0:00
all right everybody uh it's now 2:04 so let's go ahead and get started just so we can be respectful of everybody's time
0:05
here um so first of all I just want to thank everybody for taking time out of their busy days to join us to talk about
0:10
this really important resource that the city of Charlotte has to support the affordable housing um mission of the
0:16
city um so today you're here to join us for a um high level overview of the
0:22
housing trust fund and so we will spend uh the bulk of today's time talking about that and we'll end with a Q&A at
0:28
the end um if you have any question questions along the way or if you're having any technical issues please put
0:33
those questions or concerns into the chat uh we have three other staff members here from the city of Charlotte
0:38
who will be monitoring that and can who assist who can assist if needed along the way uh before we get started though I do
0:45
want to take a second to acknowledge any elected officials who are in attendance um we had a number of council members who RSVP to attend uh and so I would
0:53
like to thank them for uh their presence today in support of this um this important initiative and so as all of
1:01
you um likely know by now this is part of an ongoing faith in housing engagement series that uh the city's uh
1:08
housing and Neighborhood Services Department is offering uh in terms of better understanding the resources that we have here internally at the city and
1:15
understanding how uh members of the faith community can get involved and what role that they can
1:24
play and so before we we dive in um to the the meat of the subject uh let's
1:30
over an agenda of what we'll be discussing today um one thing I do want to note though from the outset though is that this presentation is being recorded
1:36
um so if you um are having trouble keeping up taking notes or anything like that that is a okay um the recording
1:43
will be made publicly available as well as the presentation um and so do not feel stressed about
1:56
that okay uh so on the agenda today we'll start out with level setting um understanding kind of the basics and the
2:02
background here of of of why we have a Housing Trust Fund and um as well as the
2:08
overall um affordable housing crisis that we have here locally which is not just a local problem but a regional
2:13
National problem as well and then we'll talk a little bit about the math problem that is affordable housing
2:19
development from there we'll go into the Housing Trust Fund in general the history and basics of what it is and
2:25
then um also what it's not right so specifically about what it's not because there's there's quite a few misconceptions about what the Housing
2:31
Trust Fund is and what it is not so we'll go over those as well and then we'll take some time to
2:37
walk through the mechanics of the Housing Trust Fund specifically how it works what the schedule looks like as
2:42
well as any requirements that go into that okay and then we'll wrap up with how faith-based organizations can get
2:49
involved and talk through some of our future sessions before then transitioning into the Q&A portion of
2:54
today's event
3:01
so first let's just talk about what affordable housing is right so affordable housing is for everyone whenever we're talking about affordable
3:07
housing in here today we're talking about um folks that and those who need affordable housing we're talking about
3:12
individuals that you interact with on a daily basis individuals who are in your family um individuals such as yourselves
3:18
right there's going to be a lot of folks who are covered in today's session that are eligible for the affordable housing
3:23
products that the city of Charlotte supports so we're talking about childcare workers we're talking about construction workers nonprofit Employees
3:30
Healthcare workers um our custodians and maintenance staff teachers and other educational support folks folks who work
3:37
at our coffee shops and our um our grocery stores the folks who drive our buses and um also critically and
3:44
importantly our veterans seniors and other disabled uh individuals who are in need of Housing and that the market is
3:50
is uh struggling to keep up with that
3:56
demand so ultimately what do we mean when we say affordable housing right just talked about how affordable housing is a need across the Spectrum but what
4:02
do we mean whenever we're talking about affordable housing right quote unquote so it's going to depend right there's
4:07
really two definitions of what affordable housing is there's the technical definition right which is housing that is Affordable if it costs
4:14
no more than 30% of your income so again that could apply to anyone right anyone
4:19
who is um spending more than 30% of their income on housing is is what we would consider housing burdened and so
4:25
there's a need for um you know affordable housing across the income Spectrum
4:31
but then there's also the common understanding right and that's what we're primarily going to be talking about here today and that is housing
4:37
that is priced to be affordable to households earning up to 80% of the area median income right I think this is
4:43
really important to understand whenever we're talking about affordable housing here today of what we're talking about we're using this common understanding so
4:49
it's housing that is priced to be affordable the households earning up to 80% of the area median
4:57
income and so you might be asking yourself what's the area median income right what is that so whenever you're
5:02
thinking about the area of median income what I would encourage you to do is to think about if you lined up every household in the city of Charlotte in
5:08
order from the least to most income the area medium income is going to be that household in the middle right so that is
5:15
the area median income right the the very middle of the income Spectrum across the city of
5:22
Charlotte so why is this metric important well we talked about that a little bit briefly on the on the previous slide but it's important
5:28
because it determines eligibility for affordable housing and it also establishes what is considered an affordable rent or price um if you're if
5:36
you're looking at a home to buy right so the Ami determines eligibility and it also sets the rents and prices that
5:43
individuals can expect to pay
5:48
right so why do we have a Housing Trust
5:53
Fund and one thing I do want to point out as we as we move through this you're going to see some images um throughout the presentation right such as the ver
6:00
GL 7th here um all of these images are going to be um photos depicting a Housing Trust Fund supported development
6:06
um that includes a faith-based component so in some there's a faith-based component in
6:12
terms of it's either built on uh land that is owned by a faith-based institution or the faith-based
6:18
institution is providing some level of wraparound support services or financial support um and and we'll kind of walk
6:25
through towards the end about all the various ways that folks can get involved and these projects that you'll see
6:30
throughout the the presentation represent that that level of of involvement
6:36
okay so we have about a Housing Trust Fund because we have an affordable housing crisis and so you're going to
6:41
see on this slide there's this pretty um you know uh there's this chart here and what you really need to take away from
6:47
here is that um ultimately what's happening is that housing costs are rising at a much faster rate than
6:53
incomes are here locally again it's not just a local issue it's a regional issue and a national issue um
7:00
and so with that right we're seeing here that the minimum wage uh in the city of Charlotte and North Carolina in general
7:06
uh has maintained uh you know the status quo for the past decade plus right however
7:12
we can see that um housing costs um are rising uh pretty significantly and so
7:18
that creates a real Gap in terms of of um affordable housing options for folks at are uh at the lowest end of our
7:25
income Spectrum as well as all the way up to you know um that that Middle Point
7:30
right even even folks making 100% of the area un income uh you know they're quickly seeing that there's a supply
7:36
issue and to that point you're going to see another chart here right and the main takeaway here is going to be that
7:41
we have a limited Supply right the supply of units that are deemed quote unquote affordable are um increasingly
7:49
or increasingly harder to find right so a lot of these these units that are being constructed are at the higher end
7:55
of the income are meant for folks at the higher end of the income Spectrum which creating a real challenge for folks
8:01
right there's not just a limited supply of housing across the Spectrum but there's an acute limitation in terms of
8:06
Supply at the lower income of at the at the lower end of the income spectrum and
8:12
then compounding this problem is that um as we all know charot a it's a fantastic place right it's a lovely city and uh
8:19
that's becoming increasingly um clear as we've seen our population increase
8:24
pretty dramatically and so whenever you have an already limited supply of of affordable housing options but an increase population that's only going to
8:31
make that Supply issue even more um strongly felt by those who are in need
8:36
of affordable housing so then the question you're
8:42
probably asking is why why don't developers just build more affordable housing right we hear that quite a bit
8:47
um you know if if it's if it's a supply and demand issue right we have a really high demand for affordable housing but a
8:53
limited Supply that would seem to suggest that um you know the obvious solution would be to build more housing
8:58
so why don't we well ultimately it's going to be a math problem right so affordable housing I
9:04
mean the real takeaway here is that affordable housing is ultimately not that much cheaper to build than market rate housing right there are some
9:10
marginal differences that you can make right in terms of like kind of at the fringes of the development budget but
9:16
overall it's still going to cost x amount of dollars to to construct um housing whether it's uh set aside for
9:22
families at the lower income of the spectrum of the housing Spectrum or at the higher end of the area median income
9:27
Spectrum so even for these nonprofit and other Mission oriented housing developers the
9:33
income produced by affordable housing is ultimately not enough to support the cost to build and maintain it right so
9:40
I'll say that again so even for nonprofit and other Mission oriented housing developers right so folks who are um you know specifically in this
9:47
industry to build affordable housing to meet this social need the income that's produced by those affordable housing units is ultimately not enough to
9:54
support the cost to build and maintain it without some level of financial support
10:02
so then we have to start looking at well how do developers timately pay for affordable housing right and so we can start this by just asking in general
10:08
well how do you pay to build housing right and and kind of the mechanism here is the capital stack right and so the
10:14
capital stack U for traditional market rate developers are using a combination of debt and
10:20
Equity okay and that constitutes the capital stack which is then used to pay for the Housing Development
10:26
itself so Equity is an ownership state it's the portion that's owned outright it can come from the developers own
10:32
investment or from outside investors right there are um private Equity investors there are uh more
10:39
mission-driven Equity investors that provide or require below market returns on their investment that makes that uh
10:46
math a little bit more flexible U But ultimately um it's the portion that is
10:52
the ownership stake of the development itself and then we have debt so debt is
10:58
the money that is borrowed uh typically from a bank or another large financial institution and it needs to be paid back
11:03
over time typically with interest and as you may know interest rates are are quite high right now so that's creating
11:09
an even um greater strain on the housing production um not just locally but
11:14
regionally and nationally and then the real takeaway here is though that the amount of debt
11:20
you can attract is ultimately dependent on the projected value of your project and the value of your project is going
11:26
to be dependent on the rents that are being produced right so the income that coming in from the project is going to
11:31
determine how much debt you can attract and so if you are making less money because you are charging lower rents
11:37
you're going to attract less debt ultimately right and so that is where we start to see some
11:44
issues and so we're looking here at a uh comparison right so which development is likely to get a larger loan right a 100
11:50
unit apartment building with $2,000 rents or a 100 unit apartment building with ,000
11:55
rents right so you have on know example a over here which is more typical of a market rate development and then over
12:02
here you have the affordable development right and so ultimately the market rate development is going to have
12:08
uh a larger debt capacity than the affordable development and therefore it's going to receive a greater level of
12:15
debt and so ultimately what that leaves us with though is that we have a really
12:21
large gap to fill right and how do we fill that Gap right so we know that we have less debt what does the equity look
12:27
like so by F in order to fill the Gap we really have to start talking about the
12:33
the tax credit program whenever we're talking about multif family rental development uh so the litec program
12:38
provides Equity to support the development of affordable housing um and just to give you a little background
12:44
information here the low-income housing tax credit program which is commonly referred to as the litech program um
12:51
allocates federal tax credits to State Housing Finance agencies um and in our case that's the North Carolina Housing
12:57
Finance Agency which then Awards these credits to private developers through a competitive application
13:04
process so we have the debt that we're able to attract right The Limited debt and then we have the tax credit program
13:10
which provides a Prett sizable portion of equity and that ranges anywhere from 30 to 70% of the total cost typically uh
13:17
but nevertheless with Rising costs it's still not enough and so we still have this
13:25
Gap and the Housing Trust Fund ultimately steps in to help close that Gap
13:30
okay that is the the main takeaway here in terms of what the Housing Trust Fund is it is a gap financing tool and we
13:37
we'll go into that a little bit more in depth here
13:43
momentarily so what is the Housing Trust Fund so the history and Basics here the
13:48
Housing Trust Fund was created in 2001 um and the HTF is the city's primary tool for creating and preserving
13:54
affordable housing this includes a broad range on the U on the spectrum of of uh
13:59
the housing Continuum right so it includes rental housing it includes home ownership opportunities and it also
14:04
includes support of housing through shelter beds and so this is funded by voter
14:09
approved affordable housing bonds and that's typically occurring every two years right so every two years if you're
14:15
a resident of the city of Charlotte and you vote you'll see about initiative um
14:20
asking whether or not you would like to support the um funding of affordable housing um bonds right that is what the
14:26
Housing Trust Fund is ultimately whenever you're voting on that is determining whether or not you're supporting um the housing trust funds
14:34
initiative and then the city's init investment is leveraged with private sector funds through Partnerships with
14:39
developers and this frequently includes tax credits right so going back to the table that we or theuh chart that I just
14:45
showed you where we're looking at debt tax credits and then the hdf that is um more or less a simplified structure of
14:51
what our program looks like right so we're leveraging additional funds from outside of the city to help support
14:58
affordable housing production
15:03
and so as I mentioned earlier there's there's some misconceptions about what the Housing Trust Fund is and so we'll go over some of those right now of what
15:09
it is not right so the Housing Trust Fund is not a grant right the the Housing Trust Fund
15:15
provides loans not grants and developers must prove economic viability and demonstrate a repayment
15:22
strategy okay as as stewards of public funds uh we have to ensure that you know
15:27
our investments are impactful um that we are providing them to um you know
15:32
qualified borrowers and that there is a demonstrated um Pathway to developing
15:37
this this development as well as um continuing its operations right so loans
15:43
provide that Avenue for us to have continued involvement in our project and to ensure that the ongoing operations
15:48
are successful and the Housing Trust Fund is also not a rental subsidy or voucher
15:54
program this is something that we often hear about um and there's a a pretty large misconception about but ultimately
16:00
North Carolina General statute does not allow for bond funds to be used for rental subsidies there's a very specific
16:06
list of activities that Bond um funded programs can support and again the
16:12
Housing Trust Fund is a bond funded uh vehicle for housing production and we'll talk about what what those specific
16:18
activities are coming up shortly so the Housing Trust Fund is
16:24
also not a housing locational service this is something that we we get calls about quite frequently right f folks who
16:29
are in need of affordable housing who are seeking um guidance on where they could find that affordable housing and
16:35
while we do know of of developments through our our you know existing portfolio of the Housing Trust Fund um
16:41
we do not necessarily provide those Services directly what we can do however is if you call 211 and you're routed to
16:47
our department we will assist you with connecting you to the right resources who can assist you in those
16:52
efforts so again Housing Trust Fund is not a grant it's not a rental subsidy or voucher program and it's not a housing
16:58
locational service right we can direct you to folks who do all of those things but it is not what the Housing Trust
17:03
Fund is itself and then also another big misconception is that the Housing Trust
17:08
Fund is not a housing provider we do not own or operate any of the housing that we support okay uh we have ongoing um
17:17
compliance monitoring where we're ensuring that developments are continuing to serve the needs of the community as outlined in our loan
17:23
agreements and all the restrictions that come with it but ultimately we are not owning or operating um the housing um
17:30
that received these F These
17:38
funds so then again what is the Housing Trust Fund I alluded to this a little bit earlier but the Housing Trust Fund
17:43
is a gap financing tool right so we provide lowcost capital for the following activities we can assist with
17:50
construction costs right including Rehabilitation we can assist with infrastructure improvements or
17:56
installation and we can assist with property and land acquisition right that is the very uh
18:02
those are the discret categories that we're actually able to support activities in okay so if it doesn't fall
18:07
into one of those categories we are not eligible to support it through the Housing Trust
18:15
Fund so uh when should a development team apply for housing trust fund support this is also a big
18:24
question and so what you're looking at here is a very convoluted chart in terms of what the development process looks
18:30
like and how the Housing Trust Fund fits in I have a couple of uh grade out boxes towards the bottom and we're not going
18:37
to be spending a whole lot of time into those but I did just want to kind of give you an overview of the entire process right and so the overall process
18:44
starts with these these first three and we'll talk about those a little bit more in depth here uh but ultimately after
18:50
you know successful HTF application there are several other steps that go that go on and we'll we'll perhaps touch
18:56
on those at a at a later session but the first one here is site selection and acquisition so again these are all
19:02
things that must be done prior to coming to the city of Charlotte to request Housing Trust Fund dollars right so
19:08
first you need to identify a site you need to conduct market analysis and then you also need to conduct due diligence
19:14
right so this this spans a wide range of activities But it includes environmental assessments uh ensuring that the title's
19:21
clean right that you would actually own the property that you are proposing to um develop one and then also ensuring
19:28
that the land use and Zoning is compatible with what you're attempting to do right ultimately we do have land
19:34
use restrictions in the city of Charlotte and as does every jurisdiction uh that restrict what can and cannot be
19:40
built somewhere and then also site evaluation and some of these bleed into each other
19:45
and so there's there's certainly overlap uh but this includes topography soil conditions infrastructure and any legal
19:51
incumbrances right so ultimately you need to ensure that the site that you are proposing to do uh development on
19:58
Housing Development um clears some of these hurdles right some of these common hurdles right
20:03
topography if you're seeking to build housing on a site that has um quite a
20:08
bit of elevation changes that increase costs right those are those are added costs along the way similarly with with
20:15
soil conditions um we've had developments that have come through um and then we found out kind of um prior
20:22
during the application cycle U but the soil conditions are are really challenging right and that can be a
20:28
number of different things that can mean that there's environmental concerns with the soil or it can just mean that you know the soil is perhaps too loose to
20:34
actually support um large scale Housing Development on it and then also you need to conduct
20:41
Financial feasibility right so can you feasibly do what you are setting out to do with the financing sources that you
20:48
have um lined up or or or projecting that you will have and then ultimately
20:54
you need to secure the site right so you need to negotiate and execute contracts and then then you also need to hold
20:59
community and stakeholder cons or have Community meetings to consider community and stakeholder
21:04
considerations right um one of the big recommendations we would have is if you're looking to do development is that
21:10
you are having an ongoing conversation with uh nearby neighbors and stakeholders right to ensure that they
21:17
are kept up to speed um that they are aware of what's coming because um if you don't know already um attempting to to
21:23
build housing can be controversial right and so having those ongoing conversations
21:28
is really important in order to understand what the concerns of the community are and how you can potentially address them through your
21:35
development right so that's that's more or less phase one right so site selection and acquisition as you can tell there's quite a bit of activities
21:41
in there and this is really just like a high level overview of some of those they're they're much more detailed than this but just to give you a sense of
21:48
kind of where the process starts out and so assuming that you get through
21:54
the site SE site selection and acquisition stage there's a whole another stage of design and planning right so you've kind of ironed out some
22:01
of the initial wrinkles of of challenges that you're You're Expecting right you you've got land that's uh free and clear
22:08
of any title issues you have negotiated a contract to acquire it and then you move into the design and planning right
22:14
so conceptual design right so understanding the site layout the number and types of units that you're looking to build and then moving into the
22:21
architectural and Engineering right so looking at uh Consulting with um third
22:27
party specialists who are going to to provide drawings floor plans um mechanical uh Electrical Plumbing
22:36
design and then from there you would move into like the permitting and approval stage right so you have those those plans you submit them to the local
22:43
municipal government who reviews them and evaluates them and they would be ultimately the ones who issue your
22:48
permits that would enable you to legally do what you're setting out to do and at this point you are moving into
22:54
a more refined financing plan right you're getting cost estimates for construction you are uh Contracting with a number of
23:01
consultants and we'll I'll show you a list of kind of the um the wide array of
23:06
Specialties that go into a development and we'll talk about those but getting individual contracts with those folks um
23:13
setting out your agreements and then ultimately scheduling your project right um uh
23:19
budget and schedule are the two most important things for a developer and so having that schedule because ultimately time is money right is really critical
23:26
as well and there's an art to that as well understanding all the various pieces that come into Housing
23:31
Development and that can impact your schedule along the way and so let's say we get through side
23:38
acquisition we get through the design and planning we then have to secure our initial funding right so uh we talked
23:45
about it earlier about the capital stack right we have to find our partners to provide that Capital stack so we need to
23:51
develop a business plan we've identified our funding sources we' prepared our financial documents because ultimately
23:57
anytime you go to a fun they're going to want to see the the math problem solved right they're going to want to see that
24:03
you've done the math to ensure that not only can you afford to build what you're setting out to build but also can you
24:09
sustain its operations right for typically a period of at least 20 years
24:15
right and then from there once you have all those pieces together you actually go out and apply for that financing
24:20
right you apply for that debt you apply for that equity and then if you are pursuing tax credits that's a whole
24:27
separate process um and one of the things I I failed to mention earlier about the the tax credit program
24:33
is given how complex and sophisticated that program is and how how massive it
24:39
is in affordable housing development that is its own whole separate series of webinars right the tax credit program is
24:46
very complicated um very challenging to navigate and so that may be a topic of a
24:52
subsequent session in this faith in housing engagement series but suffice it to say tax credits are kind of the uh
24:58
Main Avenue for affordable housing development on the rental side of
25:05
things and so ultimately after all that you'll need to identify your legal council to negotiate all these complex
25:11
Financial agreements and then at that point you
25:16
know once you have all of those steps completed at that point you would be ready to submit an HTF application or
25:22
Housing Trust Fund application there's many steps to go through and there's many uh potential hurdles that you need
25:28
need to clear before making it to the Housing Trust Fund and I hope that just gives you like a high level overview of kind of the complexity of the work that
25:35
affordable housing developers do um and one of the big things to take away from there is is the level of risk
25:41
right all of those activities that we just went through cost money and ultimately you may get to a point where you determine this Project's no longer
25:47
viable right and at that point that is that's more or less money lost um so there is a significant level of risk
25:54
involved in Housing Development and just to get to a point where you could and consider applying for the Housing Trust
25:59
Fund let alone all the the pieces that that follow the application
26:07
process so let's say you've heard all of that you have um been advised of all of the challenges and the uh you know
26:15
significance of the scope of work that needs to be done to um you know apply
26:20
for housing trust fund this is what you would need to know right in terms of how you do
26:25
apply but before we do that let's just talk really again about development in
26:30
general development is a team sport and so developers um oversee the overall
26:36
process and they are what you would consider like the metaphorical head coach of a of a team right there are
26:43
many other players that are involved uh that developers must identify coordinate and manage and so you'll see on the
26:49
right hand side a list of just a a sampling of of the folks who are involved in a Housing Development Pro in
26:56
the Housing Development process you have have lenders and there's typically several um especially for affordable
27:02
housing and each of those lenders usually has an attorney including the uh developer themselves right there's
27:07
attorneys for essentially um all of those parties and then you have your more specialized experts who are
27:13
Architects and Engineers who are providing those plans you have your environmental Consultants to ensure that the um the site that you looking to
27:21
develop is is safe and um you know sufficient for Housing Development and for folks folks to habitate on and then
27:28
also insurance providers um I'm not sure if anyone's been been tracking the insurance Market but it's it's a really
27:34
um increasingly challenging Market to interact with uh insurance premiums are are rising quite substantially um and
27:42
that's really across the housing Spectrum but especially so at the affordable housing um level of of
27:48
development and then also you have some of your other Specialists as well your Market analysts your appraisers your
27:54
surveyors your general contractor right the folks who are actually going to build the product that you're proposing
27:59
to build and then also public officials and property management companies so again a wide array of individuals
28:06
involved and developers are really the metaphorical head coach in this
28:14
situation so the Housing Trust Fund application process though um first thing to understand about it is that
28:19
it's cyclical we don't have an open call for proposals um we have a um a cycle
28:25
that we run on it's typically twice a year there's usually one of the spring and there's one in the in the
28:30
winter right and so what that process looks like is that ultimately the city will issue an RFP and as you can see on
28:37
the right hand side this is a table of our most recent RFP issuance uh and RFP
28:43
just means request for proposal um and so you'll see there that we post our RFP last year uh November
28:49
16th and then from there developers are asked to apply uh at which time they do
28:55
and as you can see here um applications do about two months after the initial RP
29:01
uh but just keep in mind all of the work that has gone in prior to even submitting that application that we just went over right this isn't just a a
29:07
two-month timeline of finding out about funding opportunities and then applying right there are months if not years of
29:13
work that go into uh preparing an application that you are then able to
29:19
submit and so then after developers do apply the city evaluates those applications and then ultimately makes
29:25
um recommendations to city council who then reviews and makes Awards um to
29:31
Developers for their development uh projects next step is that the developer
29:36
would close on their financing and then almost immediately begin construction if not the same day probably the next day
29:42
or or the ensuing weeks and then the city's ongoing involvement from there uh
29:47
aside from issuing the funds along the way is monitoring the development throughout its entire life course of
29:53
that affordability period right so um for rental housing we have a minimum
29:58
affordability period of 40 years and so that means that the city will be monitoring that project to ensure that
30:04
it is meeting the target uh targeted audience for that development right so if they have committed to providing
30:10
affordable units for 40 years we are going to be monitoring that on an annual basis to ensure that they are still
30:15
doing that and then the last thing to note here is that the city's request for proposal schedule for Housing Trust Fund
30:22
is typically coordinated to align with the tax credit application deadline and that's just because tax credits are so
30:28
uh competitive and that often times to even be eligible for tax credits you have to have your full uh Capital stack
30:35
uh firmed up before applying and so knowing whether or not Housing Trust Fund dollars will be going into a
30:41
development is really critical to know um and to have that information available by the time the tax credit
30:47
deadline rolls around so that is why we we sort of align our RFP schedule with the task crit
30:56
deadlines and so then basic requirements um so these are just kind of like the
31:02
the first criteria that you would go through whenever you're looking at the RFP in terms of Are We eligible right is
31:07
what we're proposing to do eligible for what the Housing Trust Fund can support and so the first thing is that all of
31:13
the supported units must serve households earning up to 80% of the area median
31:18
income however we also require deeper affordability targeting um for rental developments and so we require at least
31:25
20% of the units to be set aside for families earning earning up to 30% of the area median income families earning
31:31
up to 30% of the area median income are considered extremely low income and they are the IND those are the families or
31:37
individuals that have the most difficult time accessing housing which is why we um make it a point to ensure that every
31:44
housing trust fund development that is a rental development includes set asides for those
31:50
families and then we also require long-term deed restrictions right so in exchange for the funding that we're
31:55
providing we want to make sure that it's being provided to families earning up to 80% of the area immediate income and we
32:00
also want to ensure that it's offered into the future right so for rental developments we require those
32:06
restrictions to be in place for at least 40 years and that is a that is a bare minimum right so I can tell you in our
32:12
most recent Housing Trust Fund RFP um the actual um restriction periods on
32:18
average were about 72 years so 40 years is the minimum but we're always pushing for more because we know that this is an
32:24
ongoing need it's going to be an ongoing need into the future as well and then for our home ownership programs
32:31
right for those developments that we support we require at least a 15-year period uh affordability period right so
32:36
if a family moves in and they ultimately decide to sell in year five let's say right that house would then need to be
32:43
sold to another family that would income qualify at that Ami Target
32:50
threshold and then in addition beyond the um set of side units at various Ami
32:55
points and the term of those restrictions um we also require um we have our
33:01
Charlotte business inclusion commitments that we require so these are to ensure that uh minority-owned women-owned and
33:07
small business enterprises have a fair shot at um supporting Housing Development right as contractors as
33:13
subcontractors Etc and so the requirements for those vary based on the size of the award um I believe in our
33:20
most recent cycle uh if you received an award of at least $2 million at least 13% of that award had to go towards
33:27
these n wsbe um organizations right and that's again to ensure that you know we're
33:33
we're meeting our our inclusion commitments um that we outline in our
33:38
request for proposals and then also we have source of income protections so if you're receiving City support including through
33:44
the Housing Trust Fund um we do not allow you to discriminate against families based on their source of income and source of income can mean a number
33:51
of different things right it can mean um you know governance support in some capacity but the most common that we're
33:57
talking about here is through the housing Choice voucher program so one of the things we will not allow is for for
34:03
families who receive a voucher to be discriminated against uh based on their source of income protection if the
34:09
development is receiving u city funding and then lastly we mentioned
34:15
this earlier is community engagement um while we strongly encourage developers
34:20
to engage in constant Community engagement um we do require at least one community meeting uh but again we
34:27
encourage every everyone to engage early and often to gain that level of support that's
34:35
needed and so those are just kind of the basic uh basic application requirements
34:40
um there's some others as well but those are really at a high level what the the most critical are um and then as far as
34:47
you know what the um application itself looks like it's it's these components right so there's a proposal narrative
34:53
and overview where you're just generally describing in narrative form what you were seeing to do and then we also
34:59
require references right so um one of the key things here is that you know given that these funds are are limited
35:06
right and that we are um you know it it requires a level of scrutiny and responsibility and so as part of that we
35:13
required uh the developers have references that can speak to their ability to carry out what they're
35:18
proposing right so ultimately what we don't want to do is make an award to a developer who um is is unable to execute
35:24
within a timely manner so again these references are able to speak to that and they they span a broad range of of of um
35:33
stakeholders right so um we're talking about other state Housing Finance agencies we're talking about other
35:38
Municipal governments that developers may have worked with um General Contractors so on and so
35:45
forth and then ultimately we're going to require financial statements regarding the development team right so ensuring
35:50
that um the development team that is um the lead sponsor of an application is uh
35:57
financially secure um that we're not going to be in a situation where in 2 years that that organization is has gone
36:03
belly up and it's bankrupt and then we have an issue on our hands with well what do we do with our our funding right
36:08
ultimately we need to claw it back and so we like to avoid that and in doing so we require financial statements that prove the uh solvency of of the
36:17
development team and then we'll also ask for basic organizational information right are you a 501c3 are you eligible
36:24
or are you uh certified by the state of North Carolina for that we would need to see that paperwork um as well as the overall
36:31
ownership structure right so what does the ownership structure look like who's involved um and and we analyze that
36:40
information as well right uh pretty thoroughly and then we'll also require an appraisal right we need to make sure
36:46
that what you're proposing to do um is going to appraise for what uh what can
36:51
be supported by debt and Equity right so that's that's a critical piece as well and then beyond that we're also
36:57
going to require development financials and we talked about these earlier anytime you go to a bank or a lending institution they're going to want to see
37:03
these things right they're going to want to see sources and uses which is basically the development budget right what funds you're using and how you're
37:10
using those funds that's sources and uses and then a profa and a performa is really just an uh an ongoing operational
37:17
budget right typically for 20 years and that's what we require here in house as well right to ensure that you are able
37:23
to cover your debt payments over the course of 20 years so that we don't get into a situation where in 12 years um
37:29
you know you're you're no longer you don't have the operating Revenue to support the debt or other operating expenses that you may
37:36
have and then critically we're going to require evidence of site control right it's really critical that if you're proposing to to build housing somewhere
37:43
that you actually are controlling the site that you're seeking to do that at and then uh we work with our planning
37:51
department here at the city of Charlotte where um you will have a coordinated submission where you'll submit your housing trust fund application
37:58
as well as your site plan and other um planning documents to that department
38:04
and we'll review those concurrently and then lastly your community engagement plan again we
38:10
encourage early and often uh but we do require that at least you have at least one um Community uh
38:21
meeting and so let's say you get through that process right you are in a position to submit your application you have have
38:27
met the basic requirements you have worked through the entire application checklist this is what we do on our end
38:33
right in terms of how we evaluate so first we're going to check to make sure that you're meeting those basic
38:39
requirements and one of the most important requirements is this what we call but for requirement and but for
38:44
really just means but for the city support this project would not occur right we are um what I would call like a
38:51
fund of Last Resort right you have exhausted all of your other financing options and at that point then it would
38:58
become um you know prudent to apply to the city right so we have that but for requirement to ensure that we're really
39:04
meeting a critical need uh that's a demonstrable need right you have exhausted all your other
39:10
options and then also critically uh that you're supporting the city's affordable housing policies and goals all of those
39:16
requirements or all those goals and policies are outlined in the RFP um and so I would encourage you to take a look
39:22
at that we can send out that link as well and then Financial feasibility so after you submitted all the that the
39:28
financing plan um our team will take a look at those documents and ensure that you're meeting sort of our our
39:33
underwriting standards and we'll talk a little bit about those underwriting standards but that's it's a little bit
39:38
more of an advanced subject than today and then again we'll also look at the developers cap capability and
39:44
experience we'll review those references we'll review that portfolio of developments that they have um conducted
39:50
what their their development pipeline looks like uh to ensure that um you know
39:55
the folks who are uh applying for the funds are going to be responsible stewards for them and then can also effectively execute on what they're
40:02
setting out to do and then a really critical component is the site location right um if you
40:09
live in the city of Charlotte I'm I'm sure you are are aware that it's it's a little bit more difficult to develop
40:14
housing in certain parts of the city than it is others right and that's for a number of historical reasons um but we
40:20
have uh you know targeted areas in our in our city where we are seeking to encourage and support affordable housing
40:27
development those are in our corridors of opportunity those are in Council District Six and 7 um those are along
40:34
the um the blue line right we're we're always seeking to support targeted Investments um in those in those areas
40:41
to ensure that um families at the lower income at the lower end of the income Spectrum are able to access all those
40:49
that wealth of of resources and amenities and then also timeliness right
40:54
one of the really important things as I mentioned earlier is that there's there's budget and there's schedule right we look at the budget for from a
41:01
financial standpoint but we also look at the schedule as well to ensure that you are meeting um the needs of our
41:06
community as quickly as possible Right in a responsible time frame as
41:12
well and then um lastly is the number of affordable housing units and the
41:17
targeting of incomes right we talk about the basic requirements but again those are really just basic requirements we
41:24
we' always like to see uh folks going above and beyond to meet even more uh
41:29
more of those families who are at greater need so we look at all of those things collectively and there's some other pieces that go into the evaluation
41:35
as well but these are really from a high level the most important whenever we're taking a look at at the various
41:40
applications that we receive so let's say you get through the application process you've been
41:46
successful you have been awarded Housing Trust Fund dollars what does that look like right what does that Housing Trust
41:52
Fund loan look like we've talked about earlier that it's not a grant it is a loan so what does that look like so we
41:57
offer soft financing um so we provide below Market interest rates typically between 1 to 2% although it does vary it
42:05
sometimes it's below that and sometimes it's above that and we offer flexible terms you know typically our loan terms are are 30 years um but typically
42:13
anywhere over 20 um but we are flexible with our borrowers to ensure that um you know our funds are being put to good use
42:20
and that we are um as supportive as we possibly can be in a responsible way and then we also require a debt
42:27
coverage ratio of 1.15 so what does that mean so basically it means if your annual expenses to keep that development
42:34
operating right to keep the lights on to pay for the maintenance to um replace uh
42:41
you know washers and dryers that have gone out or what have you if you know those annual expenses are about a million dollars in in round numbers then
42:49
your income must be at least $ 1.15 million right and that's just to ensure that there is a cushion right in case
42:55
something goes wrong that at the end of the day if something does go wrong you'll still have a little bit of a buffer there to pay your debts to pay
43:01
your bills and that we don't get into a situ excuse me that we don't get into a situation where uh the development is
43:07
going bankrupt or is is at risk of being um
43:12
sold and then lastly our debt service is is typically cash flow contingent again that's to provide an additional layer of
43:19
of buffer for developers right ultimately at the end of the day our main interest is to uh provide a very
43:25
critical need of affordable housing to families um and so there are times where we are
43:30
flexible on our our debt service payments where um we can defer those until um you know the developer has has
43:37
made up any any um uh cost that may have have Arisen in
43:44
the past year or so so again it's soft financing we do have a uh a pretty hard
43:50
debt coverage ratio though uh but we are flexible right flexibility is the name of the game with the Housing Trust Fund
44:00
and so important notes as we kind of like round the corner here and get close to wrapping up so the Housing Trust Fund
44:05
is a critical but ultimately it's a small part of the development process in capital stack I can't say enough about
44:10
how important the Housing Trust Fund is but again as you saw in that development process ultimately it is a very small
44:17
piece and small step in the overall process we're also the last piece of capital that's needed right you have
44:23
needed to exhaust all of your other financing options before coming to the city of charot and requesting Housing Trust Fund support right you have to
44:30
have that debt and Equity those primary sources of debt and Equity before coming to the city of Charlotte we are not a
44:35
primary debt uh vehicle right we do not provide the largest Loan in our deals we are a smaller Gap fund uh financing
44:44
piece that that closes that Gap that we mentioned earlier so in other words there are
44:49
going to be many other questions and challenges that developers must answer before seeking the Housing Trust Fund support and the questions below are
44:56
really just uh a small sample size of all the questions that must be considered right so do you have the
45:01
experience and capacity to navigate this complex process uh do you have other hard financial commitments to cover at
45:08
least 80 to 90% of the total costs right again the Housing Trust Fund is usually a small piece and it's typically a small
45:13
piece of around 20 to 10 or 10 to 20% of the total costs and then is your proposal possible
45:21
given you know the various laws that regulate Housing Development right are you meeting the the zoning requirements
45:27
uh and those other uh land constraints right so again just a small sample of
45:33
questions that have to be answered uh before applying to the Housing Trust
45:39
Fund and so you might be asking yourself okay that's a lot right uh we are a a faith-based institution real estate
45:45
development is not necessarily our our special our specialty uh but we still want to get involved right and there's
45:51
there's many of ways to do so right so there's three fundamental components of real estate development those are land
45:57
capital and labor right um if your organization is able to support any of those three that's fantastic right I
46:04
mean those are the three biggest pieces of housing development in general but especially for affordable housing uh but
46:10
there's also just as many other important ways that you can get involved as well right and these are really critical just as critical uh providing
46:17
Supportive Services or Pro or partnering with an agency that can uh providing rental
46:22
assistance providing housing navigation right assisting those low-income families who are in need of affordable
46:28
housing but are having difficulty navigating the very competitive um affordable housing market right uh folks
46:35
who are able to assist and lighten that burden um are are very critical and so those are those are a type of of
46:42
activities that we would support and encourage and then perhaps most importantly is Advocate right advocating
46:47
for affordable housing um your presence today is a huge step in that in terms of
46:53
of of demonstrating that advocacy um and then there's there's many other ways as well right these are just this is just a
46:59
small sample size of how you can get involved uh but again we just want to thank you for being here today and being
47:05
part of it because I think that is um as critical as any of the others right is is lending your support being a voice
47:11
for affordable housing development um and helping our our neighbors who are most in
47:20
need and so um you know that's going to wrap up today's Housing Trust Fund 101 session we will move into a um Q&A
47:28
session here momentarily um but keep keep a lookout for for future sessions
47:34
um we're looking at having one scheduled here soon for land use right we touched on that very briefly today uh and then
47:39
we'll have some others uh in the pipeline as well coming
47:45
up with that being said I will stop talking and I will uh kick it over to um
47:51
my colleagues who have been monitoring the chat for any questions that may have come up hi great job Michael thank you uh we
47:59
have a few questions in the chat the first question was will we receive a copy of these slides and the answer to
48:05
that is that they will be posted on the faith and housing web page uh you can get to it by going to charlot nc.gov and
48:13
searching for faith in housing and the web page should uh pop up and we will be
48:18
posting this whole a recording of this presentation on that web page uh the
48:24
second question is uh from Laura cell and she asked who oversees the tax credit
48:30
program yes a great question so the tax credit program is administered by the state's Housing Finance Agency and uh
48:37
they have a very creative name right the North Carolina Housing Finance Agency so uh they're more commonly known as nchfa
48:44
uh but they are the institution at the state level that um oversees the
48:49
application process for tax credits and then ultimately makes those Awards so great
48:55
question thanks next question is from uh Maxwell CR dulo uh his question is what
49:01
is the Ami level for home ownership units it's 80% for rental is it higher
49:07
for home ownership so that's a great question so um I I need to caveat that by saying
49:13
that the city of Charlotte um specifically housing and Neighborhood Services has a number of programs that support a variety of initiatives and the
49:19
Housing Trust Fund is but one um so for the Housing Trust Fund the support that we are able to provide is capped at the
49:26
80% Ami threshold um and that's by North Carolina General statute right so North
49:31
Carolina General statute has some very um strict rules about how funds can be used right not just in terms of like
49:38
construction uh infrastructure and acquisition but it also caps like who
49:43
support with those funds so for the Housing Trust Fund it is going to be C at 80% of the area median income but we
49:49
do have other programs such as our house Charlotte down payment assistance that's able to support families earning up to
49:55
110% of the area medum income but yeah great question but for Housing Trust
50:00
Fund regardless of the um typology of housing you're looking to build or
50:06
construct our support would only be able to go towards those units that are set aside for families earning up to 80% of
50:12
the area medium income thanks uh next question is from
50:18
Kelly Sherer uh oh well she just made a comment to sayg great job describing the
50:24
basics thank you uh well thank you thank you for being here I appreciate that
50:30
yeah next question from Greg Jerel uh is there a rubric for grading those applications if so how is it weighted
50:37
around the various categories and Maxwell culo uh seconded that question
50:42
and added um decides on it and what uh that is and can Council override it or
50:50
deviate from it yeah so great question that's that's kind of a complex one to dive into for a
50:55
101 class but we will uh we'll do our best shot here so ultimately Council are
51:01
the U Arbiters of who does and does not receive funding so um housing staff uh
51:06
myself included uh what we do is make recommendations to city council based on our analyses and then ultimately city
51:12
council are those um those entrusted with making decisions about how to make those Awards so again staff make get at
51:19
uh recommendations and advise city council makes decisions um but as far as your question
51:25
about what does the scoring look like um the way I would describe it is it's it's part art and part
51:30
science right so we do have a um scoring system that factors in all of those
51:36
various pieces that I mentioned earlier uh but it's it's not necessarily that like mathematical formula that I think
51:41
you may be thinking of um and that's where the art comes in right so understanding kind of like our uh
51:47
priority of needs and adjusting based on that um what I can tell you is that we
51:53
are typically looking to support as many developments as possible Right we're not looking to kick developments out um
51:59
ultimately what we are doing though is making responsible recommendations to city council based on what's been um
52:05
proposed and so um as long as you're meeting our basic requirements and you are um demonstrating capacity experience
52:13
and ability to execute um then at that point you know you're looking at a pretty competitive award um but again
52:20
whenever we get to um just as an example so in our most recent cycle of Housing
52:25
Trust Fund um Awards uh we were operating with a pretty low um remaining balance in our
52:32
Housing Trust Fund um so that was the balance that was initially uh capitalized in 2022 or when that fund
52:39
started was in 2022 and so as we were getting to the tail end of 2023 so the end of of
52:45
uh uh I'm sorry getting towards the end of of of that term uh we were running low on funds and so at that point it
52:52
became a little bit more of a um how do we how do we make recommendations that
52:57
would maximize the remaining amounts of funds right if we have a de let's say we had hypothetically $5 million remaining
53:04
and we had one development requesting 7 million um and we had two others that were requesting a combined four million
53:11
right I I I think the decision becomes pretty clear uh there in terms of like how that decision would be made right
53:17
the obvious answer being that we wouldn't have enough funding to support the $7 million development there but we would have enough to support the other
53:22
two so that's where the art of the process comes in um but again um you know we're looking at all of those
53:28
individual metrics individually and we're also introducing new metrics right to include U return on investment from a
53:34
social standpoint right so maximizing the benefit to um the families that we're seeking to support um and so all
53:41
of that information is um included in our um proposals to council and so if
53:47
you've seen any of the City Council meetings where they're going through the recommendations those will include sort of our our um a high level overview of
53:55
how we're analyzing development and like what those key metrics are but great
54:00
question thanks next question from faith trigs is can you provide a quick update
54:06
on the next housing Bond measure and what this group needs to be aware of yeah that's a great question so um
54:14
you may have heard in the news that there is a um bond proposal for this
54:19
November's um election cycle and the proposed bond is for $100 million so
54:26
from 2018 to 2022 every two years so 2018 2020 and 2022 that Bond was $50
54:32
million each of those those Cycles uh and so in 2024 the proposed bond is for $100 million um so yeah I would I would
54:39
encourage folks who are on this call today to keep an eye on year out for that um and to um you know uh stay stay
54:48
tuned right stay tuned um if you're part of our our um our email list you'll receive updates as we have them uh but
54:55
right now I believe council is is actively um reviewing how to structure
55:01
the upcoming Housing Trust Fund and how to um perhaps potentially bucket those
55:06
funds for a variety of initiatives but yeah I mean the best piece of advice I would have regarding that in terms of what you need to know is just stay in
55:13
tuned stay plugged in uh whenever you receive emails from housing and Neighborhood Services be sure to take a
55:23
look and it looks like Kenny uh has his hand raised did you have a question
55:37
Kenny so just drop it in the chat I don't believe that the uh audio is turned
55:46
on participants
56:00
Faith trick said great presentation thank you thanks B thank
56:16
you guess we'll wait a few more seconds for Kenny okay here it is okay Kenny's
56:23
question is is it feasible for small or new developers to apply and who are the usual players in HTF
56:31
support yeah that's a great question so I mean it it's
56:37
um it's an interesting question that we are we are seeking to support smaller developers uh but one of the challenges
56:43
we run into though is the um you know capacity and experience levels that are kind of required um for those funds and
56:50
so examples of really successful um you know ventures of folks of of those smaller scale developers who are are
56:56
looking to get involved is is through partnering with uh more seasoned or experience developers to kind of gain
57:01
that um entry level experience and and knowledge of of the whole landscape of
57:07
affordable housing development that's really critical to success and so that's one potential Avenue um yeah I mean the
57:13
other is is is building up that level of capacity and experience to demonstrate um that you would be a responsible
57:19
Steward of those funds and that you have the ability to execute um but it's certainly something that we're interested in supporting um and I
57:24
suspect there may be a subsequent session here in the future about how smaller developers are able to get
57:31
involved um especially here locally um and interact with the Housing Trust Fund
57:36
um as far as like typical developers go um I would say yeah I mean there there are um you know consistent um returnees
57:44
to the Housing Trust Fund looking for support and those are all I mean publicly available um I we can um
57:52
potentially share share links to those um most recent cycles of who has applied and who hasn't I think that would be a
57:57
really good resource in terms of um you know helping folks in this community understand kind of the um the players in
58:04
the field if you will right not just developers but also attorneys um you know so on and so forth and I believe
58:11
and uh perhaps uh Harold or Leslie you may be able to speak to this and I apologize for putting you on the spot uh
58:17
but I I think there is an active effort to put together such a list um completely voluntary for folks to opt
58:23
into of course um but yeah I that's what I can say there but there are there there's a good mixture of folks who are
58:30
um repeat um uh folks to the Housing Trust Fund but we also every cycle have
58:35
have some newer developers that pop in as well and those span really a broad range right we have local nonprofits we
58:41
have National for-profits it it it spans really the whole spectrum of of um the development field a great
58:49
question to respond to Michael's question um we are in the process of creating a directory
58:56
um with all those resources and all of those contacts um so stay tuned as soon
59:01
as um we flush that out and have that first round um we'll publish that and
59:07
then we will continue to update that on a regular basis and we'll make it we'll make everyone aware of that resource um
59:14
as soon as it's available
59:23
fantastic was that okay looks like yeah that looks like the end of the questions
59:29
um if anyone else has any other questions you can reach out to us reach
59:35
out to Michael his contact information is on the screen um yeah thanks everyone
59:41
for joining yeah thank you again I greatly appreciate you all being here and supporting um so yeah please uh
59:48
there's a uh Link at the bottom of of the slideshow there I would encourage you to sign up there for any additional
59:54
announcements of any city funding opportunities so yeah again thank you all for being here um it's really
1:00:00
critical um that we bring in folks into this conversation about the affordable housing needs in the city of Charlotte
1:00:06
and um your your level of interest is is um you know inspiring so thank you there
1:00:12
was one question that did come in um and that is from Greg Johnson and he said
1:00:18
could one of the resources in that directory be an example of a successful comprehensive application
1:00:27
yeah I mean I think that's a great idea that's something that we should certainly consider um yeah and if you have any other ideas about what would be
1:00:33
helpful moving forward um you know this is a today was obviously kind of a a one-sided conversation in terms of of me
1:00:39
doing a lot of speaking but we would love to hear from you so if you have any ideas or thoughts about how we can um
1:00:46
you know better support you uh please reach out uh my email is listed there um
1:00:51
reach out via the the faith and housing uh website as well um I think all of
1:00:57
those those insights and and questions that you have will be really helpful in terms of us um you know strategizing
1:01:02
moving forward about what to offer and what to provide so I think that's a great
1:01:11
question and we see Lana Mayfield council member Lana Mayfield in the chat did you um have any words for us
1:01:34
she said you all are doing an amazing job awesome awesome well that looks like
1:01:39
that's it for all of the questions again uh feel free to reach out to us uh if
1:01:45
you need any further information and check the faith and housing web page on
1:01:50
charlot nc.gov for uh future updates and resources and additional material
1:02:00
awesome well thanks Harold thanks Leslie uh thank you Janine for all of your assistance today thank you council
1:02:06
member Mayo for being here and thank you all for being here it was a um I hope a uh informative time and uh yeah again if
1:02:12
you have any questions please reach out but thank you all for being here