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2010 AHTF STAKEHOLDERS MEETING

2010 AHTF STAKEHOLDERS MEETING. What’s New at LAHD. Rushmore Cervantes , Interim General Manager Tim Elliott , Acting Director of Major Projects Mariano Napa , Acting Trust Fund Manager Sergio Tejadilla , Compliance Manager (New ) James Johnson , Technical Services Supervisor ( New ) .

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2010 AHTF STAKEHOLDERS MEETING

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  1. 2010 AHTF STAKEHOLDERS MEETING

  2. What’s New at LAHD • Rushmore Cervantes, Interim General Manager • Tim Elliott, Acting Director of Major Projects • Mariano Napa, Acting Trust Fund Manager • Sergio Tejadilla, Compliance Manager (New) • James Johnson, Technical Services Supervisor (New)

  3. 2008-2009 Activity

  4. Changes to the 2009 NOFA • LAHD received 49 applications requesting $243 million, but only $21 million in flexible funding was available. • This forced the Department to make changes to its funding priorities for the 2009 NOFA.

  5. Fully Funded Projects The NOFA gave top priority to projects that were otherwise fully funded. The collapse of the 4% tax credit market, brought about mixed FHA/ LAHD financing proposals. LAHD funds intended to leverage tax credits, not replace them. Such projects were excluded from the top tier of funding priority.

  6. At-Risk Projects • NOFA also prioritized at-risk/preservation projects. • $35 million in applications received, but only $21 million was available. • These included proposals for replacement housing and FHA non-tax credit projects. • Funding for preservation projects was suspended for 2009.

  7. Length of Commitment • Under the NOFA, commitments are valid for two funding rounds. • One time American Recovery and Reinvestment Act of 2009 (ARRA) funds supported credit prices. • Projects not receiving 2009 credits could face a funding shortfall and need to be reevaluated under future market conditions. • AHTF 2009 Round 2 commitments were only valid for the 2009 TCAC funding cycle.

  8. Scoring/Ranking • 9% tax credit projects ranked according to the TCAC scoring system. • The new 2009 system valued the non-tax credit funding as a percentage of the project cost. • The effect locally was, the greater the subsidy request, the higher the ranking. • This resulted in applicants requesting less than the full amount of tax credits and subsidy than necessary, to manipulate their ranking. • TCAC awards one point for each one percent of public funding up to a maximum of 20 points. • Public subsidies were limited to 20% of TDC so all projects could be evaluated equally and fairly.

  9. IDEAS FOR 2010 Changes to the 5% Subsidy Boosts • Boosts to be eliminated: • Smoke-Free Incentive • South Los Angeles • New 5% subsidy boosts: • Balanced Communities (Average income over 100% AMI) • New Generation & Supportive Housing Loan Fund Projects

  10. Fully Funded Projects • Given the priority, 4% tax credit projects with existing Proposition 1 (C ) Transit Oriented Development (TOD) awards could utilize most of the available funds. • Questions about availability of PMIB bond funds • Should allocations to TOD projects be capped or suspended?

  11. Length of Commitment • If ARRA funds are renewed, should 2009 LAHD commitments be carried over to 2010 TCAC Round 1?

  12. MHP Projects • 2009 9% special needs projects with MHP allocations may be unable to meet 150-day readiness deadline. • Should some funds be made available through a NOFA set-aside for MHP bridge loans?

  13. At-Risk Projects The goal of the new ranking system: • Fund projects that have completed the most footwork with HUD to maximize the Section 8 as a leveraging source • Prioritize projects most likely to convert to market rate • Adopt a more stringent definition of At-Risk than currently employed by TCAC Assign points based on: • The closer the contract is to expiration • Percentage of Section 8 units • Status of Contract Renewal and Market–to-Market process: Projects that have a renewal in place with the marked-up rents will score highest, followed by projects with a reliance letter from HUD, etc.

  14. Scoring/Ranking • Is the limit of a maximum of 20% public funds too restrictive? • Should land cost be deducted from TDC? • Should tie-breaker cutoff be higher for senior projects?

  15. Zoning and Land Use Proposed Zoning Administrator’s Interpretation (ZAI) would allow units with parking reductions only at Section 42 LIHTC rents. • Density Bonus concessions would be subject to lower HCD rents.

  16. Comparison of 2008 Rents-UpdateTax Credit Allocation Committee (TCAC) and State Health and Safety Code (H & S)Example

  17. IMPORTANT DATES 11/04/09: Publish Draft NOFA 11/23/09: Mayor and City Council approval 11/30/09: Bidders Conference 12/14/09: Application Deadline 03/03/10:Post Recommended Projects

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