Snapshot: Affordable Housing Market Fisher Center for Real Estate Conference

1. Snapshot: Affordable Housing MarketFisher Center for Real Estate Conference April 30, 2012 Cynthia Parker, President & CEO BRIDGE Housing Corporation

2. Snapshot: Affordable Housing Market • About BRIDGE Housing Corporation • Demand for Affordable Housing • Traditional Financing Tools • Low Income Housing Tax Credit Program • Redevelopment Agencies • BRIDGE Project Examples

3. BRIDGE Housing Corporation Background • Mission • Quantity, Quality, Affordability • History • Business Leadership • 27 Years of Success • Internationally Recognized Leader and Innovator

4. BRIDGE Housing Corporation Track Record • Approximately 15,000 Homes and Apartments Developed • 85 California Communities • 37,000 Residents • Development in Northern and Southern California

5. BRIDGE Housing Corporation Types of Developments

6. BRIDGE in 2012 • More than 2,000 units breaking ground, with a combined total value of more than $450 million

7. MIXED INCOME – Irvington Village, Fremont Mixed Income Family Rental and Homeownership 100 affordable units Project Value: $31,800,000 283 market-rate units Project Value: $148,000,000

8. SUSTAINABILITY – Mission Walk, San Francisco Family Homeownership 131 units Project Value: $63,500,000

9. SENIOR RENTAL – Foothill Farms, Sacramento Senior Rental Total Units: 138 Project Value: $26,000,000

10. Income Limits • U.S. Median Family Income = $52,400* • California Median Family Income = $71,400* • Bay Area Median Family Income = $103,000* • Extremely Low-Income = 30% of AMI** • Very Low-Income = 50% of AMI • Low-Income = 80% of AMI *based on household of four **Area Median Income = AMI

11. TRANSIT-ORIENTED REDEVELOPMENTNorth Beach Place, San Francisco Mixed-use Family Rental 341 units Project Value: $108,400,000 Up to 60% AMI

12. AFFORDABLE HOMEOWNERSHIPArmstrong Townhomes Family Homeownership 124 units Project Value: $60,000,000 Condominiums were priced $175,000 to $345,000 and affordable to households earning 60 to 100% of AMI

13. Affordable Housing Demand: U.S. • Renter households represent 33% of all households in the U.S., of which nearly 70% are low-income • The Fair Market Rent (FMR) for a two-bedroom apartment in the U.S. is $949 • A renter household needs an annual income of $37,960 in order to afford a two-bedroom apartment at FMR • A renter earning the federal minimum wage ($7.25 per hour) must work 101 hours per weekto afford a two-bedroom apartment at FMR

14. Affordable Housing Demand: California • The Fair Market Rent (FMR) for a two-bedroom apartment in California is $1,353 • A renter household needs an annual income of $54,127in order to afford a two-bedroom apartment at FMR • A renter earning California minimum wage ($8.00 per hour) must work 130 hours per weekto afford a two-bedroom apartment at FMR

15. Bay Area FMRs • In 2012, FMR for a 2-bedroom in San Francisco was $1,905, affordable to families earning at least $76,200 per year; this is a four percent increase from 2011.

16. Continued Demand

17. Traditional Financing Tools Traditional financing tools are inadequate to meet increasing need in our region.

18. Federal Low Income Housing Tax Credit Program • Tax Reform Act of 1986 (IRS Section 42) • Housing Finance Agencies (HFAs) in each state award credits to developers, who sell them to investors in exchange for funding for the construction and rehabilitation of affordable housing (60% AMI and below) • Investors receive 10 year credit • 4% and 9% programs • Nearly 2 million affordable rentals have been created with equity provided by the Low Income Housing Tax Credit Program

19. California Low Income Housing Tax Credit Program • California Tax Credit Allocation Committee • Over $3 billion in Annual Federal and State Credits awarded to date • Over 265,000 units produced since 1987

20. Impact of Economic Downturn Banking Crisis

21. Banking Crisis: Federal Aid for LIHTC Program • 2008 Congress Program Changes • Provided additional Housing Credit authority • Exempted Housing Credits from the Alternative Minimum Tax (AMT) • Fixed the 70 percent present value Credit at 9 percent • Gave states flexibility to provide state-designated developments a 30 percent Housing Credit “basis boost” • 2009 American Recovery and Reinvestment Act of 2009 – Response to Economic Downturn • $2.25 billion in formula grants to states through the Tax Credit Assistance Program (TCAP) • Allowed states to exchange some of their 2009 Credits for cash to make up for equity gaps in Credit developments

22. Banking Crisis: Federal Aid for LIHTC Program • California Tax Credit Allocation Committee: 2011 Totals • Federal (9%) Credit Awards • Annual Federal Credits Awarded: $83,682,515 • Total State Credits Awarded: $86,979,826 • Projects Awarded: 105 • Total Number of Units: 6,150 • Total Number of Low Income Units: 6,026

23. LIHTC Program • California Tax Credit Allocation Committee: 2011 Totals (cont’d) • Federal (4%) Plus State Credit Awards • Annual Federal Credits Awarded: $7,419,382 • Total State Credits Awarded: $23,833,168 • Projects Awarded: 16 • Total Number of Units: 1,175 • Total Number of Low Income Units: 1,134 • Federal (4%) With Tax-Exempt Bond Financing Awards • Annual Federal Credits Awarded: $75,627,461 • Projects Awarded: 109 • Total Number of Units: 10,073 • Total Number of Low Income Units: 9,340

24. DEMAND SNAPSHOTThe Coronet, San Francisco Senior Rental 150 units Project Value: $55,000,000  15-40% AMI Wait/Interest list of over 7,000

25. LIHTC Program: Equity Pricing Trend / Investor Yield Change

26. RDA Funding

27. MacArthur Transit Village, Oakland Mixed-use, Mixed-income Family Rental Affordable Units / Total Units: 108 / 624 Project Value: $329,800,000

28. COMM22, San Diego Mixed-use Family Rental Total Units: 200 Project Value: $77,928,000

29. 9th & Broadway, San Diego Mixed-Use Rental Total Units: 250 Project Value: $73,500,000