1. Preserving Affordable Housing: Colorado’s Housing Preservation Network
Housing Colorado NOW!
October 6, 2016

2. Background 1/3 of the nation’s population lives in rental housing
: low-cost rental units increased 10%, low- income renter households rose 40%
Nationally, 100,000 new affordable units built annually
For every affordable unit created, 2 are lost from the affordable housing inventory
Primary reasons the supply of affordable rental housing is shrinking:
Conversion from subsidized units to market rate or for- sale
Owner capacity/interest
Physical deterioration and neglect of properties

3. Affordable Housing Stock
Affordable use periods for ~ 2.2 million privately owned units financed or subsidized with federal and local resources will end between 2015 – 2025
1,275 subsidized properties in Colorado with approximately 65,900 affordable units
Affordability periods for 150 properties w/5,400 units are expiring over the next 3 years in Colorado

4. Preservation Benefits
More cost effective than new construction; energy and resource efficient
Preservation is easier than new construction: entitlement process already completed
Critical community assets that have received public support are maintained
Stable rental housing is vital to diverse, equitable, healthy communities

5. Colorado’s Preservation Initiative
Challenge -
Units being lost and no coordinated strategy for preserving the long term affordability of multifamily rental properties
Uncertainty regarding the affordable subsidized inventory in Colorado
Increasing property values makes preservation more difficult

6. Colorado’s Preservation Initiative
Colorado’s Preservation Initiative
Solution -
Establish a core preservation working group of key stakeholders – Housing Preservation Network
Hire a Preservation Program Manager
Create a master database to track the inventory of affordable housing units and aid in identifying “at risk” properties
Develop and implement a coordinated strategy for preserving the long-term affordability of housing units throughout Colorado

7. Housing Preservation Network – Strategic Plan
Data and Analysis
Resources
Collaboration and Engagement
Resident Support
Policy Development
Operating Efficiencies and Improvements

8. Housing Preservation Network – Strategic Plan
Data and Analysis
Maintain and strengthen the preservation database tool
Identify and prioritize preservation opportunities through data and analysis
Track affordable housing properties identified as most at-risk of converting to market rate
Resources
Identify, structure and close preservation transactions
Maximize use of existing financing products for affordable housing preservation
Increase resources available for preservation
Access loans or grants available for increasing energy efficiency

9. Housing Preservation Network – Strategic Plan
Collaboration and Engagement
Engage and partner with owners, community organizations, governmental entities, tenants, foundations, financial institutions and housing stakeholders to collaborate on preservation efforts
Provide technical assistance to owners, potential owners and managers of at-risk properties
Create and support a lasting structure to address affordable housing preservation in Colorado
Resident Support
Reduce involuntary displacement of residents and negative impacts on tenants who may be displaced through provision of info or resources

10. Housing Preservation Network – Strategic Plan
Policy Development
Align preservation network partner agency program requirements and procedures to support preservation
Identify best practices and emerging trends and policies and adapt and adopt as appropriate for implementation at the local level
Review alternative approaches to aide in long-term preservation of homeownership or rental properties
Operating Efficiencies and Improvements
Assist owners in managing costs through enhanced operating efficiencies
Enhance, simplify and consolidate internal structures for streamlined processing and improved preservation efforts

11. Colorado Preservation Database
Information on 1,275 multifamily properties and 89,000 units with subsidy restrictions
Expiring by year
Sources of restrictions
Property and owner information
150 Properties on highest priority list
Those w/all expiration dates w/in 3 years
High risk programs & 4% LIHTC at year 18
Properties group evaluates, assigns for follow-up

15. Metro Denver

16. Grand Junction & Colorado Springs

19. Questions???
Beth Truby Preservation Program Manager Colorado Housing and Finance Authority

20. Preserving Affordable Housing
Housing NOW! Conference
Beaver Creek, CO
October 6, 2016

21. Decreasing Expenditures
Background
Background on Office of Economic Development
Focused on advancing economic prosperity of Denver businesses, neighborhoods and residents
Overall health of the City is dependent on the economic mobility of residents across range of different incomes
Increasing economic mobility involves:
Increasing Income
Decreasing Expenditures
Building Wealth

22. Background Year-over-year % change in median rent, City of Denver
Year-over-year % change in median income, City of Denver
This chart shows annual income growth, in the blue bars. Since 2011, income growth has been very strong for the most part, with incomes increasing more than 5% each year.
The orange line shows year-over-year rent increases, in comparison. Even though income growth has been strong, since 2013, rent growth has been even stronger.
Rent in Denver in the third quarter of 2015 was 25% higher than a year ago – increasing from around $1000 to $1250.
Source: American Community Survey 1-Year estimates; Apartment Association of Metro Denver vacancy Survey

23. Why focus on preservation in Denver?
Cost effectiveness of maintaining existing affordable housing stock
As land prices, rents and home values increase in areas of the city vulnerable to gentrification, preservation of existing housing stock is key
Significant portion of income-restricted affordable housing stock is in neighborhoods vulnerable to gentrification
BUT, thousands of families also live in unsubsidized (market) affordable housing
Focus on reducing displacement

24. Denver’s Gentrification Study

25. Income-Restricted Rental Units

26. Income-Restricted Units
Access to Affordable Housing in Denver - Units/Vouchers Available in 2016
Housing Type
Number of Units/Vouchers
Covenant Restricted Rental Units
21,823
Inclusionary Housing Ordinance (IHO) For-Sale Units
1,166
Non-IHO Rezone Agreement For-Sale Units (predating the IHO in 2002)
149
Non-IHO For-Sale Units (Denver Office of Economic Development, funded since 2009) 68
Denver Office of Economic Development - Tenant Based Rental Assistance Vouchers
(funded through 2015 HOME program) 58
Denver Housing Authority - Tenant Based Housing Choice/Section 8 Vouchers
5,862
Denver Housing Authority - Project Based Vouchers
870
Colorado Division of Housing - Tenant Based Rental Assistance Vouchers
(Denver specific data, funded through 2015 HOME program) 20
Colorado Division of Housing - Tenant Based Housing Choice/Section 8 Vouchers
(Denver specific data)
1,236
Colorado Division of Housing - Project Based Vouchers
120
TOTAL NUMBER OF UNITS/VOUCHERS
31,372
About 2,700 units have expiring income restrictions over the next 5 years in Denver alone

27. Denver’s Preservation Ordinance
Originally adopted in 2002, updated in 2015
Covers all properties where a public partner (OED, CHFA, HUD, CDOH, DHA) has invested funds in exchange for a covenant or land use restriction
Requirements under the ordinance:
Notification from existing owners when property has an expiring covenant or land use restriction
Notification from existing owners when there are plans to sell a property with covenant restriction
When an owner does plan to sell, ordinance provides the city or its designee the “Right of First Refusal”

28. Denver’s Preservation Ordinance
Limitations of Preservation Ordinance
Does not cover unsubsidized (market) affordable properties
Does not currently cover properties that voluntarily entered into an income restricted covenant or land use restriction
Enacting on city or designee’s right of first refusal is still dependent on resource limited environment
Focuses only on preserving affordability of rental housing

29. Implementation Strategies
Income-restricted properties under Preservation Ordinance:
Denver’s involvement in Colorado Preservation Initiative
Early outreach and education for owners on potential refinance or rehabilitation funding options
Identifying quick capital for time sensitive acquisitions
Identify pool of preservation partners to serve as city’s designee in enacting the right of first refusal
Unrestricted (market) affordable properties:
Direct acquisition, rehabilitation of existing properties
Exploring property tax rebate program to incent owners to maintain existing rent levels
Exploring voucher program to income-restrict a portion of units within a market affordable property

30. Laura Brudzynski Office of Economic Development Laura
Laura Brudzynski Office of Economic Development (720)

31. HUD Preservation Efforts
Audrey Mailes
Resolution Specialist
Denver Satellite Office
October 6, 2016

32. Multifamily West Region
San Francisco Regional Center
Alaska
Hawaii
Oregon
California
Idaho
Nevada
Denver Satellite Office
Arizona
Montana
South Dakota
Wyoming
Colorado
North Dakota
Utah
Washington

33. HUD’s Preservation Efforts
Renewing Section 8 contracts
20-year renewal goals
Annual rent increases
Rental Assistance Demonstration (RAD)
Public Housing and Section 8 Mod-Rehab programs to convert to Project-Based Section 8
Five Things You Should Know About RAD Public Housing Conversions
Low Income Housing Tax Credit (LIHTC) Pilot Program
Provides refinancing for properties recently constructed/occupied, for preservation and mod rehab properties with Section 8, or for older, stabilized tax credit properties through syndication of new credits

34. HUD’s Preservation Efforts cont.
Senior Preservation Renal Assistance Contracts (SPRAC)
Prevents displacement of income-eligible elderly residents of Section 202 Direct Loan properties in cases of refinancing or recapitalization
SPRACs have a 20-year term and provide assistance to residents not covered by a rental assistance contract
Funding currently exhausted
Tenant Protection Vouchers (TPV)
Protects residents during expiration/termination of rental assistance contract or mortgage termination/prepayment

35. New(er) Initiatives 8bb Chapter 15 Rent Increase
Family Self Sufficiency
HOTMA
Homeless Preference

36. General Overview of the 8bb Transfer Process
Agreement between the Owners of Property A (current Section 8 contract) and Property B
Both Owners must meet minimum requirements
Tenants must be notified and protected
Proposal between Owner A and Owner B is submitted to HUD Field Office
Comply with site and neighborhood requirements
HUD Field Office reviews include review by FHEO, Field Economist and appraisers to review Environmental packages, if applicable
HUD Field Office submits to Headquarters
Transfer is Executed

37. Frequently Asked Questions (FAQ’s) as of April 22, 2016
Resources for 8bb
HUD Notice H
HUD Notice H
Frequently Asked Questions (FAQ’s) as of April 22, 2016

38. Chapter 15 Overview
Post-rehab rents for non-profit and for-profit owners
Program Types
Capital Repairs
Transfer Program
Blended Transaction
Rent Increase Types
Mark Up to Market
(MU2M)
Mark Up to Budget
(MUTB)

39. Chapter 15 Requirements 20 year HAP Contract
Preservation Agreement (if applicable)
20 year Use Agreement
Must combine contracts if possible
RCS with “as is” and after rehabilitation market rents
Sources and Uses
Detailed description of the proposed transaction

40. Family Self Sufficiency Program (FSS)
Housing Notice H Issued August 26,
Purpose: HUD program that provides incentives and supports to help families living in Multifamily assisted housing increase their earned income and reduce dependence on public assistance programs.
Eligibility: Any privately owned Multifamily property receiving project-based Section 8 rental subsidy through a Housing Assistance Payment (HAP) Contract is eligible. Participation is voluntary for all parties; owners and families may participate at their discretion.

41. Housing Opportunity Through
Modernization Act of 2016
(HOTMA)
This bill amends the United States Housing Act of 1937 and other housing laws to modify HUD’s rental assistance and public housing programs, the FHA requirements for condominium mortgage insurance, and the Department of Agriculture's single family housing guaranteed loan program.

42. Major Provisions Single Family Public Housing Multifamily
Rural Housing
FHA Mortgage Insurance for Condominiums
Public Housing
Inspection of Dwelling Units
Units Owned by PHAs
Family Unification Program
Limitation on Public Housing Tenancy
PHA Project-Based Assistance
Multifamily
Income Reviews
Limitations on Eligibility for Assistance Based on Assets
Collection of Utility Data
Housing Reforms for the Homeless and for Veterans

43. HUD Homeless Preference and HUD Notice 2013-21 http://portal. hud
HUD multifamily has an objective to increase the number of homeless tenants.
The Denver HUD office has assigned multifamily staff to foster achievement of this goal.
Approval of an optional owner-adopted admissions preferences for households exiting homelessness.
Allowance to include a preference in tenant selection, giving these households a first shot at vacant units.
Overall HUD Goal:
Encourage mainstream housing, including multifamily housing, to be part of the solution to homelessness.

44. HUD Preservation Efforts
Audrey Mailes
Resolution Specialist
Multifamily West Region
Denver Satellite Office

45. Preserving Affordable Rental Housing
Housing Colorado NOW! Annual Conference
Laura Abernathy
National Housing Trust

46. National Housing Trust
The National Housing Trust protects and improves existing affordable rental homes so that low income individuals and families can live in quality neighborhoods with access to opportunities.
NHT engages in public policy development and advocacy that is informed by practice and experience through on the ground real estate development, lending, and multifamily ownership.

47. QAP Preservation Incentives, 2016
(as of 8/30/16)
New York City
District of Columbia
Preservation Set Aside
Points for Preservation
Non-numerical Preservation Priority Established
No preference for Preservation
National Housing Trust 2016

48. LIHTC Preservation Allocations, 2015
This map shows how states have allocated their LIHTCs toward preservation in 2014 and For example, in 2015 Louisiana allocated more than 50% of its LIHTCs toward preservation projects.
New York City
District of Columbia
Up to 15%
15%-29%
30%-50%
Greater than 50%
No Data
No Preservation
*Data for the following states is from 2014: ND, MN, MI, KS, FL, NC, VA, NJ, CT.
All data as reported by the state agency. Missing information is currently being obtained.
National Housing Trust 2016

49. QAPs & Areas of Opportunity
States have wide variety of definitions re: opportunity language in their QAPs
Varying levels of sophistication & sensitivity
Currently, at least 16 states are encouraging developers to use LIHTC to build/preserve MF housing in opportunity neighborhoods
CHFA’s Summary of Changes for the 2017 QAP considers adding areas of opportunity when feasible
National Housing Trust 2016

50. A Balanced Approach
We believe in a balanced approach to fair housing, which:
Recognizes that a significant amount of subsidized housing is located in areas of poverty;  
Promotes access to high opportunity communities through mobility; and  
Ensures that residents who remain in neighborhoods currently experiencing distress and concentrated poverty benefit from investments that improve their housing and increase their access to opportunity.  
National Housing Trust 2016

51. QAPs & Community Revitalization
How do states define Community Revitalization Plans (CRPs) in their QAPs? AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WI WY
Explicit Definition of CRP x
Use of Proxy Designation
Community Outreach
Endorsed by Local official/
government
Assessment of Existing Structures and/or Need for Housing
Other
National Housing Trust 2016

52. QAPs & Community Revitalization
Implementation measures – Many states include requirements or CRP definitions that take note of local funding commitments or implementation measures.
Indiana requires a CRP to include detailed policy goals including affordable housing goals as well as implementation measures and timelines.
Texas requires that an adopted plan have sufficient, documented and committed funding to accomplish its purposes on its established timetable.
State
Implementation Measures
Measurement of Impact CO x FL IL IN IA MA MN PA X TX UT WA
Measurement of impact/Community analysis –
Pennsylvania has several measures of impact including access to public transportation, public parks and open space, and community serving enterprises; as well as measures that improve quality of life and provide health care for residents of the community.
Illinois awards points for CRPs that can demonstrate that they may lead to measurable increases in access to employment and living wage jobs; healthcare and supportive services; community amenities; transportation; etc.
National Housing Trust 2016

53. For more information… Laura Abernathy
National Housing Trust
State & Local Policy Director
, ext. 137
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