Presentation on theme: "Creating Affordable Housing with the Housing Initiative Fund Elizabeth B. Davison, Director Department of Housing and Community Affairs."— Presentation transcript:
Creating Affordable Housing with the Housing Initiative Fund Elizabeth B. Davison, Director Department of Housing and Community Affairs
Some Facts about Montgomery County, Maryland Population in 2004 (estimate): 931,000 Land area of the County: 495.5 square miles Number of Housing Units: 334,632 Owner-occupied housing: 77.3% Average household size: 2.66 persons Median sales price for a single family home: $320,645 Average rent for a 2 bedroom apartment: $1,211 per month 2002 median household income: $79,115
Howard County Montgomery County Frederick County Prince George’s County Fairfax County Housing Initiative Fund Projects in Montgomery County Washington, DC Funded in FY02
The Housing Initiative Fund Adopted As part of the County Code in 1988. Purpose Establishes a trust fund to promote a broad range of housing opportunities in Montgomery County.
1.Renovating distressed properties. 2.Preserving housing that could be lost from the affordable housing stock. 3.Special needs housing. 4.Helping create mixed-income communities. 5.Making sure that housing programs build neighborhood and not just housing units. 6.Working toward an equitable distribution of affordable housing units. Goals of the Housing Initiative Fund
Sources of Revenue for the Fund Condominium conversion tax Impact tax Property rental State contributions General fund: 2.5% of property Tax dedicated to the Fund. Current sources: Sale of moderate priced housing Sale of publicly owned land Investment income Loan repayments Developer payments Past sources:
Developer submits application to the Department of Housing and Community Affairs. Application is straight forward, requiring information that is needed for a normal development project. Step 1
Step 2 Housing Loan Review Committee determines if request meets threshold criteria and funding guidelines. The Committee is a diverse group of county residents and staff who have been designated by the Director of the Department of Housing and Community Affairs. The committee has regularly monthly meetings but may meet more frequently if there are proposals ready for review.
Step 3 Director of the Department of Housing and Community Affairs determines which requests will be funded and the conditions and terms of the funding.
Step 4 Developer receives funding via low interest or cash flow loans.
Factors Considered During the Review Process Purpose: Complies with HIF mission Public purpose Neighborhood need Need for physical improvement Compatibility: Project design Land use and zoning Community support Feasibility/cost: Financial feasibility and need Leveraging Cost reasonableness Market feasibility Readiness to go forward Availability of support services Development team capacity
For every dollar of local funding spent, the Housing Initiative Fund was able to leverage seven dollars in resources from private, federal, and state sources. Important Note:
Preservation: Stewartown Homes Apartments Property: 94 unit complex, one third uninhabitable when acquired by the housing authority. Expiring “236” property. HIF role: 30 year loan at 1%, with no payments for 17 years and no interest accruing. Rehab costs of $120K/unit. Leverage ratio of County funds: 5.24 to 1. Conditions: Housing authority will operate the property as affordable housing and will renew the Section 8 contract as long as HUD continues the program.
Goals met by this project: 1.Renovating distressed properties. 2.Preserving housing that could be lost from the affordable housing stock. 3.Making sure that housing programs build neighborhood and not just housing units. Community Preservation and Development Corp. runs a computer learning center and after school job training at Stewartown Homes Apartments.
Rehabilitation: Montgomery Arms Apartments Property: Historic 130 unit complex located in downtown Silver Spring built in the 1940s. Owned by the housing authority. HIF role: $2 million, 30 year loan at 3%, no payments for 6 years, no interest accruing. In 7 th year, payment to be based on available cash flow.
Rehabilitation and upgrading underway at Montgomery Arms. Conditions: 84 units reserved for families and individuals in affordable housing programs. Of these, 10 are “McKinney Act” units for chronically mental ill persons. 46 units leased at market rate. Goals met by the project: 1.Renovating distressed properties. 2.Special needs housing. 3.Helping create mixed-income communities. 4.Working toward an equitable distribution of affordable housing units.
New Construction: Victory Terrace Property: Former 16-acre school site (surplus), purchased by nonprofit housing developer Victory Housing. Located in a neighborhood of multimillion dollar mansions on 2-3 acre lots. Bought by a nonprofit builder associated with a religious organization. HIF role: Two loans: a land purchase loan to defer payments, with no interest accrual, for 20 years. Predevelopment and development loan will have 1% interest only payments for 5 years, then fully amortized for remaining 35 years. Both loans to be cash flow loans. Conditions: 72 units with 14 affordable to persons at or below 40% of the area median income, 44 units to persons at or below 60%. Remaining 14 units unrestricted.
Goals met by the project: 1.Special needs housing. 2.Helping create mixed-income communities. 3.Working toward an equitable distribution of affordable housing units.
Transitional Family Housing and Single Room Occupancy: Econolodge makeover Property: 99 room motel in two buildings. HIF role: $287,246 towards purchase of the motel by the County. Housing authority to serve as development manager during construction.
1.Renovating distressed properties. 2.Special needs housing. 3.Making sure that housing programs build neighborhood and not just housing units. Goals met by this project: Conditions: 40 living units will be created for single adults needing permanent supportive housing and 17 2-bedroom apartments will be created for families needing 3-6 month transitional housing. The completed project will be operated by the Montgomery County Coalition for the Homeless, Inc. under partnership with DHCA and HHS. Econolodge makeover:
http://www.montgomerycountymd.gov/ For more information, please contact Elizabeth B. Davison, Director, DHCA, or Stephanie Killian, Multifamily Housing Manager, at 240-777-3600, or check our website: content/hca/Housing/mutifamily-intro.htm