11-16-2012

1. State Sponsored Housing Capital Plan Tom Davis tdavis@recapadvisors.com 617-502-5939 11-16-2012

2. The Portfolio Approximately 300 properties Over 13,000 units Includes properties developed under the following State of Connecticut programs: Elderly Housing Congregate Elderly Housing Affordable Housing Moderate Rental Housing Mutual Housing Limited Equity Cooperatives

3. Capital Plan Mission To develop a plan for the modernization of the State Sponsored Housing portfolio that assures its long-term viability Plan for $300 million in state investment over the next 10 years Put the properties on a sustainable trajectory thereafter Assure quality, market-responsive affordable housing Reflect a realistic understanding of capital needs and funding availability Recommend property repositioning as appropriate

4. The Recap Team The team includes experts from multiple disciplines, all of whom specialize in multifamily affordable housing Recap Real Estate Advisors (specialized affordable housing consultants) On-Site Insight (multifamily housing capital needs assessors) AMS Consulting LLC (market analysts) ICON Architecture, Inc. (site planners and architects) Bruce J. Spiewak AIA Consulting Architect (code consultant) Viva Consulting (specialized affordable housing consultants) Jo-Ann Barbour, MSW, LICSW (resident services consultant)

5. The Process Success depends on input from you, the owners You understand the challenges you face You can help us identify areas where training or assistance would be helpful You will vote with your feet – if we don’t produce a viable plan, you won’t implement it The better the information we get, the more realistic our recommendations can be You will have opportunities to be engaged in the process We want the products to be useful to you as well as to CHFA

6. Inputs & Outputs CHFA Regular consultation Financial/Occupancy Data Capital Plan Analysis Site Redevelopment Analysis(if appropriate) CHFA,DECD & Owners Capital Needs Assessment Final Report with capital & market analysis & redev options Market Assessment Operational Analysis Drafts Feedback Owners

7. Financial and Occupancy Data We have access to the data in the CHFA database Property data Occupancy data (2012 tenant profile submission) Wait list data (cumulative) Rent level data Operating expense data (5 year history) Consult with or request additional information from the owners to fill in gaps and to clarify information as necessary

8. Capital Needs Assessment Every site will be inspected for a capital needs assessment CNA inspections will happen between now and May OSI will schedule a date that works for you No surprise visits No site visits Christmas week Please have someone knowledgeable about the property accompanying the inspector Site plans would be very helpful You will receive a draft of the CNA report before it is finalized

9. CNA Components Brief introductory narrative (shorter than typical CNAs) Financial spreadsheet (standard CHFA format – see left) Photographs

10. Market & Property Assessment Market assessment of every town or city Industry, labor force and employment trends Demographic trends Vacancies and rents Detailed property assessment for 100 representative properties • Properties selected for maximum applicability • Examine comps, amenities, unit sizes, rents, etc.

11. Operational Analysis To identify qualitative inputs Current challenges and opportunities Local priorities and initiatives Regulatory issues and concerns Ideas you already have A questionnaire, administered on-line Follow-up questions and discussion as needed

12. Operational Questionnaire Preliminary focus group discussion with leaders of Conn-NAHRO Review of the draft questionnaire with a small group of EDs for testing and feedback Mix of multiple-choice and open-ended questions Designed to be completed in 45 minutes One questionnaire per owner, with some questions that will repeat for each property Not an audit or “gotcha” exercise

13. Questionnaire Topics Basic property information Portfolio performance information Operational structure (use of contractors such as fee accountants & 3rd party managers) Owner/Manager Profile Operations (leasing, compliance, maintenance, etc.) Financial (rent collection, subsidy administration, bookkeeping, accounting, reporting, budgeting) Asset management (planning and strategy) Technology and systems Capital programs (rehab or redevelopment expertise) Board engagement and expertise Strengths and training needs

14. Questionnaire Topics (cont.) Regulatory environment Statutory and regulatory requirements Regulations that impact leasing, occupancy or financial performance Budgeting and Its Impact on Operations Balanced budgets, operating shortfalls and reserves Opinions on the “real” cost of operating the property Marketing Wait list system Demand (location, reputation, obsolescence) Marketing strategy

15. Questionnaire Topics (cont.) Resident participation Organization’s achievements in resident participation Challenges in complying with the state participation requirements Needvs. level of resident services programming Stakeholders Alignment of board and staff regarding long-term strategies Support of the local community for the organization’s mission and/or practices Distinguish the support of the immediate neighborhood as compared to other stakeholders

16. Analysis and Products Owners will be able to comment on the CNA and market analyses before they are finalized Analysis will flag sites that may warrant redevelopment Will trigger additional discussions with owner ICON will develop illustrative redevelopment concepts Analysis will integrate capital, operational and regulatory considerations into recommendations Owners will receive the following products: Capital Needs Assessment (every property) Market Assessments (every town, 100 properties) Redevelopment concept if applicable (6-12 properties) Capital Plan prepared for CHFA use

17. Summary of Inputs from Owners Scheduling of CNA visits and market assessment visits Have a person knowledgeable about the property accompany the CNA inspector Have site plans available for the CNA inspector to review, if possible Have a small copy of site plan and floor plans for CNA inspector to take, if possible Complete owner questionnaire (45 minutes) Feedback on draft documents (Other needs may become apparent as we dig in to the information available)

18. Thank you Tom Davis tdavis@recapadvisors.com 617-502-5939 Also present: Leslie Bos (Recap) Lawrence Kenney (AMS)