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Multi-Family Housing Limited Tax Exemption Program Applications City Center Redevelopment Authority
December 17, 2015
Peggy Sheehan, Program Manager
• Rental Market Update• Overview of Proposed Projects• Financial Analysis• Applicant Comments/Questions• Discussion/Next Steps
Presentation Overview
CCRA Multi-Family Tax Exemption Program Application Review - 2
Rental Market Update-Norris Beggs Simpson Report
CCRA Multi-Family Tax Exemption Program Application Review - 3
$1,184
4.80%
1.87%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
2007:Q3
2008:Q3
2009:Q3
2010:Q3
2011:Q3
2012:Q3
2013:Q3
2014:Q3
2015:Q3
Vac
ancy
Rat
e
Mo
nth
ly R
ent
Source: NAI Norris, Beggs & Simpson Realtors
Vancouver Multi-Family Rental & Vacancy Rates: 3Q 2007 - 3Q 2015 for Two Bedroom/Two Bath Unit
2 BR/2 BA RentVacancy Rate
Rental Market Update- University of Washington Runstad Center
CCRA Multi-Family Tax Exemption Program Application Review - 4
$1.09
5.10%
7.70%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15
Vac
ancy
Rat
e
Mo
nth
ly R
ent
per
Sq
uar
e F
oo
t
Source: Washington Center for Real Estate ResearchNote: Sep-15 data appears to reflect a large number of new (and vacant) units
Clark County Apartment Rental & Vacancy Rates: Sep. 2007 - Sep. 2015 Rent for Two Bedroom/One Bath Unit
Rent/Sq. Ft.
Vacancy Rate
Rental Market Update- University of Washington Runstad Center
CCRA Multi-Family Tax Exemption Program Application Review - 5
The September 2015 report reflects a large increase in units from the March 2015 report; the presumption is that these are new units not yet fully leased
Vancouver - September 2015
Unit Type%
VacantAverage Rent($)
Rent/ SqFt($)
Units Surveyed
Complexes
Studio 4.9% $596 $1.50 183 6 1 Bedroom 1.7% $837 $1.20 2,961 56 2 Bedroom/1 Bath 7.9% $972 $1.10 2,366 49 2 Bedroom/2 Bath 2.5% $1,146 $1.10 3,130 40 3 Bedroom/1 Bath 0.0% $1,089 $1.15 101 8 3 Bedroom/2 Bath 2.7% $1,329 $1.10 983 29
All 3.6% $1,022 $1.13 9,996 73
Source: Runstad Center for Real Estate Research, Fall 2015 Apartment Report
The September 2015 report reflects a large increase in units from the March 2015 report; the presumption is that these are new units not yet fully leased
Rental Market Update- Affordable Rents (HUD)
CCRA Multi-Family Tax Exemption Program Application Review - 6
The September 2015 report reflects a large increase in units from the March 2015 report; the presumption is that these are new units not yet fully leased
1-Person Household 2-Person Household 4-Person Household
Income Level Annual Income Max. Affordable Rent Annual Income Max. Affordable
Rent Annual Income Max. Affordable Rent
115% AMI $59,225 $1,481 $67,620 $1,691 $84,525 $2,113
100% AMI $51,500 $1,288 $58,800 $1,470 $73,500 $1,838
80% AMI $41,200 $1,030 $47,040 $1,176 $58,800 $1,47060% AMI $30,900 $773 $35,280 $882 $44,100 $1,10350% AMI $25,750 $644 $29,400 $735 $36,750 $91930% AMI $15,450 $386 $17,650 $441 $24,250 $606
Income source: US Department of Housing and Urban Development effective 3/16/15Max. rent calculated as (annual income/12)*30%For units renting to households below 40% AMI, contact City staff.
Rental Market Update- Downtown Project Pipeline
CCRA Multi-Family Tax Exemption Program Application Review - 7
Fourteen developments and more than 1,200 units using City’s multi-family limited tax exemption program Eleven approved and three pending Six include 20%+ of units targeting low-
moderate income tenants
Rental Market Update- Overview of Current Projects
- 8
Overview of Current Projects
CCRA Mutli-Family Tax Exemption Program Application Review - 9
Project Summary 19th & Broadway 16th & E Street Heroes Place
Lot Size - Square Feet 10,000 29,000 25,000
Total Development Square Feet 19,000 32,500 26,432
Number of Stories 3 2 5
Floor Area Ratio 1.90 1.12 1.06
Commercial Square Feet - - -
Total Development Cost (Exc'l Land) ~$13,700,000 ~$4,250,000 ~$3,650,000
Number of Residential Units 36 48 48
Studio 28 - 20
Live Work One Bedroom 6 5 4
Live Work Two Bedroom 2 8 0
One Bedroom – One Bathroom 0 5 6
Two bedroom – One Bathroom 0 30 12
Three Bedroom 0 0 3
Penthouse 0 03
Overview of Current Projects
CCRA Mutli-Family Tax Exemption Program Application Review - 10
Project Summary 19th & Broadway 16th & E Street Heroes Place
Proposed Rents
Studio $850 $1,008
Live Work One Bedroom $1,150 $800 $1,650
Live Work Two Bedroom $1,200 $1,150
One Bedroom – One Bathroom $1,100
Two bedroom – One Bathroom $1,275
Low/Moderate Income Units?Yes – 20% Yes – 20% No
Length of Exemption 12 Years 12 Years 8 years
Parking On Site 10 20 63
Overview of Current Projects-Rent Comparisons
CCRA Multi-Family Tax Exemption Program Application Review - 11
Development Studio Rent 1 BR Rent Rent $/SFFunstad Survey Sept. 2015
$596 $837 $1.31
The Uptown $1,155 $1,335 $1.62
13 West $714 $754 $1.22
15 West $671 $708 $1.09
1510 C $850 $1,200 $1.51
19th & Broadway $850 $1.74
16th & E Street $1,100 $1.75
Heroes’ $907-$1,108 $1,650 $1.03
Financial Analysis- Impact of Exemption
CCRA Multi-Family Tax Exemption Program Application Review - 12
Taxing Districts Defers placement of new residential construction
value on tax roll New non-residential construction added as usual and
land value remains on tax roll All other taxes apply as usual
Property Owner No assessed value added for multi-family residential
improvements No property taxes due for limited term
Financial Analysis- Downtown Investment Guidelines
CCRA Multi-Family Tax Exemption Program Application Review - 13
Developed in 1999 to help guide City’s direct investments in Downtown revitalization Per August CCRA meeting: not directly applicable to tax
exemption program but still reviewed Fiscal Benefit: Neutral or positive net present value of City’s
financial participation Developer Return: Limit City funds to an amount that allows the
developer a fair return City Debt: Minimize use of City debt Recent Addition: 1,500 new units supporting a rich socio-
economic population
Financial Analysis- Observations
CCRA Multi-Family Tax Exemption Program Application Review - 14
Fiscal Benefit All three projects provide a positive net present value fiscal
benefit over 20 years (at 4%) The NPV of new property, construction sales tax & utility taxes
exceeds the NPV of the deferred property taxes by a factor of 1.9 to 2.5 over 20 years
Developer Return Developer returns on both projects are not high relative to a
risk adjusted/market return
Financial Analysis- Observations
CCRA Multi-Family Tax Exemption Program Application Review - 15
Observations 19th & Broadway 16th & E Street Our Heroes Place
NPV City of Vancouver Taxes: Proposed Development $227,000 $302,000 $459,589
NPV City of Vancouver Taxes: No Development $13,000 $33,000 $47,636
Estimated Construction Jobs (IMPLAN Multiplier) 26 35 110
Project Design-16th & E Street-Site Plan
CCRA Multi-Family Tax Exemption Program Application Review - 16<
- E
Str
eet
- >
15th Street ->
Project address:500 E 15th and 500 S 16th Street
Project Design-16th & E Street-Elevations
CCRA Multi-Family Tax Exemption Program Application Review - 17
North Elevation Facing 16th Street
Building 1West Elevation
Facing E Street
Project Design-16th & E Street-Elevations
CCRA Multi-Family Tax Exemption Program Application Review - 18
South Elevation Facing 15th Street
Building 4West Elevation
Facing E Street
Project Design-19th & Broadway-Site Plan
CCRA Multi-Family Tax Exemption Program Application Review - 19
<- B
road
way ->
<- A
lley ->
<- 19th Street - >
Project address:Northeast Corner of Intersection Broadway and East 19th St
Project Design-19th & Broadway- Elevations
CCRA Multi-Family Tax Exemption Program Application Review - 20
South Elevation Facing 19th Street
Project Design- Heroes’ Place
CCRA Multi-Family Tax Exemption Program Application Review - 21
North Tower North Elevation South Tower North Elevation
Project address:409 E Mill Plain Blvd and 412 E 13th Street
Project Design- Heroes’ Place
CCRA Multi-Family Tax Exemption Program Application Review - 22
East Elevation
Project Design- Heroes’ Place
CCRA Multi-Family Tax Exemption Program Application Review - 23
Top View
<- “D
” Street ->
<- “E
” Street ->
<- East 13th Street- >
<- East Mill Plain Blvd- >
• Development sub-committee comments
• Board member questions/discussion
• Questions staff should address prior to taking to City Council
• Specific CCRA comments to forward to City Council
Discussion
CCRA Multi-Family Tax Exemption Program Application Review - 24
City Council workshop and consideration of tax exemption agreements in January
Tax Exemption program to be reviewed in 2016
Next Steps/Timeline
CCRA Multi-Family Tax Exemption Program Application Review - 25
Peggy Sheehan, Program ManagerCommunity and Economic [email protected]
Chad Eiken, DirectorCommunity and Economic [email protected]
Questions and Discussion
CCRA Multi-Family Tax Exemption Program Application Review - 22