FINANCING EQUITABLE TOD NALHFA Dena BelzerMay 19, 2011

Quick Introduction  Strategic Economics and the Center for Transit Oriented Development (CTOD)

Housing Affordability

Employment Opportunities

Unlike Other Development Types, TOD is Defined by Multiple Related to “Scales” Related to Transit Connectivity

TOD Is Not Just About Projects, its About Neighborhoods and Districts With a Range of Opportunities and Constraints

Transit Oriented Neighborhoods Need More Than Housing Development/Preservation

Financing TOD Includes Financing a Wide Array of Activities

Any Financing for TOD Must Be Considered in a Broader Context

Difficulty financing long-term, higher risk projects  TOD can take 20 years to build out, and traditional financing is much shorter term  High holding costs for land near transit  Costly infrastructure investments often required up front  Few developers are sufficiently experienced and capitalized

Private Development Public Sector Financing Strategies Infrastructure and Amenities Public Sector Financing Strategies Infrastructure and Amenities Private Development Financing TOD in Weak Market Areas Can Be Especially Challenging Financing Strategy in Warm or Hot Market Locations (aka “Value Capture”): Financing Strategy in Cooler Market Locations (aka “Unlocking Private Capital”):

New and Emerging Strategies for Financing TOD 1. Structured Funds 2. Leveraging Partnerships 3. Tapping Other New Partners 4. Joining with Other Projects

Bay Area Transit Oriented Affordable Housing Fund  $50 million equitable TOD Fund  Nine-county Bay area  10 year Fund; 5 year origination period  Five loan products for affordable housing, community facilities and other neighborhood uses

TOAH Fund Priorities Affordable Housing – 85% of Fund capital is targeted to support the creation and preservation of affordable housing Other Neighborhood Uses – Up to 15% of Fund capital may be used to support community facilities, child care centers, health clinics, fresh food markets and other neighborhood retail Geographic Diversity – The Fund is committed to deploying capital in Priority Development Areas (PDAs) in all nine Bay Area Counties

TOAH Fund Partners  Made possible by:  Great Communities Collaborative (GCC)  Metropolitan Transportation Commission (MTC)  CDFI Consortium  LIIF is Administrative Agent  CSH, ECLF, LIIF, LISC, NCCLF and the Opportunity Fund are the originators  Grants provided by three foundations: Ford, Silicon Valley and San Francisco

TOAH Capital Stack 3. Senior Loans 2. Program-Related Investments and Flexible Loans 1. Equity or Grant $ Public Sector – $10 million from the MTC Philanthropy and CDFIs – $15 million from six CDFIs and Ford, SF Foundation and Living Cities (4 layers here) Banks – $25 million from Morgan Stanley and Citi Community Capital

TOAH Loan Products  Acquisition Loans  Predevelopment Loans  Construction Bridge Loans  Construction/Mini-Perm Loans  Leveraged Loans for NMTC deals

DHA and Metro West Housing Solutions (Lakewood CO) Assembling Land for TOD Partnership of: Denver Housing Authority Lakewood Housing Authority City of Denver City of Lakewood General Services Administration, Region 8 Regional Transportation District Denver Region Council of Governments Leveraging Over $540 Million in Existing Investments in the Corridor to raise other funds based on shared priorities

Boston Public Health Commission BPHC $6.4 million ARRA obesity prevention grant will be used to:  Decrease consumption of sugar-sweetened beverages through counter-advertising and policy change  Increase active transit through bike share programs and land- use policies  Improve neighborhood-based food production and distribution through environmental changes that create additional space for community and backyard gardening  Enhance the integration of high-quality and frequent physical activity and education into the school day In 2005, 26 percent of black adults, 22 percent of Latino adults, and 14 percent of white adults in Boston were considered obese. In a 2010 study, LRT was found to reduce a passenger’s Body Mass Index by 1.18 kg/m2 compared to non-LRT users in the same area over a month follow-up period. This is equivalent to a relative weight loss of 6.45 lbs for a person who is 5'5. LRT users were 81% less likely to become obese over time.

Better Denver Bond Measure (2007)  $550 million to fund 211 infrastructure projects including improvements at five transit stations. Station; Funds Given Overall PurposeCost BreakdownCurrent Status Decatur/Federal; $2.07 million Provide basic connections to nearby low-income housing and Denver Human Services' offices. --Police cameras --Xcel lighting --Sidewalk improvements --Yet to determine rest of funds Construction to start in Q1 2011

In Concluding: Two Key Lessons 1. Need to build “buy in” around the value of transit oriented locations for all income levels (building political will and setting a policy framework) 2. Partnering with a broader array of entities, including the transportation agencies, creates a much larger pool of options and opportunities for financing both housing and other necessarily community facilities.

For More Information “CDFIS and Transit Oriented Development” Federal Reserve Bank of San Francisco Community Investment Center