Funding Calendar for - PowerPoint Presentation

Funding Calendar for 2020-2021 Affordable Rental Housing Division

AgendaNeed For Funding Calendar Stakeholder OutreachFunding Calendar SWHP Alignment and NOFA Principles Key Policy Question #1 Key Policy Question #2 Key Policy Question #3 Next Steps

Need For Funding CalendarAs OHCS Development resources and priorities have expanded, it has become necessary to address stakeholder needs by publishing a calendar of fund offerings for the upcoming biennium. Allow for better project planning, G ive surety on upcoming NOFA offerings, and W ill help to further drive affordable housing investments toward the Statewide Housing Plan priorities.

Stakeholder OutreachTo inform the calendar and framework discussions: Held September 9 th to discuss upcoming funding opportunities and to garner feedback on a funding calendar and priorities for the 2019-2021 biennium; follow up survey recently closed. “Mapping the Pipeline” exercise Small Group Discussions Equity and Racial Justice in NOFAs LIFT 3.0 Rental Framework Guiding Principles in Project Scoring NOFA Standards Project Development Manual (PDM)

Stakeholder Outreach

Funding CalendarAllow for better project planning, give surety on upcoming NOFA offerings, and will help to further drive affordable housing investments toward the Statewide Housing Plan priorities. Things to consider: Resource Demand Resource Availability Statewide Housing Plan Priorities NOFA Guiding Scoring Principles

Resource Demand“Mapping the Pipeline” exercise provided general project concepts that are in development or early stage planning. Preliminary information included: 6,500 units across 84 projects Mostly urban, new construction Preservation remains a focus considering over 50 projects at risk of expiry

Resource Availability 2020 Available 2021 Available Gap Resources $20,000,000 $20,000,000 Vets GHAP $6,500,000 $6,500,000 LIFT $75,000,000 $75,000,000 Permanent Supportive Housing (PSH) $20,000,000 $30,000,000 Preservation -- $25,000,000 HOME $7,000,000 $7,000,000 National Housing Trust Funds (HTF) -- $4,000,000 9% LIHTC $10,000,000 annual credits $10,000,000 annual credits Oregon Affordable Housing Tax Credit (OAHTC) TBD TBD Agricultural Workforce Housing Tax Credit (AWHTC) $3,625,000 $3,625,000 Oregon Rural Rehabilitation Loan (ORR) $780,431 -- Other Resources: In addition to these noted, 4% LIHTC funding is available in a non competitive application (the only limit on the use of these resources is our private activity bond limits); all projects are encouraged to use Multifamily Energy Program (MEP) resources for energy efficiency measures, and HUD 811 Project Based Rental Assistance if allowable per program delivery.

SWHP Alignment and NOFA PrinciplesEquity and Racial Justice Priority: in funding affordable rental housing development we intend to build the following principles into our NOFA frameworks: Affirmative Fair Housing Marketing MWESB Construction Workforce Engagement Resident Services; point incentive for culturally responsive partnerships with resources Opportunity Area and Vulnerable Gentrification Area preference Diversity, Equity and Inclusion (DEI) agreement

SWHP Alignment and NOFA PrinciplesHomelessness Priority: in developing fund offerings we would ensure that our NOFA frameworks give priority to: Setting-aside units for those experiencing Homelessness Setting-aside units for serving Homeless Veterans Serving Lower Incomes Including Project Based Rental Assistance

SWHP Alignment and NOFA PrinciplesPermanent Supportive Housing Priority: we have a Statewide Housing Plan goal of funding 1,000 PSH units during the 5 year Statewide Housing Plan period. In launching our PSH Initiative we will ensure that we are prioritizing: Investing in training and technical assistance Including PSH units in projects where there is operational resources as well as supportive tenancy services Providing corresponding training and technical assistance Serving those experiencing chronic homelessness

SWHP Alignment and NOFA PrinciplesAffordable Rental Housing Priority : we have a Statewide Housing Plan goal of increasing our funded project pipeline to 25,000 during the 5-year Statewide Housing Plan period. In developing NOFAs we will ensure that we are: Producing a funding calendar to allow developers to plan resource needs Investing in capacity building opportunities Including adequate subsidy to ensure project viability, while incentivizing leverage; Including funding options for new unit production, service enriched production, and preservation; Prioritizing unit creation in production strategies Prioritizing resident service connections in service enriched housing Prioritizing expiration and loss of subsidy for preservation

SWHP Alignment and NOFA PrinciplesRural Priority: we have a Statewide Housing Plan goal of increasing our rural investments to fund 985 units in rural Oregon. In developing NOFAs we will work to ensure that we are: Setting subsidy limits that are sufficient to develop in rural areas where there is less access to leveraged resources, and where rents are low Allowing rural investments under all development strategies Targeting appropriate resources to rural areas Prioritizing rural investments in rural areas with access to appropriate services to ensure success

SWHP Alignment and NOFA PrinciplesHomeownership Priority: while these resources are dedicated to the development of affordable rental housing (aside from part of the LIFT resources), we can foster connections to the Homeownership efforts by: Prioritizing investment in projects that include asset building relationships where appropriate, and Allocating 20 percent of the LIFT resources to Affordable Homeownership Development.

  Draft Resources 2020 2021 Equity & Racial Justice Homelessness Permanent Sup. Hsng Aff. Rental Hsng Rural Homeownership Fund Offering 2020 Resources Included* ( approx ) 2021 Resources Included* (approx) Jan - March April - June July - Sept Oct - Dec Jan - March April - June July - Sept Oct - Dec 9% LIHTC NOFA $10MM 9% LIHTC $2 MM HOME $4 MM Gap tbd OAHTC $10MM 9% LIHTC $2 MM HOME $4 MM Gap tbd OAHTC Jan release June decision     Jan release June decision     u u u u u u HOME NOFA $5 MM HOME $2 MM Gap tbd OAHTC $5 MM HOME $2 MM Gap tbd OAHTC Jan release June decision     Jan release June decision     u u u u u u LIFT Rental NOFA $60 MM LIFT tbd OAHTC AWHTC? $60 MM LIFT tbd OAHTC AWHTC? Jan release June decision     Jan release June decision     u u   u u   LIFT Homeownership NOFA $15 MM LIFT $15 MM LIFT Jan release June decision     Jan release June decision     u       u u Permanent Supportive Housing (PSH) NOFA ~$ 20 MM PSH; connected to PSH Institute; tbd OAHTC; Rent Assistance ~$30 MM PSH detail TBD; $4 MM in HTF tbd OAHTC; Rent Assistance Pilot Projects Selected in 1st q 2020       est. Jan release est. June decision     u u u u u   Preservation NOFA $10 MM Gap; tbd OAHTC $20 MM LBB; tbd OAHTC Jan release June decision     Jan release June decision     u u   u u   OAHTC for 4% LIHTC tbd OAHTC tbd OAHTC Jan release       Jan release       u u u u u   Manufactured Park Preservation NOFA $5 MM Gap; tbd OAHTC $5 MM LBB; tbd OAHTC Jan release       Jan release       u     u   u Veterans NOFA $6,500,000 MM Vets GHAP; tbd OAHTC $6.5 MM Vets GHAP; tbd OAHTC     July release Dec decision     July release Dec decision u u u u u u Small Projects NOFA -- $13 MM Gap; tbd OAHTC AWHTC?             July release Dec decision u u u u u u Agricultural Workforce Housing Tax Credit (AWHTC) $2.875 MM Credits $2.875 MM Credits Jan release       Jan release       u     u u   Oregon Rural Rehabilitation (ORR) $780,431 -- Jan release               u     u u   *NOTE: Multifamily Energy Program will be included in all offerings that meet program requirements  

Key Policy Question #1At this point, we have not identified specific OAHTC resources for fund offerings; instead they are listed as “to be determined”. Policy Question: What guidance does Housing Stability Council have for OHCS regarding the use of OAHTC? in New Construction or Acquisition/Rehabilitation projects where the OAHTC investment serves to reduce rents to serve those with lower incomes, OR In Preservation which serves to lower the cost of borrowing money for the project.

Key Policy Question #2In response to feedback the Department is proposing to allow developers to request OAHTCs outside of funding cycles as an additional resource to be used for a 4% LIHTC-only application. Policy Question: Is Housing Stability Council comfortable with expanding our availability of OAHTCs to include out-of-cycle 4% LIHTC projects ?; What guidance would Housing Stability Council have regarding this use of OAHTCs; are there any preferences for project type or location that should be included, or the amount of resources allocated?

Key Policy Question #3The AWHTC has traditionally been made available on a first-come, first-served basis outside of NOFAs. As such, projects receiving these resources have to secure complementary resources to complete their development budget in future offerings, which has served to delay development processes. Policy Question: Should OHCS consider including the Agricultural Workforce Housing Tax Credit (AWHTC) in a NOFA, such as LIFT or the Small Project NOFA? If so, what guidance would HSC provide in developing a strategy for this change.

Next StepsStaff will incorporate Housing Stability Council, and additional stakeholder comments, into a funding calendar strategy to bring to the November Housing Stability Council meeting for review and recommendation.

Funding Policy FrameworksHousing Stability CouncilOctober 4, 2019

AgendaElements to be included in NOFA policy frameworksDraft Framework Elements; Housing Stability Council Feedback LIFT Program Framework; Housing Stability Council Feedback Next Steps

Elements in NOFA Policy Frameworks Striving to increase the standardization across NOFA offerings, so where we can be consistent in what we are asking of applicants, we are able to do so NOFA Policy Frameworks provide the policy frame for a fund offering; high level guidance to use in developing a NOFA application, to include: Scoring Principles, Eligible Project Type, Geographic Targeting, Equity, Funding caps.

  Draft Framework Elements Equity & Racial Justice Homelessness Permanent Sup. Hsng Aff. Rental Hsng Rural Homeownership Fund Offering Development Type Geography Scoring Principles Equity 9% LIHTC NOFA New; Acq /Rehab; Federal Rent Assistance Preservation Statewide; allocated to regions QAP determined - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Tribal Set-Aside - Resident Services; culturally responsive partnerships with resources - Opportunity Area and Vulnerable Gentrification Area preference, points - Diversity, Equity and Inclusion (DEI) agreement, requirement - 9% LIHTC Regional Allocation formula; inclusion of communities of color u u u u u u HOME NOFA New; Acq /Rehab; Federal Rent Assistance Preservation Balance of State Consolidated Plan (*To be revised for 2021*) - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships with resources - Opportunity Area and Vulnerable Gentrification Area preference, points - Diversity, Equity and Inclusion (DEI) agreement, requirement u u u u u u LIFT Rental NOFA New Housing Units Split between Urban & Rural Detailed LIFT framework follows: generally Communities of Color / Costs / Partnerships / Equity - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u u   u u   LIFT Homeownership NOFA New Housing Units Split between Urban & Rural LIFT framework: Communities of Color / Costs / Partnerships / Equity - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u       u u

  Draft Framework Elements Equity & Racial Justice Homelessness Permanent Sup. Hsng Aff. Rental Hsng Rural Homeownership Fund Offering Development Type Geography Scoring Principles Equity Permanent Supportive Housing (PSH) NOFA PSH units in New / Acq /Rehab or Existing / Preservation Split between Urban & Rural Pilot: existing framework $30 MM offering to be developed based on lessons learned from Pilot - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u u u u u   Preservation NOFA Federal Rent Assistance and Publicly Supported Preservation Split between Urban & Rural Risk of Loss; Impact to tenants; Physical condition needs; Community supply / need; Family sized units; Compliance Risk - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Diversity, Equity and Inclusion (DEI) agreement, requirement u u   u u   OAHTC for 4% LIHTC for 4% LIHTC project without other OHCS resources: New; Acq /Rehab; Federal Rent Assistance and Publicly Supported Preservation; Manufactured Home Park Preservation Statewide Policy Question: is HSC comfortable using OAHTC for 4% transactions; Policy Question: aside from broad ties to the Statewide Housing Plan Priorities, does HSC have guidance regarding their use for New versus Preservation projects - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Diversity, Equity and Inclusion (DEI) agreement, requirement u u u u u   Manufactured Home Park Preservation NOFA Preservation of existing Manufactured Home Parks Statewide First Come First Served - Diversity, Equity and Inclusion (DEI) agreement, requirement - Community engagement / representation u     u   u

  Draft Framework Elements Equity & Racial Justice Homelessness Permanent Sup. Hsng Aff. Rental Hsng Rural Homeownership Fund Offering Development Type Geography Scoring Principles Equity Veterans NOFA Units for Veterans in any New / Acq /Rehab project; excludes Preservation Split between Urban & Rural Service connections; Location accessibility; Family sized units; AMI served; Homelessness - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u u u u u u Small Projects NOFA New or Preservation of Small Projects 35 units or less Majority Rural Service connections; Location accessibility; Family sized units; AMI served; Asset building partnerships / service - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u u u u u u Agricultural Workforce Housing Tax Credit (AWHTC) New or Acq/Rehab of housing that serves Agricultural Workers Statewide Currently First-Come First-Served; OHCS currently working on an update / revision - Policy Question if should be placed in (LIFT or SMALL) NOFA - Affirmative Fair Housing Marketing - DMWESB Construction Workforce Engagement - Resident Services; culturally responsive partnerships - Location Accessibility - Diversity, Equity and Inclusion (DEI) agreement, requirement u     u u   Oregon Rural Rehabilitation (ORR) Agricultural Workers Statewide First Come First Served Loan; and offered within NOFAs as applicable - Affirmative Fair Housing Marketing - Diversity, Equity and Inclusion (DEI) agreement, requirement u     u u  

Funding Policy FrameworksHousing Stability Council feedback: Specific feedback on the above framework elements, What additional information Housing Stability Council would like to see in assessing the focus of each of these NOFA frameworks? General 2020-2021 Next Steps: Following the October Housing Stability Council meeting, staff will incorporate Council and stakeholder input to develop funding frameworks for Housing Stability Council review and possible approval in November.

LIFT 3.0 Framework-DRAFT

LIFT Background The primary goals of the LIFT Rental program are to create a large number of new affordable housing units to serve low income Oregonian families and to serve historically underserved communities, such as rural communities and communities of color. LIFT 1.0: $40 million in 2015 LIFT 2.0: $80 million in 2017 LIFT 3.0: $150 million $ 120 million set aside for rental development $ 30 million set aside for homeownership development Set-Asides: Rural Communities, 50% of the $150 million Urban Communities, 50% of the $150 million

FrameworkHigh-level policy document that guides development of NOFAs; HSC oversight prescribed in LIFT statute HSC approval of framework before NOFAs are developed and released allows program to be adaptable and responsive to policy priorities, programmatic changes and stakeholder needs October 2019: first review of draft LIFT 3.0 framework, November 2019: final draft for approval

Proposed Changes for LIFT 3.0 RentalMinimum score required for serving communities of color in rural areasRemoval of the scattered site preference Preference for family-sized units and the higher subsidies that support larger unit sizes Continued scoring that gives substantial preference to those projects that require lesser subsidy per unit; scaled higher in rural areas than in urban areas.

LIFT Subsidy IncreasePer Unit Subsidy Cap: Previously: Urban; $75,000 / unit Rural: $125,000 / unit Draft Proposed: Urban L ess than 2 bedrooms/unit: $75,000/unit Two bedrooms/unit or more: $150,000/unit Rural Less than 2 bedrooms/unit: $125,000/unit Two bedrooms/unit or more: $200,000/unit

LIFT Subsidy IncreaseLarger bedroom size units have been disadvantaged in scoring because they require more subsidy so lose up to 20 points because they need higher subsidy than those with fewer bedrooms Desire to incentivize larger family sized units with the LIFT program Recommendation informed by stakeholder feedback on approach to increase larger units; evens the outcomes Sample project data indicates units can increase by 200+ square feet with each additional bedroom; based on Key Performance Measure construction cost data that could mean an additional $80,000 in construction costs to get from a one bedroom to 3-bedroom unit Draft Subsidy Caps remain below other gap funding efforts Continued significant point preference for subsidy requests below the funding cap

Proposed Changes for LIFT 3.0 HomeownershipMinimum score required for serving communities of color in rural areas Increased subsidy levels to mirror LIFT Rental changes Continued scoring that gives substantial preference to those projects that require lesser subsidy per unit; scaled higher in rural areas than in urban areas . Subsidy cap continued to be limited to the value of the land. Required property valuation at application Clarification of land ownership requirements

LIFT Homeownership Valuation / LandChallenges using LIFT’s Article XI-Q bond funding for homeownership Associated with the need to secure (100% Loan to Value) the LIFT Loan against the land; Existing Homeownership Projects with fund reservations have had trouble getting land valuations (appraised, real market, or assessed value) that are as high as their request / need for subsidy; has resulted in projects needing to return their reservation Given this need to secure the loan against the land, does not allow for project structures where the land is leased to the project owner who is accessing the LIFT resources.

Next StepsIncorporation of HSC and stakeholder feedback into draft frameworkReturn to HSC November meeting for framework approval Staff draft Homeownership and Rental NOFAs NOFAs released in January 2020 with applications received in advance of late spring 2020 bond sale

Questions / Comments?