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Assembling the Resources for Supportive Housing Minneapolis, June 7, 2012 1.

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Presentation on theme: "Assembling the Resources for Supportive Housing Minneapolis, June 7, 2012 1."— Presentation transcript:

1 Assembling the Resources for Supportive Housing Minneapolis, June 7, 2012 1

2 What Is Supportive Housing? A cost-effective combination of permanent, affordable housing with services that helps people live more stable, productive lives. 2

3 Models of Supportive Housing Single-Site, Single Purpose Single-Site, Integrated Clustered Scattered-Site Scattered-Site Set-Asides 3

4 SERV – Integrated Housing Bergenline Ave (Hudson County, NJ) and Boulevard East (Bergen County, NJ) – Each building has12 units that include 5 PSH units and 7 affordable units. Guttenberg (Hudson County, NJ) – 14 unit property that offers 6 PSH units and 8 affordable units. PSH units serve people with serious mental illness. All units serve people at 50% and below AMI.

5 Vision Drives Resource Development Mission Mandate Community and Individual Needs Agency Priorities Budget Drivers Choice of Population, There is Never Enough Supportive Housing to Serve Everyone 5

6 Developing a Supportive Housing Initiative  Can be confusing!  Not necessarily linear  No standard model  Tasks are interdependent  Multiple players 6

7 TWO: Feasibility ONE: Concept THREE: Dealmaking FOUR: Development FIVE: Operations Go? No Go? Go? No Go? Go? 7

8 8 Targeted Tenancy Services Operating Capital Development Budget Operating Budget Services Budget

9 A Typical Deal Capital – HOME/CDBG – Low Income Housing Tax Credits – Federal Home Loan Bank Operating – HUD McKinney – Section 8 Services Medicaid Philanthropy/Foundations Local Sources Specialized Partnership Services C Development Scattered-Site or Set-Aside 9

10 The First Leg: Capital C 10

11 To Build or Not to Build, That is the Question. Pros Long term project stability Take advantage of property assets; affordable housing market Building culture can be pro-social Exciting flagship Easier to offer onsite services Cons Minimum 3 year timeframe Development Requires a High Capacity Housing Partner Not In My Back Yard Concentration 11 C

12 Capital Builds the Box The costs of designing, purchasing, building or rehabilitating, and filling housing units with tenants. – Soft Costs: Consultant Fees, Architectural Drawings, Marketing Units, Appraisals, Legal Fees, Permits, and Studies – Hard Costs: Acquisition, Construction or Rehabilitation, and Offsite Improvements C 12

13 Capital Sources Capital funding is generally offered in the form of either: – A grant – A deferred loan (which operates as a grant for a specified period of time) – A low-interest loan – A Low-Income Housing Tax Credit Award providing investment equity 13

14 Castle Gardens, The Fortune Society Capital Sources NYS Housing Finance First Mortgage $3,600,000 NYS Housing Finance Second Mortgage $4,000,000 Federal Home Loan Bank Affordable Housing Program $1,500,000 NYS Office of Temporary and Disability Assistance, Homeless Housing Assistance Program $5,500,000 NYC Supportive Housing Loan Program (SHLP) $8,300,000 Mayor’s Fund $250,000 NY City Council $2,000,000 Borough President Capital Funds $1,000,000 NYS Energy Research Development Authority $239,390 Enterprise Green Communities $50,000 Low Income Housing Tax Credits$16,060,594 Deferred Developer Fee $ 1,000,000 Total $43,499,984 14 C

15 15 Sources & Uses  Schedule of Sources & Uses –Combines costs with the financing C

16 16 Sources of Financing Federal Sources: Federal Home Loan Bank Affordable Housing Program (AHP) ($750,000) HUD 811 & 202 C

17 17 Sources of Financing State Sources: Low-Income Housing Tax Credits (LIHTC) Indiana Development Fund or New York State Housing Assistance Program HOME and Community Development Block Grant (CDBG) Funds C

18 18 Sources of Financing County or Municipal Sources: HOME/CDBG Local Housing Trust Funds Tax Reaction/Scavenger Sale/donation of publicly- owned land (for acquisition) Tax Increment Financing Districts (TIFs) Empowerment Zones Enterprise Zones C

19 19 Low-Income Housing Tax Credits Eligibility is based on tenant income using HUD median income data, adjusted for family size Rent restrictions – below 60% of AMI Tax credits received over the first 10 years of operation, but compliance period is 15 Typically suited for projects of at least 20 units C

20 Key Concept: Housing Funding is Restricted to Housing 20

21 The Second Leg: Operating 21

22 Operating Pays the Bills The costs of operating and maintaining the housing, including all costs of maintaining the project once it is ready for occupancy: – Utilities – Maintenance Services – Insurance – Security – Debt Service or other Loan Payments – Operating and Replacement Reserves – (rent) 22

23 Relationship with the Development Budget O 23

24 24 Who Pays for Operating Support Sources that pay for costs of operating and/or maintaining the housing or physical component of supportive housing Who comprises the primary sources? – Federal - HUD – State – County/Municipal Again, depends on your TARGET POPULATION O

25 Sources Overview NameSourceDescription Shelter Plus Care HUD McKinney 5 or 10 yr project-based subsidies – homeless, disabled Supportive Housing Program HUD McKinney Funds leasing or operating costs – homeless, disabled Project Based Section 8 HUD and PHA Administered by state or local housing authority Section 811HUDFunds independent living facilities – could be used for sup hsg HUD VASHHUDFunds leasing and supportive services for homeless veterans O 25

26 26 HUD McKinney – Shelter Plus Care Rental assistance only eligible activity under SPC Funds provide the operating costs excluding services Target Population: Homeless and Disabled as defined by HUD Applicant must provide supportive services in an amount at least equal to the rental assistance provided during the term of the grant O

27 27 HUD – Shelter Plus Care New construction: 5-year initial grant Rehabilitation: 10-year initial grant Can be sponsor-based or project-based subsidies Must apply through the local Continuum of Care – Grants are large because must be for 5 or 10 years is there room in the Continuum? – Example: 15 unit, 1bd, SPC for 5 years = around $1 million dollars O

28 28 HUD – Supportive Housing Program Operations – HUD Regulation: Pay up to 75% of annual costs – Using other cash resources, make up difference between the total costs and the SHP grant Leasing – Can pay for up to 100% of annual leasing costs – With leasing, you cannot be the owner O

29 29 SHP Considerations SHP budgets do not allow for annual increases, even if your costs rise over time Continuums may have additional budget requirements Initial grant is typically for 2-3 years. Grants are renewed competitively on annual basis after initial award Grant is a direct grant with HUD Online: O

30 30 Continuum of Care Homeless Bonus Project Bonus allocated to Continuums on annual basis Must fund ONE permanent supportive housing project that serves homeless, disabled Equal 15% of Continuum’s pro-rata allocation In past, project had to be 80% housing and 20% services O

31 31 Bonus Project Considerations Good money if your project is located in Continuum with a decent size bonus Can fund leasing or operations Some Continuums are not able to use their bonus dollars due to lack of matching funds O

32 Key Concept: Get to know your Continuum of Care. 32

33 Tenant-Based Section 8 The typical scattered-site rental subsidy only program Can be challenging for tenants with special needs to navigate Specialized waiting lists can be set up by PHAs O 33

34 34 Project-Based Section 8 Project-Based voucher remains attached to the unit. Lesser known voucher component, and is optional for the PHA up to 20%. PHA attaches rent subsidy to a unit of rental housing through a contract with the owner that can last from 1 year to 15 years. O

35 Sponsor-Based Section 8 Newer process, similar to Shelter Plus Care administration where vouchers go to a sponsor agency Can be used to increase access for people in need of supportive services Available in Moving To Work sites Signals from HUD that they will review waiver requests for PSH related sponsor-basing O 35

36 36 Project-Based Section 8 Considerations PHA may have restrictions that exclude the population project intended to serve May require some education with PHA Section 8 certificates may be oversubscribed More info: O

37 37 Public Housing Units Also administered by the PHA, although there are sometimes different applications Barriers can be harder to negotiate Efficiencies sometimes have higher vacancy rates O

38 Key Concept: Get to know your PHA/Vouchering Agency. 38

39 State/Local Rental Assistance Does not necessarily have the same targeting as Federal rental assistance. May not have the same barriers related to CJ populations. O 39

40 40 Section 811 The Section 811 program allows persons with disabilities to live as independently as possible in the community by increasing the supply of rental housing with the availability of supportive services. Current RFP has changed the format providing only operating assistance and requiring a partnership with the Medicaid administering agency and focus on high cost recipients. O

41 Section 811 Considerations Announced through competitive process in the HUD SuperNOFA (notice of funding availability) Timeframe: Spring O 41

42 42 HUD HOPWA Program National dollars – Competitive SPNS dollars Local dollars – formula dollars funneled through Dept of Public Health or Dept of Housing Amount of funding varies by location Funding specific for HIV/AIDS population Funding can include rental assistance, however, grants are typically not for more than 2-4 years at one time O

43 43 Funding Restrictions to Consider As we discussed with services, public financing program rules can differ significantly by source Need to consider: – How does the source define homelessness? – Are their qualifying disabilities? – Are there barriers based on Criminal Justice or other restrictions? O

44 Key Concept: Operating stream may hide the need for capital funding. 44

45 The Third Leg: Services S 45

46 46 Develop a Service Plan You’ll use it to inform your Service Budget TARGET POPULATION Service Needs Services Program – Overview, Partners and Roles, Staffing, Outcomes Budget and Staffing Plan S

47 47 Common Approaches Contracts with funders for services to a set of eligible clients. Reimbursement agreement for certain services to eligible clients. Fixed fee for maintaining the health of individual clients. Grants that help cover service expenses. S

48 48 Budget Components (cont) Other expenses – Consultant/contractual services – Social/client services – Transportation – Staff training – Supplies & materials for services – General office supplies and support S

49 49 Federal Service Funding Significant portion of funding for services Some funding directly apply to feds – Continuum of Care (through local process) – Special request for proposals S

50 Federal Service Funding Majority of funding flow to local level – Alphabet Soup - TANF, Medicaid, SAMHSA, Dept of Ed, VA, DOL, SSA – Departments of Health & Human Services, Social Services, Education/Training, Employment, Workforce Investment Board, Schools S 50

51 51 Federal Sources to Consider HUD - McKinney Vento Programs – Through Continuum of Care – Typically limited % and part of larger request – Flexible funding HUD - HOPWA Program – National: Part of housing request – Local: Depends on local criteria – may be good source for HIV impacted client services S

52 52 Federal Sources to Consider HUD - CDBG Funding – Block grant to local jurisdictions – Check Consolidated Plan for Current Spending Priorities – Flexible dollars for services HHS – Health Related Funding – Ryan White service dollars go through local planning council – services for HIV+ – Advocacy for line item to fund services in supportive housing – Dollars distributed to local/state agencies S

53 53 Federal Sources to Consider Special RFPs – Programs through Dept of Agriculture, Education, Labor, Justice (SCA), Veterans Affairs, Social Security Admin. and Youth Related Programs, SAMHSA – Not frequent; often narrow population focus S

54 54 Veterans Administration Resources The Department of Housing and Urban Development and the Department of Veterans Affairs Supported Housing (HUD- VASH) – Long-term case management – Supportive services – Operating support Veterans Justice Outreach Initiative S

55 55 State, County, Municipal Resources Medicaid for eligible participants and eligible services Revenue through the Community Mental Health Centers Dollars may be available through other agencies depending on population (i.e., Division of Child Services and the Youth Aging Out of Foster Care partnership with Connected by 25) S

56 Key Concept: Services are often the most difficult leg to fund and require the greatest creativity. 56

57 Strategic Considerations 57

58 58 Private Funding Can Play an Important Strategic or Gap Filler Role Foundation Dollars – Explore both local and national foundations – Usually targeted to specific activities, population, or geography Other Private Funding – Grants through banks or corporations - Usually targeted to specific activities, population, or geography – Private philanthropy/fundraising – Community Foundations

59 Strategies Pick up the phone Compromise on targeting Advocate for funding using budget neutral approaches, targeted to your audience Offer funding, support, resources in exchange for consideration Use philanthropic support as a leading wedge 59

60 Pitfalls Compromise doesn’t mean water down You’re creating housing for people with CJ histories, not jails Be mindful when mixing funding resources, keep the focus on low threshold Resist the urge to do it on the cheap Resist the urge to transitionalize 60

61 Leveraging Mainstream Resources Mainstream Public and Affordable Housing Resources Health Care Systems – Health Reform – For-Profit Entities (Hospitals/Managed Care) Examples of Federal Direction – Current Section 811 RFP 61

62 Bud Clark Commons (Portland, OR) 130-unit PHA-owned and managed supportive housing Waiting list populated by referrals from 3 FQHCs using DESC Vulnerability Assessment Tool on clinic patients Services include: – PHA-provided housing stability services – 2 contracted mental health clinicians – Medical case management and primary and behavioral health services by 3 FQHCs 62

63 CSPECH (Massachusetts) Partnership between MHASA, MBHP (Value Options), and health and supportive housing providers Developed through the Community Support Program as part of an 1115 Medicaid waiver Targets chronically homeless with high health need indicators Uses both scattered and single- site projects to access housing through providers Uses contracting structure to extend support network to non- billing agencies 63

64 CSH Lending Products 64

65 CSH Lending Products Project Initiation Loans (PILs) These early stage loans are a unique CSH offering. They encourage developers to get projects off the ground with incredibly flexible terms that include 0% interest, typically up to $50,000. Predevelopment Loans CSH predevelopment loans are flexibly structured to meet your project’s financing needs. We can even consider loans of over 100% of collateral value. 65

66 CSH Lending Products Acquisition Loans Financing for real estate acquisition in connection with the development of supportive housing. Other Lending Products Construction Mini-Perm Loans Preservation Finance 66

67 Why CSH Lending All CSH loan products are tailored to your needs. We offer below market rates and favorable terms to provide early stage capital to supportive housing projects that can make a difference in your community. We’ll even work with you to pair financing with technical assistance to help ensure that your project is the highest quality supportive housing. 67

68 Key Concept: You’re not in it alone FINANCING PHASES 68

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