Assembling the Resources for Supportive Housing

1. Assembling the Resources for Supportive Housing Minneapolis, June 7, 2012 ryan.moser@csh.org

2. What Is Supportive Housing? A cost-effective combination of permanent, affordable housing with services that helps people live more stable, productive lives.

3. Models of Supportive Housing • Single-Site, Single Purpose • Single-Site, Integrated • Clustered Scattered-Site • Scattered-Site • Set-Asides

4. SERV – Integrated Housing • Bergenline Ave (Hudson County, NJ) and Boulevard East (Bergen County, NJ) • Each building has12 units that include 5 PSH units and 7 affordable units. • Guttenberg (Hudson County, NJ) • 14 unit property that offers 6 PSH units and 8 affordable units. • PSH units serve people with serious mental illness. All units serve people at 50% and below AMI.

5. Vision Drives Resource Development • Mission Mandate • Community and Individual Needs • Agency Priorities • Budget Drivers • Choice of Population, There is Never Enough Supportive Housing to Serve Everyone

6. Developing a Supportive Housing Initiative • Can be confusing! • Not necessarily linear • No standard model • Tasks are interdependent • Multiple players

7. ONE: Concept Go? TWO: Feasibility No Go? Go? Go? THREE: Dealmaking No Go? Go? FOUR: Development FIVE: Operations

8. Targeted Tenancy Capital Services Operating Development Budget Services Budget Operating Budget

9. A Typical Deal Capital HOME/CDBG Low Income Housing Tax Credits Federal Home Loan Bank Operating HUD McKinney Section 8 Services Medicaid Philanthropy/Foundations Local Sources Specialized Partnership Services Development Scattered-Site or Set-Aside C

10. The First Leg:Capital C

11. To Build or Not to Build,That is the Question. Pros • Long term project stability • Take advantage of property assets; affordable housing market • Building culture can be pro-social • Exciting flagship • Easier to offer onsite services Cons • Minimum 3 year timeframe • Development Requires a High Capacity Housing Partner • Not In My Back Yard • Concentration C

12. Capital Builds the Box • The costs of designing, purchasing, building or rehabilitating, and filling housing units with tenants. • Soft Costs: Consultant Fees, Architectural Drawings, Marketing Units, Appraisals, Legal Fees, Permits, and Studies • Hard Costs: Acquisition, Construction or Rehabilitation, and Offsite Improvements C

13. Capital Sources • Capital funding is generally offered in the form of either: • A grant • A deferred loan (which operates as a grant for a specified period of time) • A low-interest loan • A Low-Income Housing Tax Credit Award providing investment equity

14. Castle Gardens, The Fortune Society Capital Sources • NYS Housing Finance First Mortgage $3,600,000 • NYS Housing Finance Second Mortgage $4,000,000 • Federal Home Loan Bank Affordable Housing Program $1,500,000 • NYS Office of Temporary and Disability Assistance, • Homeless Housing Assistance Program $5,500,000 • NYC Supportive Housing Loan Program (SHLP) $8,300,000 • Mayor’s Fund $250,000 • NY City Council $2,000,000 • Borough President Capital Funds $1,000,000 • NYS Energy Research Development Authority $239,390 • Enterprise Green Communities $50,000 • Low Income Housing Tax Credits $16,060,594 • Deferred Developer Fee $ 1,000,000 Total $43,499,984 C

15. Sources & Uses • Schedule of Sources & Uses • Combines costs with the financing C

16. Sources of Financing Federal Sources: • Federal Home Loan Bank Affordable Housing Program (AHP) ($750,000) • HUD 811 & 202 C

17. Sources of Financing State Sources: • Low-Income Housing Tax Credits (LIHTC) • Indiana Development Fund or New York State Housing Assistance Program • HOME and Community Development Block Grant (CDBG) Funds C

18. Sources of Financing County or Municipal Sources: • HOME/CDBG • Local Housing Trust Funds • Tax Reaction/Scavenger Sale/donation of publicly-owned land (for acquisition) • Tax Increment Financing Districts (TIFs) • Empowerment Zones • Enterprise Zones C

19. Low-Income Housing Tax Credits • Eligibility is based on tenant income using HUD median income data, adjusted for family size • Rent restrictions – below 60% of AMI • Tax credits received over the first 10 years of operation, but compliance period is 15 • Typically suited for projects of at least 20 units C

20. Key Concept:Housing Funding is Restricted to Housing

21. The Second Leg:Operating

22. Operating Pays the Bills • The costs of operating and maintaining the housing, including all costs of maintaining the project once it is ready for occupancy: • Utilities • Maintenance Services • Insurance • Security • Debt Service or other Loan Payments • Operating and Replacement Reserves • (rent)

23. Relationship with the Development Budget O

24. Who Pays for Operating Support • Sources that pay for costs of operating and/or maintaining the housing or physical component of supportive housing • Who comprises the primary sources? • Federal - HUD • State • County/Municipal • Again, depends on your TARGET POPULATION O

25. Sources Overview O

26. HUD McKinney – Shelter Plus Care • Rental assistance only eligible activity under SPC • Funds provide the operating costs excluding services • Target Population: Homeless and Disabled as defined by HUD • Applicant must provide supportive services in an amount at least equal to the rental assistance provided during the term of the grant O

27. HUD – Shelter Plus Care • New construction: 5-year initial grant • Rehabilitation: 10-year initial grant • Can be sponsor-based or project-based subsidies • Must apply through the local Continuum of Care • Grants are large because must be for 5 or 10 years is there room in the Continuum? • Example: 15 unit, 1bd, SPC for 5 years = around $1 million dollars O

28. HUD – Supportive Housing Program • Operations • HUD Regulation: Pay up to 75% of annual costs • Using other cash resources, make up difference between the total costs and the SHP grant • Leasing • Can pay for up to 100% of annual leasing costs • With leasing, you cannot be the owner O

29. SHP Considerations • SHP budgets do not allow for annual increases, even if your costs rise over time • Continuums may have additional budget requirements • Initial grant is typically for 2-3 years. Grants are renewed competitively on annual basis after initial award • Grant is a direct grant with HUD • Online: www.hud.gov/offices/cpd/homeless/library/shp/index.cfm O

30. Continuum of Care Homeless Bonus Project • Bonus allocated to Continuums on annual basis • Must fund ONE permanent supportive housing project that serves homeless, disabled • Equal 15% of Continuum’s pro-rata allocation • In past, project had to be 80% housing and 20% services O

31. Bonus Project Considerations • Good money if your project is located in Continuum with a decent size bonus • Can fund leasing or operations • Some Continuums are not able to use their bonus dollars due to lack of matching funds O

32. Key Concept:Get to know your Continuum of Care.

33. Tenant-Based Section 8 • The typical scattered-site rental subsidy only program • Can be challenging for tenants with special needs to navigate • Specialized waiting lists can be set up by PHAs O

34. Project-Based Section 8 • Project-Based voucher remains attached to the unit. • Lesser known voucher component, and is optional for the PHA up to 20%. • PHA attaches rent subsidy to a unit of rental housing through a contract with the owner that can last from 1 year to 15 years. O

35. Sponsor-Based Section 8 • Newer process, similar to Shelter Plus Care administration where vouchers go to a sponsor agency • Can be used to increase access for people in need of supportive services • Available in Moving To Work sites • Signals from HUD that they will review waiver requests for PSH related sponsor-basing O

36. Project-Based Section 8 Considerations • PHA may have restrictions that exclude the population project intended to serve • May require some education with PHA • Section 8 certificates may be oversubscribed • More info: www.tacinc.org/Docs/HH/OpeningDoors/ODIssue28.pdf O

37. Public Housing Units • Also administered by the PHA, although there are sometimes different applications • Barriers can be harder to negotiate • Efficiencies sometimes have higher vacancy rates O

38. Key Concept:Get to know your PHA/Vouchering Agency.

39. State/Local Rental Assistance • Does not necessarily have the same targeting as Federal rental assistance. • May not have the same barriers related to CJ populations. O

40. Section 811 • The Section 811 program allows persons with disabilities to live as independently as possible in the community by increasing the supply of rental housing with the availability of supportive services. • Current RFP has changed the format providing only operating assistance and requiring a partnership with the Medicaid administering agency and focus on high cost recipients. O

41. Section 811 Considerations • Announced through competitive process in the HUD SuperNOFA (notice of funding availability) • Timeframe: Spring O

42. HUD HOPWA Program • National dollars – Competitive SPNS dollars • Local dollars – formula dollars funneled through Dept of Public Health or Dept of Housing • Amount of funding varies by location • Funding specific for HIV/AIDS population • Funding can include rental assistance, however, grants are typically not for more than 2-4 years at one time O

43. Funding Restrictions to Consider • As we discussed with services, public financing program rules can differ significantly by source • Need to consider: • How does the source define homelessness? • Are their qualifying disabilities? • Are there barriers based on Criminal Justice or other restrictions? O

44. Key Concept:Operating stream may hide the need for capital funding.

45. The Third Leg:Services S

46. Develop a Service Plan You’ll use it to inform your Service Budget • TARGET POPULATION • Service Needs • Services Program • Overview, Partners and Roles, Staffing, Outcomes • Budget and Staffing Plan S

47. Common Approaches • Contracts with funders for services to a set of eligible clients. • Reimbursement agreement for certain services to eligible clients. • Fixed fee for maintaining the health of individual clients. • Grants that help cover service expenses. S

48. Budget Components (cont) • Other expenses • Consultant/contractual services • Social/client services • Transportation • Staff training • Supplies & materials for services • General office supplies and support S

49. Federal Service Funding • Significant portion of funding for services • Some funding directly apply to feds • Continuum of Care (through local process) • Special request for proposals S

50. Federal Service Funding • Majority of funding flow to local level • Alphabet Soup - TANF, Medicaid, SAMHSA, Dept of Ed, VA, DOL, SSA • Departments of Health & Human Services, Social Services, Education/Training, Employment, Workforce Investment Board, Schools S