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Building Affordable Housing The Olympia Gardens Experience

Alabama A

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Building Affordable Housing The Olympia Gardens Experience

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    1. Alabama A&M University (AAMU) Community Development Corporation (CDC) 1 Building Affordable Housing The Olympia Gardens Experience The ability of an HBCU to accomplish community economic development goals hinges upon access to capital markets The Low-income Housing Tax Credit (LIHTC) Program provides access to private investment capital for affordable rental housing

    2. Alabama A&M University (AAMU) Community Development Corporation (CDC) 2 Building Affordable Housing The Olympia Gardens Experience This program provides a federal tax credit to investors in affordable housing.  The credit can be used each year for 10 years and is allocated to non-profit developers, who may sell it to raise equity to construct or acquire and rehabilitate affordable rental housing. 

    3. Alabama A&M University (AAMU) Community Development Corporation (CDC) 3 Building Affordable Housing The Olympia Gardens Experience The LIHTC or Tax Credit) program was created by the Tax Reform Act of 1986 as an alternate method of funding housing for low- and moderate-income households, and has been in operation since 1987.

    4. Alabama A&M University (AAMU) Community Development Corporation (CDC) 4 Building Affordable Housing The Olympia Gardens Experience LIHTC are a source of “debt free” capital and must be used for new construction, rehabilitation, or acquisition and rehabilitation. Projects must also meet the following requirements: Rental Projects Projects that serve low-income individuals or families at 60% or below the area median income

    5. Alabama A&M University (AAMU) Community Development Corporation (CDC) 5 Building Affordable Housing The Olympia Gardens Experience The LIHTC program reduces the tax bracket for high income investors through syndication Syndication is simply the selling of profits and losses (cash and tax losses) through a limited partnership

    6. Alabama A&M University (AAMU) Community Development Corporation (CDC) 6 Building Affordable Housing The Olympia Gardens Experience A limited partnership allows an investment company to pass both profit and losses to its shareholders (investors) in portion to their ownership interest in the partnership Olympia Gardens is a limited partnership between the AAMU CDC and Olympia Construction (a for-profit developer) and AmSouth Bank (corporate investor)

    7. Alabama A&M University (AAMU) Community Development Corporation (CDC) 7 Building Affordable Housing The Olympia Gardens Experience Project Description 48 garden style apartments 8 one bedrooms 28 two bedrooms 12 three bedrooms Amenities Clubhouse with laundry and meeting rooms Community pool and playground Attractive landscaping and sprinkler system

    8. Alabama A&M University (AAMU) Community Development Corporation (CDC) 8 Building Affordable Housing The Olympia Gardens Experience Project Description 29 units rent at or below 60% of AMI 19 units rent at or below 50% AMI 8 units reserved for the mentally handicapped

    9. Alabama A&M University (AAMU) Community Development Corporation (CDC) 9 Building Affordable Housing The Olympia Gardens Experience Benefits of LIHTC Project to HBCU & CDC Addressed need for quality affordable housing CDC gained experience as a housing developer Enhanced sustainability of CDC Improved visibility of CDC to community Provided positive Public Relations for the HBCU

    10. Alabama A&M University (AAMU) Community Development Corporation (CDC) 10 Building Affordable Housing The Olympia Gardens Experience Challenges - Technical Training Understanding the LIHTC Application Process FHLBA, BB&T, Others Training Board Members about the Program Obtaining professional and technical advice FHLBA University Attorney Securing Reputable Private Partners

    11. Alabama A&M University (AAMU) Community Development Corporation (CDC) 11 Challenges – Assembling a TA Team No one believe you can achieve goal Everybody wants to be paid pro bono legal advisor University accountant Tax credit attorney FHLBA Development Doctor Program

    12. Alabama A&M University (AAMU) Community Development Corporation (CDC) 12 Building Affordable Housing The Olympia Gardens Experience Challenges – Dealing with NIMBY issues Finding a suitable site Soliciting local government involvement City government Housing Authority

    13. Alabama A&M University (AAMU) Community Development Corporation (CDC) 13 Building Affordable Housing The Olympia Gardens Experience Challenges – Negotiating a Development Agreement Private partners Selling the Tax Credits Syndicating the Project Negotiating with Syndicators

    14. Alabama A&M University (AAMU) Community Development Corporation (CDC) 14 Building Affordable Housing The Olympia Gardens Experience Project Pitfalls after obtaining Credits University and CDC Relationship Board Members not attending Training Private partners not living up to commitments Unexpected delays in completing contracts Gov’t Approvals – take time

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