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HomeMy WebLinkAboutAFFORDABLE HOUSING BOARD - MINUTES - 01/04/2024AFFORDABLE HOUSING BOARD REGULAR MEETING 1 /4 /2024 – M I N U TE S Page 1 January 4, 2024, 4:00-6:00pm Colorado River Room, 222 Laporte Ave CALL TO ORDER At 4:04 PM the meeting was called to order by John Singleton. 1. ROLL CALL • Board Members Present: John Singleton, Bob Pawlikowski, Ed Hermsen, Jennifer Bray, Kristin Fritz, Sheila Seaver-Davis (joined in progress), Stefanie Berganini • Staff Members Present: • Sue Beck-Ferkiss, Staff Liaison – City of Fort Collins • Tamra Leavenworth, Minutes – City of Fort Collins • Guests Present: • Eileen Burwell • Lisa Cunningham 2. AGENDA REVIEW – Sue Beck-Ferkiss requested the Board discuss board officers and elections if time allows. 3. CITIZEN PARTICIPATION Eileen Burwell shared that she is attending the meeting to learn more about affordable housing. 4. APPROVAL OF MINUTES Jennifer Bray motioned to approve the December 7 Regular Meeting Minutes. Stefanie Berganini seconded. Kristin Fritz abstained. Approved 4-0. Bob Pawlikowski and Sheila Seaver-Davis abstained due to absence at the December meeting. 5. NEW BUSINESS A. Annual Report – Sue Beck-Ferkiss • The City Clerk requires the Board to record two documents that highlight the work anticipated (Annual Work Plan) and the progress made (Annual Report). The 2023 Annual Report is due January 31, 2024. Stefanie Berganini motioned to approve the 2023 Annual Report with the additions that the Board wanted a 99-year affordability term in the Land Use Code (rather than 60-years) and that they wrote a letter to the editor outlining their support of the Land Use Code. Jennifer Bray seconded. Kristin Fritz abstained. Approved 6-0. AFFORDABLE HOUSING BOARD REGULAR MEETING 1 /4 /2024 – M I N U TE S Page 2 B. Private Activity Bonds – Sue Beck-Ferkiss • Sue Beck-Ferkiss gave the Board an overview of Private Activity Bonds (PABs), which are conduit debt issued in the local government’s name but repaid by individuals or entities that are not part of that government. Issuers can be states, local governments, or housing authorities. In Fort Collins, Housing Catalyst and Colorado Housing and Finance Authority (CHFA) are the primary users of the City’s Private Activity Bond Capacity. PABs allow debt to be issued at favorable tax-exempt rates. The interest paid is also exempt from federal income tax. • PABs are allowed for several things, but Fort Collins prioritizes their use for affordable housing development and rehabilitation. Annually, the IRS distributes PAB Capacity to all states based on a population-based formula. CHFA requires their use for Federal 4% Low-Income Housing Tax Credit financing, which technically is non-competitive, but due to scarcity of this resource, has become competitive. Bond capacity is approximately 50-55% of the project costs required. • The application process has a March 15th deadline so that City staff have plenty of time to get the request to City Council. The City has an internal committee that reviews PAB requests, makes a recommendation to the Affordable Housing Board for approval, then takes the recommendation to City Council by August 15th to ensure they can pass a resolution by September 15th. DISCUSSION • If a project developer has significant debt elsewhere, is that isolated? You can combine tax-exempt and taxable debt together. Since only 50-55% of the project costs can be financed through tax-exempt, you won’t get the PAB unless you received financing to complete the rest of the project. If a developer has bad credit or something, that will come up and they won’t receive the PAB. • If a bond is defaulted on, who is the responsible party for paying it back? The issuer. There is also a fee associated with issuing bonds. • Does PAB get allocated equally by population or will some places get more than their population warrants? Allocation is based on population, but the statewide balance give priority for different reasons. • Who chooses where the entity is assigned? The applicant. If they are working with an issuer, they will let the City know who that is (typically Housing Catalyst or CHFA) and then the City does the assignment to the proper issuer. • Why does the City allocate PABs instead of the IRS? AFFORDABLE HOUSING BOARD REGULAR MEETING 1 /4 /2024 – M I N U TE S Page 3 Local control and local priorities. Not every community uses PABs for affordable housing. • Could a project in Fort Collins apply for both City and County PAB? Yes. Housing Catalyst has done so for several projects. • What are Single-Family Mortgage Revenue Bonds? They are for down payment assistance programs. The City has not used PABs for this purpose. The City used to have a down payment assistance program, but it was discontinued because our partners were doing it better and we were not getting loans out. • What does bond capacity mean in terms of what you can do with PAB to raise money for a housing project? Every affordable housing project that uses 4% tax credits is required to access tax- exempt, Private Activity Bond Cap. For every project, there are different funding sources – grants, debt, and income. If a project has 4% tax credits, one of the requirements is that 50% of the cost must be covered using Private Activity Bond Capacity. Basically, it’s an amount that each project must be assigned. It doesn’t increase the amount of money the developer will have for a project; it just makes it so that a specific percentage of the project cost must be leveraged with PAB. The reason it's beneficial is because it’s tax-exempt debt, so it costs less to a project than other debt options. One of the bills currently being considered at the state level is to lower the threshold of PABs from 50% to 25% because affordable housing developers are constrained with project debt being financed with PABs. Since developers are constrained by the amount that can be deployed around the state, it ends up costing more because the project must use more taxable debt. • Is the amount of interest that a project pays back standardized through the IRS? No, it’s negotiable. • Why can’t the PAB requirement be taken away and the 4% tax credit just be given out? I have heard some developers don’t like it. Another reason is that the federal government monitors developers on a yearly basis to ensure these properties are being utilized by whom they're intended for (low-income households). • Why does City Council have to approve PABs? Because PABs come from the federal government and the City has an internal process for deploying them. • Are PABs tracked? AFFORDABLE HOUSING BOARD REGULAR MEETING 1 /4 /2024 – M I N U TE S Page 4 Yes, there’s a formal process for tracking PABs that must be completed every year. Developers must report on what’s come in, what’s gone out, and who it’s gone to. C. Retreat Planning for January – John Singleton and Sue Beck-Ferkiss • The Affordable Housing Board Retreat will be on Friday, January 12 from 11am-3pm at the Fort Collins Museum of Discovery. James Redmond from the Communications and Public Involvement Office (CPIO) and Ted Hewitt from the City Attorney’s Office will be joining the Board for a portion of the retreat. The Board will be using the retreat to plan for the upcoming year and focus on themes such as communication, education, and outreach. Board members were encouraged to come to the retreat with questions for James and Ted, and ideas about potential focus areas and activities for 2024. D. Board Member Ideas • None. 6. BOARD MEMBER REPORTS a. Meeting Logistics • The Board will continue to have hybrid meetings for the remainder of 2024. b. Liaison Reports • Sue Beck-Ferkiss explained that board elections typically occur in March, but with the board terms changing, there is more flexibility. Since new board members will be onboarded sometime this summer, the Board agreed to keep the current Board Officers through the summer and hold elections in either August or September. Sue will communicate this information to the City Clerk’s Office. 7. OTHER BUSINESS None. 8. ADJOURNMENT Meeting adjourned at 6:10 PM.