SAN ANTONIO AFFORDABLE HOUSING PRESERVATION & EXPANSION: PLAN & POLICIES January 13, 2011 Working Session with BOC

SAN ANTONIO AFFORDABLE HOUSING PRESERVATION & EXPANSION: PLAN & POLICIES

January 13, 2011

Working Session with BOC

I. SAHA’S MISSION AND AFFORDABLE HOUSING PRESERVATION &

EXPANSION PLANNING PROCESS

II. SAN ANTONIO AFFORDABLE HOUSING: DEMAND, SUPPLY

AND NEED INDICATORS

III. SAHA’S RECENT PRESERVATION AND EXPANSION ACTIVITIES AND

STRATEGIC ASSETS

IV. EXTERNAL PLANNING CONSIDERATIONS

V. SAHA’S GO FORWARD PRESERVATION AND EXPANSION

GUIDING PRINCIPLES, POLICIES, AND PRIORITIES

DISCUSSION FRAMEWORK & AGENDA

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SAHA MISSION STATEMENT

The San Antonio Housing Authority is committed to building and maintaining affordable housing for the citizens in our community. We seek to create safe neighborhoods by partnering with individuals and organizations to provide housing, education, and employment opportunities for families of modest means to become self-sufficient and improve their quality of life. We shall serve our clients and all citizens with the highest level of professionalism, compassion, and respect.

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SAHA AFFORDABLE HOUSING PRESERVATION AND EXPANSION PLANNING PROCESS

Planning process built on foundation of fact based assessment of affordable housing demand, supply, and unmet need in the City of San Antonio

Significant communication and coordination with key external stakeholders including Mayor’s office, HUD, as well as key local public, for profit and non-profit leaders and organizations to maximize credibility, coordination, and success of planning and implementation work

Stakeholder retreats with non-profits, for-profits/developers and public agencies in summer 2010 (follow-up planned in 2011)

Discussions with Mayor’s office, City planning, and Trinity regarding integrated San Antonio housing planning and systematization of City’s affordable housing supply, demand and need data tracking and analysis

Evaluation of external funding environment including funding challenges posed by San Antonio affordable housing needs assessment

Commitment to plan and act in coordination with City agencies and partners including Mayor’s office, City Manager, VIA, and SAISD

Alignment of strategies and approaches with HUD4

SAHA AFFORDABLE HOUSING PRESERVATION AND EXPANSION PLANNING PROCESS (CONTD.)

Internal research, analysis, discussion, and feedback

Bottom-up/Staff: Development and neighborhood revitalization/DNR department teams

Top-down/Management & Board: Senior team and Board

Analysis of SAHA’s housing preservation and expansion activities – including new development, redevelopment, acquisitions, voucher expansion and MTW –over the past 10 to 20 years

Evaluation of SAHA’s existing affordable housing stock and strategic assets from a physical needs, location, and local amenities standpoint

Discussions with innovative housing authorities (e.g., Fort Worth, Atlanta)

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AND NEED INDICATORS


STRATEGIC ASSETS





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DEMAND: BEXAR COUNTY HOUSEHOLD DISTRIBUTION BY INCOME LEVEL 2000 & 2010

San Antonio’s Overall Demographic Picture is Positive, with strong growth in households earning 80% AMI and higher…and tremendous growth in households earning more than $75,000

However, there is a large number of households earning below 30% and 60% AMI

Source: Apartment Marketdata 2010 (Claritas, MapInfo) 7

Household Income 2000 2010 % Change

<$10,000-$14,999 80,587 82,004 1.76%

$15,000-$34,999 136,168 126,804 -6.88%

$35,000-$44,999 56,559 57,723 2.06%

$45,000-$74,999 110,476 124,556 12.74%

$75,000-$99,999 40,307 60,484 50.06%

> $100,000 46,007 88,761 92.93%

Median Income 2000 2010

Median $ 39,091 $ 57,800

30% AMI $ 11,727 $ 17,340

60% AMI $ 23,455 $ 34,680

80% AMI $ 31,273 $ 46,240

SUPPLY: SAN ANTONIO TAX CREDIT VS. MARKET RATE UNIT COMPARISON

Source: Apartment Marketdata 2010; Does not include 1-4 unit rental housing or SAHA public housing inventory

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1BR 2BR 3BR 4BR TOTAL Market 69,819 51,214 10,791 683 132,507 %age Total 53% 39% 8% 1% 100%Occupancy 93.4% 93.5% 94.5% 92.7% 93.5%Rate/SF $ 0.93 $ 0.82 $ 0.76 $ 0.55 $ 0.76 Average Size 651 980 1,228 1,578 1,109

Tax CreditTotal 5,323 6,700 3,915 316 16,254 %age Total 33% 41% 24% 2% 100%Occupancy 94.8% 94.1% 95.4% 92.7% 94.3%Rate/SF $ 0.84 $ 0.73 $ 0.68 $ 0.58 $ 0.71 Average Size 675 953 1,151 1,312 1,023

There is little difference between the market and tax credit unit rents and affordability

SUPPLY: SAHA OWNED OR MANAGED STOCK 1994 TO 2010

Note: Units yet to be stabilized or under construction are excluded from totals•2010 vs. 2004 growthSource: HUD multifamily project listing 2010

Federally Funded Housing Programs 1994 1999 2004 20102010 vs.

1994

Section 8 Voucher Inventory 6,482 10,122 11,421 13,152 103%

Public Housing Inventory 7,927 6,759 6,147 6,177 -22%

Traditional SAHA Affordable Housing 14,409 16,881 17,568 19,329 34%

Non-Profit Inventory 3,252 2,540 2,678 3,098 -5%

Tax Credit Partnerships Inventory 0 0 375 3,301

Total SAHA Affordable Housing Inventory 17,661 19,421 20,621 25,728 46%

Tax Credit Partnerships (Market) 0 0 105 117

Total SAHA Housing Inventory 17,661 19,421 20,726 25,845 46%

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761%*

In addition, there are 4596 Project Based Assistance, Section 202 (elderly) and Section 811 (disabled) affordable units in San Antonio

NEED: CITY APARTMENT SUPPLY AND VACANCY DATA

Apartment developers completed seven properties totaling 2,305 units in the first eight months of 2010.

Additionally, five apartment projects, containing 1,601 units, were under construction in August 2010. The largest addition to inventory will occur in the Far Northwest submarket as two properties (916 units) were under construction.

The development pipeline was stout, containing 8,407 units in the planned / proposed stage. Conversely, condo development was comparatively subdued as only 112 condo units were under construction and 522 units were in the planned / proposed stage in August

Apartment vacancy rate was 10.2%, unchanged from a year ago

Source: Red Capital Research, September 2010 10

NEED: SAHA VACANCY RATES

Public Housing:

Family 6%

Elderly/Disabled 2%

Section 8: 3.5% (2010 calendar year)

Non-profit portfolio: 13%

Tax credit portfolio: 6%

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Note: Vacancy rates are by property type (not unit type); Data as of November 2010

NEED INDICATOR: SAHA PUBLIC HOUSING WAITLIST

• 98.4% households on waitlist make below 30% AMI; waitlist is open. • Wait times highest (32 months) for 0 and 1 bedroom family units

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SAHA PUBLIC HOUSING WAITLISTDecember 2010

Number and percent of households (units)

Elderly Family DisabledTotal

(Number)Total

(Percent)

0-1 br 527 5261 2148 7936 47.24%

2 br 55 4653 308 5016 29.86%

3 br 8 2849 83 2940 17.50%

4+ br 1 705 31 737 4.39%Total (Number) 591 13635 2575 16,801 1.02%Total (Percent) 3.52% 81.16% 15.33% 100.00%

NEED INDICATOR: SAHA SECTION 8 WAITLIST

• 97.8% households on waitlist make below 30% AMI; waitlist is closed• If waitlist were opened, agency expects 20,000 to 30,000 families would sign up

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SAHA SECTION 8 WAITLIST; December 2010

Number and percent of households (units)

Elderly Family DisabledTotal

(Number)Total

(Percent)

0-1 br 87 636 0 723 24.40%

2 br 6 1251 19 1276 41.50%

3 br 2 825 4 831 27.20%

4+ br 0 207 2 209 6.90%Total (Number) 95 2919 25 3039 100.00%Total (Percent)

1.97% 97.83% 0.20% 100.00%

Source: www.HavenforHope.org: Homelessness in Bexar County

NEED INDICATOR: BEXAR COUNTY HOMELESS POPULATION

Each year, 25,000 in San Antonio are homeless

3,500 people sleep on San Antonio streets every night

47% of the homeless are families with children, In fact, there are so many homeless children that the average age of the homeless is 9 years

30% of the homeless are veterans

27% of the homeless are employed, but nearly half of them earn less than $350 per month

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AND NEED INDICATORS


STRATEGIC ASSETS





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10%

85%

SAHA DEVELOPMENT, REDEVELOPMENT AND ACQUISITION SUMMARY (COMPLETED OR UNDER CONSTRUCTION)

3005 units constructed

716 units acquired

1007 units planned or completed

5% 25%

68%

6%20%

66%

14%

SAHA COMPLETED, PLANNED AND IN PROCESS PRESERVATION ACTIVITIES

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See attached summary

ASSESSMENT OF SAHA’S DEVELOPMENTS: PHYSICAL AND NEIGHBORING AMENITIES

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See attached summary of physical condition rating (1 to 5 scale); nearby amenities (1 to 5 scale) and occupancy rate by portfolio: Non-profit: 22 properties Public Housing Family: 35 properties Public Housing Elderly & Disabled: 36 properties

Amenities defined to include education, transportation, banking, grocery and jobs

Consider properties in poor physical condition with strong local amenities for redevelopment

Consider properties in poor physical condition and poor local amenities for disposition unless area is targeted for investment by multiple City agencies




AND NEED INDICATORS


STRATEGIC ASSETS





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SAHA’S PLANS AND POLICIES ARE INTEGRATED WITH HUD’S 2010 TO 2015 STRATEGIC FRAMEWORK

Key GoalsGoal 1. Strengthen the Nation’s Housing Market To Bolster the Economy and Protect Consumers.

Goal 2. Meet the Need for Quality Affordable Rental Homes

Goal 3. Utilize Housing as a Platform for Improving Quality of Life

Goal 4. Build Inclusive and Sustainable Communities Free from Discrimination

Key Subgoals1B. Protect and educate consumers when they buy, refinance, or rent a home.1C. Create financially sustainable homeownership opportunities

2A. End homelessness and substantially reduce the number of families and individuals with severe housing needs.2B. Expand the supply of affordable rental homes where they are most needed2C. Preserve the affordability and improve the quality of federally assisted and private unassisted affordable rental homes2D. Expand families’ choices of affordable rental homes located in a broad range of communities.

3C. Utilize HUD assistance to increase economic security and self-sufficiency3D. Utilize HUD assistance to improve housing stability through supportive services for vulnerable populations, including the elderly, people with disabilities, homeless people, and those individuals and families at risk of becoming homeless.

4A. Catalyze economic development and job creation, while enhancing and preserving community assets.4B. Promote energy-efficient buildings and location-efficient communities that are healthy, affordable, and diverse.4C. Ensure open, diverse and equitable communities.

SAN ANTONIO 5 CITY SECTOR PLANNING FRAMEWORK

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San Antonio Sector plan Sector plans intended to

support policies of adopted Master Plan and provide appropriate guidance for land use, transportation, and public facilities planning efforts in each of the City’s five sector areas.

The North Sector Plan was the first sector plan to be adopted as a component of the City's Comprehensive Master Plan on August 5, 2010. Additionally, the City has initiated the adoption process for the Heritage South Sector Plan, and has begun the public involvement process for the West/Southwest Sector Plan

Source: Planning and Community Development Department Strategic Plan for Community Development; June 19, 2008 22

Dark Purple: Anchor NeighborhoodDark Purple: Anchor Neighborhood

Highest housing values. Mix of both residential and commercial uses. Mix of owners and renters.

Policies: Support compatible commercial/residential mixed-use market activity.

SAN ANTONIO REAL ESTATE MARKET VALUE ANALYSIS (MVA): CATEGORY DESCRIPTIONS

Light Purple: Residential EnclaveLight Purple: Residential EnclaveLowest rate of vacant parcels. Lowest foreclosure rate. Primarily single-family home owners.

Policies: Promote residential maintenance and appropriate commercial market activity.

Dark Blue: Steady GrowthDark Blue: Steady Growth

Significant construction activity. Very low percentage of commercial parcels.

Policies: Support construction efforts and facilitate increased commercial activity.

Light Blue: Incipient GrowthLight Blue: Incipient Growth

Significant construction activity. Very high rate of vacant parcels.

Policies: Support construction efforts; identify and address vacant parcels and other trouble areas.

Green: Steady TransitionGreen: Steady Transition

Average housing values. Very high construction activity.

Policies: Support transition; identify specific trouble areas and respond.

Dark Orange: Variable TransitionDark Orange: Variable Transition

Significant foreclosure rate. High rate of vacant parcels. Highest construction activity. High mix of commercial and residential.

Policies: Respond rapidly to foreclosures and vacancies. Support compatible commercial / residential mixed-use market activity.

Light Orange: RestorationLight Orange: Restoration

Very high foreclosure rate. Lowest construction activity. High rate of code complaints.

Policies: Identify and support sub-areas of market strength; respond rapidly to foreclosures and code complaints.

Yellow: ReclamationYellow: Reclamation

Lowest housing values. Highest foreclosure rate. Highest rate of vacant parcels. Very low construction activity. Highest rate of code complaints.

Policies: Create conditions to re-establish market. Identify and support sub-areas of market strength; respond rapidly to foreclosures and code complaints; initiate vacant property reclamation strategies.

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SAN ANTONIO CITY MVA MAP

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SAN ANTONIO INNER CITY REINVESTMENT/INFILL POLICY AND FOCUS

Inner city reinvestment policy adopted by City Council in 2010

Includes 3 reinvestment zones

All City permit fees waived within dark areas

Dark area eligible for upto100% 10 year property tax abatement

AFFORDABLE HOUSING FUNDING ENVIRONMENT

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LOCAL FUNDING – Limited Amount per Project

9% TAX CREDITS

• 1 to 2 Projects in San Antonio Region

• Tax Credit Pricing - $.75 - $.79/Credit w/CRA Need

• Less Demand Away from Coasts/Investors Very Selective

4% TAX CREDITS

• Tax Credit Pricing - $.65 - $.70/Credit

• Requires Significant Soft Debt but Improving

DEBT

• Spread Has Decreased from 250 to 50 bps

• Tax Exempt – 6%/Taxable (Conventional) – 6 ½%

HOPE VI/CHOICE NEIGHBORHOODS– Extremely Competitive

SAHA RESOURCES

• CAPITAL FUND

• Annual Grant ($10 MM – 10% COCC, 20% Oper, 25% CFFP Debt, 45% C/M)

• CFFP – At 25%; Max. 33% - Additional at Expense of Comp/Mod 45%)

• RHF (Approx. $8 Million)

• MTW FUNDING (Approx. $14 Million)




AND NEED INDICATORS


STRATEGIC ASSETS





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SAHA AFFORDABLE HOUSING PRESERVATION AND EXPANSION GUIDING PRINCIPLES

SAHA recognizes the significant unmet need for housing affordable to lower income individuals and families in San Antonio; we will work actively to preserve and expand quality affordable housing required to fill this need

We will only pursue rehabilitation, acquisition or new construction projects that are consistent with our mission and strategic plan, and that fill a significant unmet community need either directly or indirectly

We will do all we can - within the constraints of our primarily housing focused charter – to assist able residents in making socio-economic progress so their families can ultimately sustain themselves without government support

We will create inclusive communities that are healthy and sustainable financially, socially, and environmentally (e.g., energy efficient units, transportation oriented development)

We will develop, coordinate, communicate, and implement our plans with each other and in partnership with residents as well as other public, private, and non-profit organizations to expand economic, educational, and job opportunities and create better transportation access. 27

SAHA AFFORDABLE HOUSING PRESERVATION AND EXPANSION GOALS

GOAL One:To maintain existing levels of deeply subsidized housing and create new affordably priced housing through the acquisition, new construction and rehabilitation of existing affordable housing. GOAL Two:To increase the quality, value, marketability and energy efficiency of all properties in the SAHA portfolio. GOAL Three:Actively pursue emerging development and redevelopment opportunities that meet multiple community goals, such as economic and transit oriented development, while adding to the affordable housing infrastructure for San Antonio. GOAL Four:To integrate economic development and supportive service initiatives that will support residents and the surrounding neighborhoods in new and redeveloping projects.

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SAHA AFFORDABLE HOUSING PRESERVATION AND EXPANSION STRATEGIES

SAHA will pursue all available financially viable strategies to preserve and expand affordable housing in the City of San Antonio including:

Rehabilitation and maintenance (preservation) of existing affordable housing

Redevelopment of existing affordable housing

Development of new affordable housing

Acquisition of affordable housing projects or land

Disposition of developed or undeveloped land/assets

Expansion of housing choice voucher program

Execution of strategies designed to help current residents gain socio-economic self sufficiency (so their place may be taken by a household in need)

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DEVELOPMENT, REDEVELOPMENT & ACQUISITIONS POLICY

Project Need and Location

SAHA will only lead (by building) and/or support (by investing) projects which fulfill a community need for affordable housing, either directly or indirectly (i.e., by generating significant capital and cash to help SAHA directly expand supply of needed affordable housing)

Community need must be determined and documented based on objective data e.g., vacancy rates at or below ‘typical markets in equilibrium’ (e.g., 5%), SAHA waiting list information, actual homeless counts

Project neighborhood must be stable or improving (e.g., Choice/Promise) or SAHA and partners must commit resources

Key focus on transit oriented development and on proximity to jobs

Housing Type, Characteristics and Mix

SAHA will adopt a 1-1 replacement policy for public housing redevelopment

1-1 replacement is defined as the replacement of a demolished unit with a unit or housing choice voucher affordable at an equivalent level (i.e., based on ability to pay). Replacement units are not required to be located on the same site as previous units.

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DEVELOPMENT, REDEVELOPMENT & ACQUISITIONS POLICY (Contd.)

We will continue developing mixed income communities because we believe such communities are healthier and provide better economic and social opportunities and role models for extremely, very low, and low income residents to gain socio-economic self sufficiency

We will develop mixed income communities with at least 20 percent or more units affordable for extremely low income families and individuals

We will focus primarily on creating 1 and 2 bedroom family units, and on housing the homeless (including veterans)

Resident & Community Socio-Economic Support and Development

We will only develop properties located close to key amenities including schools, banking, grocery shopping, employers, and public transportation

Projects must maximize Section 3 resident employment opportunities, both short term and long term

We will increase business activities with minority and women owned businesses

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Partner with residents and community based organizations to provide educational resources, job training, and supportive services to help families become economically stable

Partner with economic development organizations to create mixed use projects/mixed income developments and encourage/capture emerging economic development opportunities

Neighborhood Focus & Development Success Maximization

Invest in (and/or retain investments in) areas which are targeted for investment by other public, non-profit, or for-profit organizations (i.e., we won’t be the ‘lone ranger’ investing in a troubled neighborhood)

Pursue acquisition opportunities adjacent or close to planned or ongoing redevelopment activities as strategic and supporting investments or to help eliminate negative influences to the success of redevelopment efforts

Building Design, Standards and Compliance

All development/redevelopment projects must follow SAHA’s construction and material standards (to be established by the DNR team) including a green building standard to be selected by SAHA 32


Building design must be current and responsive to community needs/environment ; design must incorporate sustainable (not just green) concepts and practices

All development/redevelopment projects must include a replacement and compliance plan and funding set-aside upfront

All developments to adopt smoke-free policy

Resident and Community Input

Residents and community members must have the opportunity to contribute meaningfully and in advance to the design of any planned projects

Financial Viability and Sustainability

A realistic long term financial projection must be completed, including both the construction period and the lease out period. Rent and lease out/vacancy assumptions must incorporate an analysis of competing current and planned projects in the neighborhood

SAHA must value the economic contribution of its tax exempt status by comparing financial cash flows relative to a taxable market rate project and capture project economics commensurate with this value contribution

All projects must meet SAHA’s underwriting criteria33


Financial analysis of acquisitions must incorporate input of DNR team upfront including:

Evaluation of rehab/improvement needs to ensure the project is financially sustainable long term

Estimated cost of bringing project up to SAHA standards

Physical condition review to support financial projections

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SAHA’S CURRENT 3-5 YEAR DEVELOPMENT AND REDEVELOPMENT PROJECT PIPELINE

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VICTORIA COMMONS

• Artisan Park Townhomes (98 Units)

• Leigh Street Homes (24 Homes + 2)

• Durango Street Tract (Vacant 2 acres)

• VC Admin Building (Vacant 9000+ SF)

SUTTON OAKS

• Phase 1 Complete Dec. 2010

• Phase 2 (252 Units)

• Phase 3 (200 Units w/HOPE VI)

• IH-35 Commercial Tract (1.946 Acres)

SAN JUAN SQUARE

• Phase 3

REX SITE

• Vacant – 2.5 Acres

WHEATLEY COURTS

• Redevelopment of 248 PH Units

NEXT STEPS

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All of the input received today will be incorporated into this document, as well as the written affordable housing preservation and expansion policy document to be approved by the BOC in February

Once this plan and policy are approved by the BOC, the team will shift their focus on developing detailed work plans by City Sector and/or portfolio

These plans will prioritize projects or areas for redevelopment, new development, acquisition, and disposition

The team’s work-planning process will incorporate analysis of the current value of assets, strategic potential of assets, and cost to retain/maintain assets

The DNR team will collaborate with the Section 8 and MTW teams to both maximize preservation and expansion of needed affordable housing and increase the focus on resident socio-economic success

Documents

SAN ANTONIO AFFORDABLE HOUSING PRESERVATION & EXPANSION: PLAN & POLICIES January 13, 2011 Working Session with BOC