Proposed Charge Increase for Affordable Rental Housing Programs

1. Proposed Charge Increasefor Affordable Rental Housing Programs Caleb Yant, Chief Financial Officer Natasha Detweiler-Daby, Senior Policy Analyst and Interim Multifamily Program Section Manager September 6, 2019

2. Statement of Intent Create a Revenue Model that: • Where possible, ensures each program generates sufficient revenue to cover its costs of operation • Maintains appropriate working capital reserves to provide funding during times of reduced program activity • Reduces dependency on state programs to subsidize operating deficits from federal programs • Doesn’t turn a profit September 6, 2019

3. Impact to Program Subsidization September 6, 2019

4. State Comparison of Application Charge *Assumes application with 100 units September 6, 2019

5. State Comparison of Reservation Charge September 6, 2019

6. State Comparison of Monitoring Charge September 6, 2019

7. Other Significant Changes Proposed • Reservation Charges for all current and future Gap Financing Programs • From 0% (in most cases) to 1% for grants and 1.5% for loans • Monitoring Charges for non-LIHTC units • From $0/unit to $25/unit • Conduit Bond Program issuance charge • From maximum of $100,000 to $150,000 September 6, 2019

8. Impacts to Rental Housing Developments Statement of Intent: • Not impact current budgets; minimize cost increases for monitoring • Balance ensuring long-term program delivery viability for OHCS staff and wanting to foster applications that are fully conceptualized with not wanting to artificially create a barrier to entry; policy trade-off • Acknowledge that increases to development budgets may result in a nominal need for increase in Gap resources September 6, 2019

9. Project Example • LIFT & LIHTC 4%: For-profit sponsor, Willamette Valley • 102 Units for a total cost of $12,395,086 (LIFT funding request was $4,590,000, annual allocation of LIHTC 4% was $524,708, Conduit funding request was $7,300,000) • Prior Application Charge: 102 units x $25 a unit = $2,550 • Proposed Application Charge (4% application charge would apply): $5,000 (a net increase of $2,450) • Prior Reservation Charge: • LIFT = $0 • LIHTC 4% ($524,708 x 12%) = $62,965 • Proposed Reservation Charge: • LIFT ($4,590,000 x 1.5%) = $68,850 (a net increase of $68,850) • LIHTC 4% ($524,708 x 12%) = $62,965 (no change) • Prior Conduit Issuance Charge: $7,300,000 x 1.5% (Max $100,000) = $100,000 • Proposed Conduit Issuance Charge: $7,300,000 x 1.5% (Max $150,000) = $109,500 (a net increase of $9,500) • Total Net Increase: $80,800 September 6, 2019

10. Project Example • 9% LIHTC: Non-profit sponsor, Central Oregon, resident services • 36 Units for a total cost of $17,768,022 (annual allocation of LIHTC 9% was $1,200,000, GHAP funding request was $778,125) • Prior Application Charge: 36 units x $25 a unit = $900 • Proposed Application Charge (9% application charge would apply): $5,000 (a net increase of $4,100) • Prior Reservation Charge: • GHAP = 0% • LIHTC 9% ($1,200,000 x 6.5%) = $78,000 • Proposed Reservation Charge: • GHAP (778,125 x 1.5%) = $11,672 (a net increase of $11,672) • LIHTC 9% ($1,200,000 x 9.5% ) = $114,000 (a net increase of $36,000) • Total Net Increase: $51,772 September 6, 2019

11. Project Example • Gap Financing (GHAP) & LIHTC 4%:Non-profit sponsor, central Portland • 173 Units for a total cost of $ 42,117,561 (GHAP funding request $2,824,713, annual allocation of LIHTC 4% was $1,350,286, Conduit funding request was $23,300,000) • Prior Application Charge: 173 units x $25 a unit = $4,325 • Proposed Application Charge (4% application charge would apply): $5,000 (a net increase of $675) • Prior Reservation Charge: • GHAP = $0 • LIHTC 4% ($1,350,286 x 12%) = $162,034 • Proposed Reservation Charge: • GHAP ($2,824,713 x 1.5%) = $42,371 (a net increase of $42,371) • LIHTC 4% ($1,350,286 x 12%) = $162,034 (no change) • Prior Conduit Issuance Charge: $23,300,000 x 1% (Max $100,000) = $100,000 • Proposed Conduit Issuance Charge $23,300,000 x 1.5% (Max $150,000) =$150,000 (a net increase of $50,000) • Total Net Increase: $93,046 September 6, 2019

12. Questions and Feedback