinforced Masonry with Flexible Wood Diaphragms 6 Stories + Basement 153 Units Gross Sq.Ft: 62,782

14 THE HENRY BUILDING Unit Type and Population Mix 153 Single Room Occupancy Units 50 Units for homeless veterans 35 Units for chronic utilizers of emergency medical services 31 Units for high risk offenders exiting Multnomah County Corrections HOMELESS VETERANS CRIMINAL BACKGROUND MEDICALLY FRAGILE 37 Units available to Portland s hardest to house populations (first-come, first serve)

15 THE HENRY BUILDING Capital Reserves vs Capital Needs: Annual (Avg) Cash Flow: $17,200 $2.7 M Capital Needs / Preservation Scope Storefront and Brick Facade Restoration Fire Life Safety Upgrades Window Replacement Common Area and Unit Finish Upgrades Replacement of HVAC, Electrical and Plumbing Systems 4M Henry 5 Year Picture 3M 2M $2.7 M 5 Year Capital Needs 1M 0 $570K $86K Asset Reserves Bldg Cash Flow

16 THE HENRY BUILDING Seismic Deficiencies 1 URM Walls with Wood Framed Floor and Roof 2 Weak Story/Soft Story at Retail Level 3 Vertical Discontinuities 4 Wall Anchorage

17 THE HENRY BUILDING Funding vs Cost of Partial Seismic: 25M 20M 15M 10M $7.9 M Funding Gap $8.6 M $5.9 M Partial Seismic Rehab 5M 0 $656K Cash Flow +Reserves $2.7 M 5 Year Capital Needs

18 THE HENRY BUILDING Funding vs Cost of Full Seismic: 25M 20M 15M $15.4 M Funding Gap $16.1 M $13.4 M Full Seismic Rehab 10M 5M 0 $656K Cash Flow +Reserves $2.7 M 5 Year Capital Needs

19 THE HENRY BUILDING Cost of Seismic: 25M 11% Soft Costs $1.8 M 20M 15M $16.1 M $653 K $585 K $560 K $8.5 M General Development Costs Architectural + Engineering Fees Tenant Relocation Construction - Seismic Rehab 89% Hard Costs $14.3 M 10M 5M 0 $2.7 M $1.3 M $1.8 M Construction - Capital Needs / Preservation Rehab Contingency General Conditions + Overhead/Profit

20 THE HENRY BUILDING Cost of Seismic: 25M 20M 15M $16.1 M $653 K $585 K $560 K Tenant Relocation $560 K 10M $8.5 M Seismic / Structural Scope $66/sq.ft. $28k/unit $4.2 M Interior Scope Triggered by Seismic $68/sq.ft. $28.6k/unit $4.3 M 5M 0 $2.7 M $1.3 M $1.8 M TOTAL: $9 M

21 THE HENRY BUILDING Cost of Seismic: Construction $4.2 M Seismic / Structural Scope Continuous Concrete Shear Walls on All Floors Floor Sheathing Replacement Steel Columns + Strongbacks to Anchor URM Bracing for E-Power, Equipment and Lights Roof Replacement + Parapet Bracing $4.3 M Interior Scope Triggered by Seismic Demolition and Replacement of all Doors, Floor Finishes, and Casework in 153 Units Re-build Finishes, Casework and Fixtures in Common Area Bathrooms and in Hallways Gypsum/Plaster Patch and Repair on Residential Floors

22 THE HENRY BUILDING Cost of Seismic: Relocation Shortage of Alternate Housing (3% Vacancy Rate) High Barrier, At-Risk Population Extremely High Costs Full Scope of Relocation: $560,000 Rent Loss: $310, Units vacant at a time for 19 months Hotel: $37, Units for (2) Weeks Transit Passes: $2,025 5 day passes for persons who walk Moving Labor: $102,860 $500 per Unit Packing Material: $7,500 Volume for SRO Room Size Relocation Planning: $15,000 Res. Documentation and Logistics Onsite Coordinator: $75,816 On-site Coordinator, $18/hr FTE 16 months Subtotal $551,596 Contingency: $8,404 TOTAL: $560,000

23 SUMMARY: Affordable housing is part of the public benefit infrastructure Affordable housing relies on periodic public support to operate over the long term Any URM policy should take these factors into consideration, and ensure that the policy is not putting community affordability at risk POSSIBLE SOLUTIONS: Carve out affordable housing projects from this requirement that have a long term preservation agreement with PHB Provide for an incremental seismic approach through the permitting process and extend the compliance period beyond 20 years

24 thank Sean Hubert Chief Housing and Employment Officer Central City Concern you