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09-21-2017 Housing & Community Development Commission
Agenda Housing & Community Development Commission (HCDC) Thursday, September 21, 2017 at 6:30 P.M. Senior Center, Room 202 28 S. Linn Street, Iowa City Use the Washington Street entrance or 2nd floor skywalk via Tower Place parking garage 1. Call meeting to order 2. Approval of the August 17, 2017 minutes 3. Public comment of items not on the agenda 4. Tentative schedule of project monitoring visits in FY18 5. Consider recommendation to City Council regarding commitment of local funds to proposed Low Income Housing Tax Credit projects 6. Consider approval of the FY17 Consolidated Annual Performance & Evaluation Report (CAPER) — online at www.icgov.org/actionplan 7. Update on Invest Health initiative 8. Update on annual input for Consolidated Plan - IC Compassion back - to -school event 9. Staff/commission announcements 10. Correspondence II.Adjournment If you will need disability -related accommodations to participate in this program/event, please contact Kristopher Ackerson at kristopher-ackerson@iowa- citv.ore or 319-356-5247. Early requests are strongly encouraged to allow sufficient time to meet your access needs. MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION AUGUST 17, 2017 — 6:30 PM SENIOR CENTER, ROOM 202 MEMBERS PRESENT. Syndy Conger, Charlie Eastham, Vanessa Fixmer-Oraiz, Christine Harms, Bob Lamkins, John McKinstry, Harry Olmstead, Paula Vaughan MEMBERS ABSENT: Maria Padron STAFF PRESENT: Kris Ackerson OTHERS PRESENT: Mary Ann Dennis CALL MEETING TO ORDER: Ackerson called the meeting to order at 6:30 PM. APPROVAL OF THE JUNE 15, 2017 MINUTES: Olmstead moved to approve the minutes of June 15, 2017 with edits. Conger seconded the motion. A vote was taken and the motion passed 8-0. PUBLIC COMMENT FOR TOPICS NOT ON THE AGENDA - None. NOMINATION & ELECTION OF OFFICERS: Ackerson stated the Commission nominates and elects a new Chair and Vice Chair each year. Eastham nominated Olmstead as Chair, McKinstry seconded the motion, a vote was taken and the motion passed 8-0. McKinstry nominated Paula Vaughn to be the Vice Chair, Harms seconded the motion, a vote was taken and the motion passed 8-0. CONSIDER A RECOMMENDATION TO CITY COUNCIL REGARDING UNALLOCATED LOCAL FUNDS SET - ASIDE FOR LOW INCOME HOUISNG TAX CREDIT PROJECTS: Ackerson reminded the Commission that last year the City Council started setting aside money for affordable housing projects. It is split up 50% goes to the Housing Trust Fund, 25% goes to land banking, 20% goes to tax credit and 5% to emergent situations (case -by -case basis). When the fiscal year ended on June 30 there were no tax credit applications so that $200,000 will rollover to the FY18 pot of funds. Housing and Community Development Commission August 17, 2017 Page 2 of 6 Affordable Housina Line Item & distribution FY17 Actual Remaining 501AHTF zKwo mom W 25%Iard Banking $ `zAwo 0 $ZAOOO 20%Tm Cmdit $2MMO 0 $Y 000 Notax cmditapplicatium received i n FY17 5% Emergent Situation $SLS000 $36,000 $14000 If naused by end of FY, reserredfurlaad banking $1,9M= Seary900 FYIB Actual Remainig 50% HTF 02E,000 $325,000 W Issue payment August 2017 25%land Banki rig Sm2,5m $0 $152r500 20%Tax Cmdit SOD,000 0 $130,000 5% Emergent Situation $345oo $0 $34500 If notused by end of FY, ME NEdforland banking ZKOOO '+iL,r O00 Lumulative Totals FYISBudget FYIS Budget Available for land banking S421kSOO $628,500 Available for tax ved its $3 oao OR $13Q,000 Available for Emergem5ituatiom $32,SO0 $32,500 TOW $79%WD $751,000 Without any action the money just rolls over, however Ackerson noted that there was interest among the last Commission to discuss possibly allocating that left over money to land banking. Ackerson wanted to bring this before the Commission before they received applications for the low-income housing tax credit funds. The City published an announcement and sent it to tax credit developers. The applications are due at the end of this month so if the Commission is interested in taking that $200,000 and putting it towards land banking that needs to be presented to City Council. Fixmer-Oraiz asked Ackerson to outline what land banking is for the new members of the Commission. Ackerson explained it just means they are putting money aside to buy presumably vacant property for the development of affordable housing units. The City would work with a developer or sell the land to a developer contingent on them providing affordable units. Ackerson noted that most of the land the City can afford is on the outskirts of town and might not be developable right away (could be five or ten years). Conger asked how much land would that amount of money purchase if in land banking or how many projects it might attract if it were put in tax credits. Lamkins asked if a parcel costs more than what is in the land banking account would the City borrow the rest. Ackerson thought that would not be likely. Eastham felt the Commission could make a recommendation to Council to purchase the land with general funds and then increase the allocation to pay back that cost over the next few years. Lamkins agreed with Eastham noting that if the City postpones purchasing a parcel of land there may not be another opportunity for quite some time due to rapid increase of land values. Lamkins asked how the tax credits work. Ackerson explained that the State provides tax credits that are federally funded. The most recent one funded in Iowa City was on Arthur Street which is under construction right now. He noted there are a lot of Housing and Community Development Commission August 17, 2017 Page 3 of 6 requirements for a tax credit application as they are very competitive and the City's contribution is usually fairly small. Mary Ann Dennis (The Housing Fellowship) stated that the tax credits have eligible basis for the developer and the land is not an eligible basis under the low-income housing tax program. Dennis believes either option is good because it is money being used for land. She said for the projects and credits they use the credits pay for about 70% of the project cost. The 30% gap is usually the land and paid for from other sources (such as private donations or local support). Eastham asked if the land can come out of a land bank to be used in a tax credit project. Dennis replied not if it is City -owned unless there is a long-term land lease. The Housing Fellowship has done two projects with land leases simply because the land is too expensive in Johnson County. The Iowa Finance Authority doesn't like the land leases as they are much more complicated. Ackerson noted the City would buy the land, issue an RFP (request for proposal — competitive application process) and it's possible that a tax credit developer would apply and pursue a tax credit project on that land. Dennis added that the Iowa Finance Authority has rules regarding cost caps for tax credit projects and they just recently stated that the cost of land is not included in the cost caps. Dennis elaborated that in a tax credit project, not all of the units need to be affordable but the financing from the credit program would only go towards the affordable units. Olmstead asked how the developers would know if the City has land available. Dennis said those developers are constantly searching so they would know. Eastham stated that increasing the amount of money that is spent for, or allocated in the coming budget, for land banking seems pretty wise because then the City controls the land and it can be used for tax credit projects and those developers are then not bidding for land amongst other developers, causing a higher price. Therefore the key is to get the land first, so then affordable housing can be put on that land. Therefore the Commission should allocate the money for land banking. Dennis stated that is correct generally, however currently she has a willing seller in an appropriated zoned land area to construct 28 one- and two -bedroom, fully -accessible units in the Riverfront Crossings District. The tax credits would pay for about 70% of the total project cost, land is not in the eligible basis for the tax credits. Dennis stated that the preliminary budget states if The Housing Fellowship was awarded the credits (the application is due November 7) the tax credit would provide about $4 million in equity (cash) to the project. The project can then support $1.7 million in private debt and they already have $800,000 committed from the Johnson County Housing Trust Fund, which leaves a gap of $326,777. If the Commission could allocate the funds to tax credits it could be used for this project. Dennis also noted another common barrier is that an applicant must have an executed and exclusive purchase option or contract from the seller that is valid for nine months Housing and Community Development Commission August 17, 2017 Page 4 of 6 after the date of the application due date. Therefore when they are trying to buy land in Iowa City and the seller doesn't want to wait until the following year to close the deal it is hard to find sellers. Ackerson reminded the Commission that if the funds are allocated to tax credits, anyone can apply and The Housing Fellowship is not guaranteed those funds, but they will apply for them. Dennis noted that often the investors are huge corporations (US Bank, big energy corporations, insurance companies, etc.) that apply for the tax credits to build affordable housing units because they want the credits, but then have no interest in owning or managing affordable rental housing. Those companies will get the credits for ten years, the units must be affordable for fifteen years, then after that they sell them and get out so any qualified non-profit is eligible to pursue the right of first refusal and purchase those units for $1 and any debt that is owed on the units. Ackerson echoed what Eastham said earlier about leveraging and the millions of dollars of corporate funds that will come into the community and allow the local banks to have funds to do other projects. Eastham feels it is best to keep the allocations the way they are and let the surplus roll over into tax credits. Ackerson stated that if a project became available where land banking would be needed, then they could do some reallocation at that time, if funds are available. Dennis shared with the Commission that the Iowa Finance Authority is having their annual housing conference September 6, 7, & 8 and the tax credit syndicators all come to that conference and one of the syndicators that The Housing Fellowship has worked with for years is trying to organize a state-wide coalition of developers. She showed him the City's Affordable Housing Plan and he was impressed with it and said no other community in Iowa is as forward thinking regarding affordable housing as Iowa City. Ackerson noted the City issued the request for proposals for the tax credit application for $330,000 and those applications will be reviewed at the Commission's next meeting. Ackerson and Dennis had discussed earlier this week that instead of having a deadline (or application window) leaving it open next year so anybody that has a project can come to the City and make a proposal because negotiating the deals is very difficult and it is hard to time when the developer and land owner will come to an agreement so that should be put on a future agenda to discuss. Ackerson also mentioned another benefit of the tax credits is because there are all these outside investors there are strict management guidelines for the maintenance of the properties so they are often some of the best housing you can find in addition to be affordable. Ackerson stated that he will keep the Commission posted on allocations for these funds. Housing and Community Development Commission August 17, 2017 Page 5 of 6 Ackerson reminded the Commission to not "reply all" to emails. Also Stan Laverman (Housing Inspection Services Division) went with Ackerson to Iowa City Compassion and met with people that were there for a back to school event. They were handing out backpacks and clothes and had a barbeque dinner. They asked for input on what the City could do to improve neighborhoods and Ackerson will report on those comments at the next meeting. Finally, Ackerson passed around a sign-up sheet for people who are planning to attend the Johnson County Affordable Housing Coalition meetings to avoid having a quorum present. Only four commissioners should be in attendance at any one meeting. CORRESPONDENCE: None. ADJOURNMENT: Eastham moved to adjourned. Lamkins seconded, a vote was taken and the motion passed. \ x x x x x x x\ x m 3 x \ $4 A\\ w d m 4 0(±] I 4 § - _ $ I * \ \ / d E ` � 2 � m � ( ] § / C § Cd � \ ) \ § } x 3 ) & / I = * o = @ CITY OF 1OWA CITY MEMORANDUM Date: September 6, 2017 To: Housing and Community Development Commission From: Community Development Staff Re: September 19 Meeting The following is a short description of agenda items- If you have any questions about the agenda, or if you are unable to attend the meeting, please contact Kris Ackerson at 356-5247 or Kristopher-Ackerson@Iowa-City-org- Tentative schedule of project monitoring visits in FY18 November 16 • 4Cs, FY17 Technical assistance to new in -home daycare providers • Bilam Properties, LLC, FY16 Rehab of Walden Ridge • Domestic Violence Intervention Program, FY18 Aid to Agencies • Neighborhood Centers of Johnson County, FY18 Aid to Agencies • Shelter House o FY15 Rapid Rehousing Program o FY17 FUSE land acquisition and construction o FY18 Aid to Agencies April 19 • The Housing Fellowship o FY16 Acquisition of Sabin Townhouses o FY17 and FY18 Rehab of affordable rental units o FY18 CHDO Operating Mayor's Youth Empowerment Program o FY18 Facility Parking Resurfacing o FY18 Acquisition of housing Successful Living FY18 Acquisition of affordable rental FY18 Affordable rental rehab May 17 • Habitat for Humanity o FY17 Property acquisition and construction for one home on North Governor o FY18 Property acquisition and construction • Crisis Center, FY18 Food bank renovation • Little Creations Academy, FY18 Daycare interior renovation project Consider recommendation to City Council regarding commitment of local funds to proposed Low Income Housing Tax Credit projects Two proposals are attached for your reference. For comparison purposes, the following table provides basic information about each proposal. Del Rey Limited Sand Companies, Project Partnership Inc Planning district Downtown North East Units _ 28 50 Affordable_ _ 20 _ TBD Market rate 8 TBD Rezoning required No Yes Project cost_ $5,813,496 $10,441,216 City funds requested $330,000 $330,000 Target demographic Low income families Low income families Sidewalk access Yes _ _ Yes Transit service Yes _ Yes Walking distance to elem. 0.9 miles 0.9 miles the sine Fellowshi Opening the doors of Johnson County 322 E. 2°d St. Iowa City, IA 52240 Office 319-358-9212 Fax 319-358-0053 FROM: Del Rey Limited Partnership REQUEST: $330,000 LIHTC funds for new construction Developer: The Housing Fellowship Maryann Dennis, Executive Director, 319-358-9212 X 5, mdennis@housinefellowship.com Location: 628 S. Dubuque Street This request is for the Iowa City LIHTC funds in the amount of $330,000 presented here as a 2% loan amortized at thirty years (minimum term of affordability). The parcel is located within the River Front Crossing District. We plan to construct a building having twenty affordable and eight market rate apartments of one and two bedroom dwellings. The building will have an elevator and underground parking. Commercial space is required on the street level; 1,500 — 2,000 square feet. The Housing Fellowship plans to rent the commercial space from the LP for use as offices resulting in on -site property management. Iowa City funds will be used for the affordable residences only. The eight market apartments will not be income targeted. Income targeting for the twenty affordable apartments: 2 at 30% AM I; 5 at 40%AM I; 13 at 60%AM I. The LIHTC application is due to IFA in November and requires extensive planning and cost to submit the application. The IFA Board will approve applications in March 2018 with construction to begin by fall. All units will be leased by December 31, 2019. The total project cost is $5,813,496 and will leverage $4,606,055 in private funds. THE has successfully developed four LIHTC projects. The project neighborhood includes new construction of apartments and commercial establishments. The site is easily accessed to downtown Iowa City and many necessary services and is one block from a bus stop. The site was selected because it is available and there is a willing seller. The Housing Fellowship, as General Partner will manage all aspects of the project. 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The development will consist of approximately 50 units, within one building and will target general occupancy, single heads of households with children, families/individuals of color, single men and women. According to CITY STEPS, the most common housing problem in Iowa City is cost -burdened households with 8,155 renter occupied households with housing costs greater than 30% of their income. The current proposal targets these household by providing a mixed income community consisting of 30% area median income, 40% area median income, 60% area median income and market rate, which allows households at various income levels to find affordable housing in Iowa City. The project with benefit low and moderate income residents in Iowa City and Johnson County communities by providing affordable housing for individuals and families, which consists of one, two, three and four bedroom units. Unit amenities will include Energy Star appliances, washer, dryer, dishwasher, and microwave, as well as HERS rating less than 62, and meeting Olmstead goals through Iowa Finance Authority. Other resident amenities include a community room, outdoor children's play area with picnic area, underground parking, storage lockers and secure access. The building will be three stories above grade and will incorporate wood frame construction. The below grade parking area will consist of poured concrete or block walls with structural concrete precast decking and columns. The exterior of the building will be texture stone and steel or cement board siding and will incorporate accents and decorative louvers. All of these features are designed to make the building accessible, affordable and sustainable. Sand Companies, Inc. and their subsidiaries (Sand) will develop, design, build and manage the property. Sand has nineteen years of experience in low and moderate income housing in Minnesota and Iowa. Currently Sand Property Management, LLC manages thirty-nine (1,555 units) housing communities, of which thirty-three are low and moderate income communities. In addition, Sand is currently developing and constructing a 56 unit low-income housing tax credit community in Coralville, which is anticipated to open in November 2017. Sand's current portfolio has an occupancy of 98%. An application for 2018 tax credits will be submitted to Iowa Finance Authority (IFA) in November. A request for Johnson County Housing Trust Fund and Iowa Economic Development Authority will be submitted in the coming weeks. All of these will be used for gap funding. I HOOVER a Hi Point Golf Course v s _ 'i .,�„•red �, �'•�_ a � - Y Herbert Hoover Highway Project Iowa City, IA Sources and Uses August 31, 2017 Uses of Funds> Acquisition & Site Improvements (road, utilities) Construction Contract/Contingency Soft Cost Developers Fee Financing Costs Letters of Credit/Operating Reserves TOTALS Sources of Funds> First Mortgage City Loan LIHTC Equity Deferred Developer Fee/Other Funding Investment Tax Credit TOTAL SOURCES OF FUNDS 900,000 7,489,254 561,645 1,000,000 354,117 266,200 10,441,216 2,125,000 330,000 6,684,444 1,153,022 148,750 10,441,216 NOTE: FOR DISCUSSION PURPOSES ONLY. THESE PROJECTIONS ARE BASED ON ESTIMATES. ACTUAL RESULTS MAY DIFFER OR MAY BE AFFECTED BY FUTURE OR UNFORESEEN EVENTS. �§ ( e }|} _ 13 1, i1i, ( \\ )� 2017 CITY STEPS ANNUAL REVIEW IC Compassion at Church of the Nazarene August 16, 2017 - 4:45-6:15PM Approximately thirty people in attendance City Staff: Kris Ackerson and Stan Laverman Comments Received: Staff attended the back -to -school BBQ at IC Compassion to get input from low income residents regarding opportunities to improve access to affordable housing, public services and public facilities. The event provided dinner, school clothes, backpacks, and books, as well as info tables by Kelly Services, City staff, and IC Compassion volunteers. The table on Page 2 provides a summary of input from three outreach efforts this summer. The top five items after three events include: 1. More decent, safe, affordable homes (without rent increases) - weatherization, pest control, mold mitigation a. City staff is working with local partners to implement a new rental housing rehab program. City inspectors and health professionals will work together to identify low income households with someone suffering from asthma and mitigate the causes (e.g., old carpet, air filters, water infiltration causing mold, etc.). 2. Affordable daycare centers that accept childcare vouchers a. City staff is exploring collaborations to expand and improve quality of birth-5 year old daycare opportunities in a publicly owned building close to Downtown. 3. Safe place and activities in immediate neighborhood for small children 4. Center for those in mental health or substance abuse crisis to avoid jailor the emergency room 5. Promote public art, dance studios, events in the neighborhood Indicate your top 5 items with stickers Juneteenth Mercer Park 6-24-17 Farmer's Market 7-12-17 IC Compassion 8-16-17 Total 1 Affordable daycare centers that accept childcare 34 28 4 66 vouchers I L 2 More decent, safe affordable homes (without rent 35 40 14 89' increases) - weatherization, spraying for bugs, no mold 3 Neighborhood Entrepreneurial Center 10 6 2 ❑ 18 4 Cooking classes- prepare healthyfood on a budget 12 17 1 1-130 5 Legal assistance (tenant/landlord, misc.) 10 12 4 ❑ 26 6 Summer camps for adults with mental illness 8 3 1 Q 12 7 Additional community spaces for neighbors(Broadway 6 12 0 18 police substation, etc.) 8 Safe place and activities in immediate neighborhood for 22 25 17 small children 9 Affordable health and dental care, without longwaiting 15 16 10 �1 times 10 Medicaid representatives to explain benefits and enroll 4 5 2 11 residents 11 Neighborhood walking program with incentives 11 16 0 1-127 12 Organized neighborhood pot-luckswith sponsorships 8 5 1 ❑ 14 13 Expanded hoursat Free Medical Clinic 8 13 5 ❑ 26 14 Slidingfee scale formental health services 13 10 0 ❑ 23 15 Areasto sell community garden produce and products 3 11 2 16 (vending stall/cart) 16 In home visitsforasthma education 3 8 0 Q 11 17 Centerforthose in mental health orsubstance abuse 26 33 2 61 crisis to avoid jail orthe emergency room 18 Promote publicart, dance studios, events in the 27 21 7 ©5 neighborhood 19 Improve access to farmland, encourage immigrants with 3 16 3 22 prior experience to get involved 20 Mental health education and training support for local 17 14 4 �35 churches 665