Memorandum

City of Lawrence

City Manager’s Office

 

TO:

Thomas M. Markus, City Manager

FROM:

Britt Crum-Cano, Economic Development Coordinator

Diane Stoddard, Assistant City Manager

Casey Toomay, Assistant City Manager

Danelle Dresslar, Community Development Manager

DATE:

May 19, 2016

RE:

Visit with Kansas Housing Resources Corporation on Affordable Housing Topics

 

 

Staff visited with Fred Bentley, Director of Rental Housing Development at the Kansas Housing Resources Corporation on May 19, 2016 to gain insight into programs and approaches municipalities can take to address affordable housing deficiencies.

 

Below are notes on some of the existing programs and resources:

 

State Housing Trust Fund[1]

·         Typically available for rural communities having 60,000 or less population

·         Available to fund moderate-income housing needs

·         Baldwin City has been able to participate.

·         $2 million awarded statewide in 2012

 

National Housing Trust Fund[2]

·         New program developed as part of the recovery act (2008)

·         Funded through Freddie Mac and Fannie Mae programs 

·         Designed to assist lower-income populations. 

·         Provides $3 million to be used for housing provided to those earning 30% or less of Area Family Median Income (AFMI)

·         Housing must commit to 30 year compliance period.

·         Mr. Bentley thought that Lawrence would be an eligible area

·         Mr. Bentley suggested considering ways to leverage money to accomplish more. 

 

Low-Income Housing Tax Credits (LIHTC)

·         As per Mr. Bentley, the LIHTC program is extremely competitive.  Approximately 25% of all projects applying get approved for the program each year.

·         Lawrence has some LIHTC projects (Bethal Estates, Poehler Lofts), but is historically undeserved according to Mr. Bentley

·         $6.4 million of annual credit available for statewide needs

·         Mr. Bentley mentioned that it desirable to scatter LIHTC projects throughout a community, but the challenge is in finding appropriate, available land.

·         He mentioned there may also be other challenges (e.g. cultural preferences) within a community for siting a LIHTC project.

·         Mr. Bentley mentioned that a Neighborhood Revitalization Area (NRA) designation aids a project in earning points for program participation.

·         He thought that applying LIHTC to mixed-income properties can be complicated (e.g. ensuring compliance, marketing)

·         Mr. Bentley mentioned that a developer may find it hard to market units in a mixed-income project. For example, market rates need to rise even higher to accommodate lower rate units and they may be not be as easily sold/rented. There may not be enough demand for higher-cost units if the project is known to contain affordable housing units—either on the part of selling the credits or marketing the units.

·         LIHTC 20/50 Rule: 20% of units set aside for those earning 50% or less of AFMI

·         LIHTC 40/60 Rule: 40% of units set aside for those earning 60% or less of AFMI

 

Other Input:

Mr. Bentley thought adding affordable housing into mixed-use, downtown projects would be desirable and acceptable in Lawrence, which is not always the case within other communities.

Other agencies that may be able to help or provide more information:

·         Department of Commerce: Community development Block Grants (CDGB)

·         Federal Home Loan Bank

·         KDFA: If you wish to issue bonds

 

Resources:

Housing Assessment Tool (HAT):  HAT is a tool used to determine housing gaps.  (Mr. Bentley provided a HAT sample/guideline to the team.)

 

 


[1] Established in 1991, the State Housing Trust Fund (SHTF) was created by House Bill No. 2517 as a vehicle to deposit housing funds and provide necessary match for the Federal HOME Investment Partnerships Program.  Now codified at K.S.A. 2011 Supp. 74-8959, the SHTF legislation contains no designated funding sources and is essentially a discretionary, interest-bearing trust account for the purpose of administering housing programs and services.

 

[2] The Housing Trust Fund (HTF) is a new affordable housing production program that will complement existing Federal, state and local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households, including homeless families. The HTF was established under Title I of the Housing and Economic Recovery Act of 2008, Section 1131 (Public Law 110-289). Section 1131 of HERA amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) (Act) to add a new section 1337, entitled "Affordable Housing Allocation" and a new section 1338, entitled "Housing Trust Fund."