HomeMy WebLinkAboutMemo - Read Before Packet - 1/23/2018 - Memorandum From Julie Brewen, Housing Catalyst, Re: Affordable Housing Capital Fund - Agenda Item #3January 23, 2018
Honorable City Council
City of Fort Collins
300 LaPorte Avenue
Fort Collins, CO 80521
Re: Affordable Housing Capital Fund
Honorable Council Members,
On behalf of Housing Catalyst Board of Commissioners and staff, I am writing to
recommend flexible and immediate use of the Affordable Housing Capital Fund.
As you may know, Housing Catalyst is working on our community’s second
significant Permanent Supportive Housing development similar to the very
successful Redtail Ponds. We seized the opportunity and successfully secured
the first-in grant of $750,000 from the Colorado Division of Housings new source
of funding from the State Legislature’s marijuana sales tax revenue. This money
was earmarked by the State Legislature specifically for development of housing
for formerly homeless people.
The new development will consist of 60 apartments, which is the same size as
Redtail Ponds. The services will be similar, and like Redtail Ponds at least 15
apartments will be specifically for Veterans who have been experiencing
homelessness.
We will be lining up additional “gap” funds over the next few months in
preparation for submittal of our application for the highly competitive Low
Income Housing Tax Credit (LIHTC) funds in late spring. This is a great
opportunity for our community, and we have been hopeful that we will be able
to utilize the City of Fort Collins Affordable Housing Capital Fund. We believe
that this development is exactly what was envisioned by many people when the
local sales tax measure was passed.
The City’s Social Sustainability staff has been working on the mechanism for
activating these funds and will be presenting options to Council. We are very
concerned about the timing of the formal program, and therefore respectfully
ask that you consider moving quickly to make these funds available for the new
January 23, 2018
Work Session Agenda Item #3
Permanent Supportive Housing development. Again, with a spring LIHTC
application which will be extremely competitive, a local funding commitment
that demonstrates our community’s joint commitment to addressing
homelessness will help strengthen the application and help the project more
likely obtain the needed housing tax credit award.
It is our understanding that one of the recommendations of the Social
Sustainability staff will be to use the Fund as a “last-in gap filler”. The Affordable
Housing Capital Fund can be very impactful as a flexible fund, but it needs to be
“first-in money” rather than “last-in money” for the following reasons:
• It is extremely important for all of the majority funders that the City first-
in money is a catalyst to leverage other critical funding. City first-in
money shows the project’s readiness to proceed which helps scoring in
the competitive process.
• The Colorado Division of Housing (DOH) has historically been the “last in”
funder and has worked that out with CHFA. DOH and CHFA both have
always looked to the locality for first-in support.
• In the case of a Permanent Supportive Housing (PSH) 9% tax credit deal,
this will be an extremely competitive funding application round and will
require that all other sources be lined up. Last-in City money will not
help in this respect.
• Lenders would typically require such “gap” be sourced which would limit
the amount of debt that can be carried for the development.
• Never in the course of the Affordable Housing Capital Fund on the ballot
were there conversations that this money must be “new, innovative, out
of the box”. It was all about affordable housing development, and in fact
in the beginning it was all about the importance of Permanent Supportive
Housing.
• The City of Fort Collins Affordable Housing Fund mechanisms work. It’s
just the timing that could be adjusted.
• All City support should come as early as possible so we can show
neighboring residents and businesses, as well as the community as a
whole that the City is supporting our effort, whatever that may be.
• CHFA and DOH do a great deal of review and underwriting, it could be
counter-productive to have an additional “third party” underwriting as
well.
• The important thing is to fund viable, financially stable (not over-
leveraged) developments.
I look forward to continued discussion. Please let me know if you have any
questions.
Sincerely,
Julie J. Brewen
CEO