Oregon Housing Stability: Qualified Allocation Plan 2019 Update

1. Qualified Allocation Plan Update • Presenter Name in bold, position, if used, in italics Oregon Housing and Community Services or other affiliate name Date (optional) Event name or location (optional) • June 7, 2019 • Housing Stability Council

2. Presentation Agenda • Process Overview • Outreach Themes • QAP Next Steps • QAP

3. QAP 2019 Update, Overview of Project Phases Membership and Mission Membership and Mission QAP Update Project Phases Phase 2 Analysis of Stakeholder Feedback Phase 3 Draft plan, Board Approval Phase 1 Stakeholder Roundtables Public comment period Online Survey Month 1 Months 7-8 Months 2-3 Months 1-4 Months 2-6 • QAP

4. QAP 2019 Update, Phase 1 – Stakeholder Outreach Membership and Mission Membership and Mission Stakeholder Roundtable Conversations Held April 29th Held April 29th June 26th target Held May 22nd Held May 30th • QAP

5. QAP 2019 Update, OHCS Goals: Membership and Mission 2019 Update Goals • QAP

6. QAP 2019 Update, Themes: Membership and Mission Alignment with Statewide Housing Plan Priorities Equity & Racial Justice Rural Priority PSH • MWESB is challenging, support is needed • Potentially competing priorities (rural production vs. MWESB contracting) • Issues with location-based scoring (Opportunity Areas, Vulnerable to Gentrification) and Need vs. Inventory • Total Development Costs not that different between regions • Lenders/Investors acknowledged challenges in doing business in rural Oregon • Funding sources and sustainability are a concern • Need for TA, rental assistance, strong operational support • Desire to clarify definitions of target populations, possible eligibility beyond chronically homeless • Lenders/Investors had many questions about risk profiles of projects • QAP

7. QAP 2019 Update, Questions: Membership and Mission Alignment with Statewide Housing Plan Priorities Background: We are embarking upon the creation of a comprehensive MWESB strategy to expand the use of MWESB contractors in the development and operations of affordable housing. A consultant is expected to begin work to develop this strategy in July and complete the work by the end of the year. In advance of that strategy, we have given point preference to projects that identify plans to seek MWESB contractors and require that they report on outcomes at the end of the development process. Policy Question: Is Housing Stability Council comfortable continuing to use this approach in awarding points for MWESB contracts until we are further along in the development of a comprehensive MWESB strategy? • QAP

8. QAP 2019 Update, Themes: Membership and Mission Adoption of National Best Practices Preservation Income Averaging Cost Containment • Need a strategy for small deals with 9%, especially in rural • Need better ways to use 4% credits for preservation – increase maximization to extent possible • Be mindful of impact of 2017 HB 2002 • Need for capacity building • Developers very opposed to setting threshold below the maximum allowable 60% average • Advisement for close alignment with Asset Management and Compliance to ensure enforceable rules • Need strategies for relocation and anti-displacement • Need to consider quality and durability of housing • OHCS needs to acknowledge cost escalation • Locational criteria are a major cost driver • 6% increase to overhead profit and general conditions needs to be increased • QAP

9. QAP 2019 Update, Questions: Membership and Mission Adoption of National Best Practices Background: The 4% LIHTC Program is designed as a production tool for those projects that are large enough in scale to be able to leverage substantial resources through debt, attract a wide pool of investors, and in many cases not require additional sources of public subsidy. Core to this approach is maintaining minimal policy layers within the 4% LIHTC program. This approach will then focus our 9% program toward addressing those hard-to-develop, and therefore much costlier, policy-rich projects that serve the lower end of the economic spectrum – and especially those projects in smaller rural areas and those needing additional gap resources. Policy Question: Is Housing Stability Council comfortable continuing to use the 4% LIHTC resources as the tool for projects that can capitalize on economies of scale to get those 60% units on the ground relatively quickly with little policy overlay, (including MWESB, supportive services, large unit sizes, etc) while focusing the 9% LIHTC program more so on furthering harder to serve policy objectives? • QAP

10. QAP 2019 Update, Themes: Membership and Mission Streamlining Project Selection & Funding Process Readiness to Proceed New Data System • Concern about increased costs • Concern about accountability for initial submitted costs • Need to consider long term operations and quality, especially with PSH • Consider how requirements add to costs • Excited about electronic applications • Desire to keep some subjectivity • Mixed feelings on self-scoring from developers, overwhelmingly positive from lenders/investors and PJs • QAP

11. QAP 2019 Update, Themes: Membership and Mission Streamlining Project Selection & Funding Process Background: If we dedicate points to projects that are demonstrating readiness to proceed, we are effectively increasing the use of pre-development resources in the marketplace. Small, rural, and culturally specific developers often lack access to funding that can be used to fund substantial pre-development activities. At the same time, without a lens on readiness to proceed, we see long development timelines that substantially delay the ability of these resources to serve Oregonians in a time of great housing need. Policy Question: How should we approach the balance between wanting ensure that small rural and culturally specific partners have access to our funding resources factors and the desire to get units placed on the ground quickly which increases predevelopment investment needs? • QAP

12. QAP NEXT STEPS Membership and Mission Membership and Mission • Stakeholder Outreach; scheduling for late June: • Culturally specific developer partners • June compilation and publishing of outreach meeting notes • Release initial redline draft for comments • Additional opportunity for public engagement • July Housing Stability Council • Review initial redline draft • August Housing Stability Council • Review updated QAP, determine if ready or not for public comment • QAP

13. Questions or Comments? • QAP