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Providence District Council Jim Edmondson Member, E&G Group, LLC President, AHOME Slide 2 Questions to address regarding affordable housing What is it? What is the need in Fairfax? How does it get built/financed? What does it look like? What does the County need to do about it? Slide 3 What is affordable housing? Public HousingPrivate market-rate affordableSubsidized rental housing (Section 8 or vouchers)Low-Income Housing Tax Credits (LIHTCs)Workforce housingVariations Special needs such as group homes Homeless shelters Domestic violence victims Others: Slide 4 What is the need in Fairfax? Changing pattern of job growth Lower median income Changing housing preferences Other CRA at GMU is reliable source Need more apartments and rental Need ToD Implication Tens of thousands of units over the next 20 years Large portion need rents of less than $1,250 - $1,500 per month CRA Slide 5 Slide 6 What is the need in Fairfax? Changing pattern of job growth Lower median income Changing housing preferences Other CRA at GMU is reliable source Need more apartments and rental Need ToD Implication Tens of thousands of units over the next 20 years Large portion need rents of less than $1,250 - $1,500 per month CRA Slide 7 How does affordable housing get financed and built? Cant expect market forces to do it See example on next slide Lets look at a capital structure for real apartment projectLIHTCs and tax exempt bondsMust have gap financing, or soft loans from CountyADUs? Slide 8 A real affordable housing project made possible by DC HPTF 116 Units, all LIHTC eligible (household incomes of $40,000 to $65.000) 20 special needs apartments with rental subsidies from DCHA 2 service providers N Street Village and LAYC Land owned by H Street CDC sold to development entity HSDC as managing member (project helped by R.E. Tax Exemption) E&G as primary developer 2321 4 th Street NE Land $ 3,000,00010.0% Construction incld contingency $18,858,87062.6% Design $950,0003.2% Financing (assuming bonds and 4% LIHTCs) $2,213,0957.3% Other soft costs $1,554,0005.2% Developer Fees $2,500,0008.3% Reserves $1,069,9053.5% TOTAL DEVELOPMENT COSTS $30,145,870 $259,878 TOT /Unit Tax Credit Equity $ 9,813,14432.5% Perm Debt $10,500,00034.7% Deferred Fee $800,0002.6% DHCD $7,500,00024.8% NOI $615,6762.0% Seller Note $1,000,0003.3% TOTAL SOURCE OF FUNDS $30,228,819 Surplus $82,950 Slide 9 How does affordable housing get financed and built? Cant exceed market forces to do it See example on next slide Lets look at a capital structure for real apartment projectLIHTCs and tax exempt bondsMust have gap financing, or soft loans from CountyADUs? Slide 10 What does affordable housing look like? Fairfax County 284 Units Built in 1950 Market rate affordable old garden apartments Seven Corners Slide 11 What does affordable housing look like? Washington, DC 549 Units Built in 1962 LIHTC middle aged garden apartments Ft Chaplin Park Slide 12 What does affordable housing look like? Washington, DC ~300 Units Elevators & ToD Minnesota Ave Metro Slide 13 What does affordable housing look like? Washington, DC To be built starting next month 2321 4 th Street (Rendering) Slide 14 What does the County need to do about it? Economic development strategyLets look at Countys workforce housing tableHousing blueprint/Homelessness prevention Slide 15 Place making/Redevelopment Transportation Affordable Housing Workforce Development Development Process Improvements Demographic Changes (Respond to Aging Population, Social Equity, Millennials) Innovation Support & Small Business Support Healthy Communities (Support policies to create a healthier population/community) Communication (Encourage more community engagement & participation) Diversify the Economy Slide 16 What does the County need to do about it? Economic development strategyLets look at Countys workforce housing tableHousing blueprint/Homelessness prevention Slide 17 Fairfax Workforce Housing Table Income Tiers for Affordable Housing Up to 120% of AMI2% of total units Up to 100% of AMI3% of total units Up to 80% of AMI5% of total units Up to 70% of AMI3% of total units Up to 60% of AMI2% of total units Slide 18 What does the County need to do about it? Make it part of economic development strategyProvide meaningful funding to get units built Tweak the ADU ordinanceDefine the term, and set and meet goals Use revenue bonds generously