Faith in Housing

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hi everybody uh welcome to the city's uh faith and Housing Initiative Land Development 101 from faith-based
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organizations um I think we're just going to give it a minute or two to let folks get into the room and then we will
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kick things off e
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all right Liz I see some folks are still still coming in so we'll plan to kick off here in in just a minute does that sound
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good yep sounds great
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all right let's go ahead and get started well it's 12:02 um so let's um move into
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today's event and in the efforts to maximize time today I'll keep the introduction fairly brief but uh my name
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is Michael lart I am the housing trust fund manager here at the city of Charlotte and it is my pleasure to
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welcome you all today to our second event in the ongoing capacity building series uh for Faith and housing um so
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today's session will be on Land Development 101 so providing a high level overview of of Land Development
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and what that looks like especially for your faith-based organization um as I mentioned this is the second in a series of capacity
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building events and there are still events to come this month and the remainder of this fall and and leading
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into q1 of 2025 um so with that being said I will now turn it over to today's presenter
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the CEO and founder of give impact LLC Liz Ward thanks Liz thanks so much
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Michael um and can everybody see my screen
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um just want to make sure um so like Michael said um I'm Liz Ward um I know
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many of you on this call but there's um many of you I'm still getting to know and so just wanted to provide um a quick
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backdrop of um of my background um and what give impact is doing before we jump
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into today's goals in the agenda um but just a quick recap is that I've got um
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15 years of experience in real estate um finance and affordable housing development
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and four years ago I started um a firm called give impact that specializes on
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affordable housing initiatives um particularly those that focus on public private Partnerships so we've had the um
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benefit of being able to work with quite a few Faith um groups on deploying Capital land and buildings and so um
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within this initiative our current role is to help the city uh deploy resources to you um through their faith and
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Housing Initiative and so we're focusing on Three core areas you may hear me refer to which are around connect
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educate and Empower and so um this is kind of hits all of those buckets and um
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last week we had an inperson lunch and learn where um over 50 folks came together to um build connections and to
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um engage on this topic um the recording of this event will be available online
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and then we're going to host another inperson event um next week um on Thursday and so we'll talk more about
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that at the end um as a just this so This Is A continuing series um
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and so today um you know big picture um
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we are my goal is to help expose you guys to the development process um for a couple reasons one is it's very complex
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it can take a long time so it's really good to make sure you understand the various steps and phases that have
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developed vment goes through but also as you explore starting to work with developers or form a development team so
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you can understand the roles Everybody Plays um and the role that you would like to play in that process um but also
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so you can understand the risks that are taken on um and what developers are facing as they go through the process so
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um you know I don't expect anybody to become an expert after 45 minutes but it
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will give you enough to um to really help you understand what questions you need to be asking and to help you on
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this journey of um of of learning how to take steps towards reaching your goal of
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um providing more affordable housing and potentially um within your faith community so um I also wanted to stop to
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mention that there are a couple handouts that we put together um so Megan is going to put a link in the chat to our
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um faith and housing uh website um with the city of Charlotte if you scroll down under resources there are a
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couple of handouts that we're going to refer to um one is a key glossery of terms another one is some uh resources
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to um free tools that are available for land development we'll continue to add
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to these um as new information becomes available um and as we get questions and feedback from you guys but just know
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that that's out there as well as a copy of the slides that we're going to be going through and and um so next we're we're
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going to go through big picture what development is who the players are through some key terminology because I
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know we throw out lots of jargon all the time on this um and then we're going to go through the different phases in the
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development process and at the end we're going to wrap up with some key considerations that U faith-based
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organizations need to be thinking about um and how to proceed to uh the next
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phase um I will stop periodically for some questions and then we're going to try and take most of them at the end so
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as you have questions please put them in the chat um and then as we have time we'll pause to make sure that we have a
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chance to um to to interject that into the content um so
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first big picture what is development um we it's seem might seem like a silly
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question but there is some confusion sometimes because out in the real world um sometimes the word development means
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fun raising and so what we're specifically talking about is Land Development so it's the process of
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taking raw land um and turning it into a
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physical structure um and in this particular case we're talking about residential uses so either rental
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housing or for sale housing um it does also can include um turning um an
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existing building like a church um into um housing um and so you're taking it
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from one one existing use to another use and there are seven critical phases that
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um that folks go through when they're leading projects through the development phase um sometimes there's a little bit
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of overlap um between them but um going through it this way will help you understand the um kind of the distinct
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phases um and and some of the core questions that have to be answered in each of those um I will also add that
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there it can take a long time to go through um these phases we'll talk about
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that a little bit more at the end and I'll give examples um but for example um Mayfield
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Memorial Baptist Church um went through this process and it took um let's see
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they they identified the site uh roughly around fall of 2018 um and they broke ground in April
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of 2022 so it took about 3 and A2 years to get from site identification to
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breaking ground on the project um and then by the time it opened um and finished construction it was a total of
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about five years um um from from this phasee one until phase seven um some of
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the things that determine how long it takes to go through the process of whether or not resoning is involved that
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particular project did require resoning um there were also some um delays due to
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needing to redesign some of the buildings in response to soil conditions
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um and some tital um issues that that arose during the process and so there's
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just a myriad of of moving Parts in the development phase so again this is just
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to help you guys get your AR your arms around um the big picture process if
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anybody attended the um the faith and housing Summit which during the inperson
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session we we took like a show of hand and so this is a little bit different in the online format um but Gwen Garnett
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who um worked with uh St Paul Baptist said it took them about 10 years to go
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through this process um the shortest I've seen from site identification to
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opening was um about three years to go through the
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process um which was incredibly fast um that was the the mezzanine on freedom um
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project um with Covenant Presbyterian and they were just contributing Capital not land um although some other parties
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did um contribute the land via ground lease but that just gives you a concept of how long it can take to go through
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these processes um so I'm going to go to the next
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slide so here we want to talk about who are who are the people that are involved
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in the development process and I'm going to pause and say first that there is a different group of people that are
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involved in the ongoing operations of a building and so what we're focused on here is just really trying to focus on
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the folks that are responsible for helping it turn from um raw dirt into a
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physical structure now there's many many more people than are than are showed here but um when we use the term
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developer these are the folks who really have the expertise and understanding how to go through the process of Land
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Development they understand Finance they understand the legality of it um and how
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to get through City processes um so there's many people that come to the table that bring that varied level of
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expertise um but that's the role of the developer is to Shepherd that process
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and often to take on significant financial risk in that Pursuit um The
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Architects and Engineers are the designers that are responsible for
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um designing the project so Architects are who focus on the physical structure
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that you see um and the the inner workings of the inside of the building and um civil
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engineers are responsible for the land and the infrastructure so the roads the
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sidewalks um the underground pipes um all those kind of things and they help you make make sure you understand how
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traffic is going to move through through the site um there there's lots of intricacies when we're when we're
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putting these projects together both for uh for sale and for rental communities
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um and so those design partners are really important um they also often have to know um specific requirements related
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to funding sources often there are extra design requirements that uh can come from the state level or even the local
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level um if you are tapping into affordable housing funds and so it's important to have experienced teams um
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at the table from a construction standpoint um
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the most common termal here is general contractors so these are the folks that
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are hired by the development team to physically build and oversee the
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building of of the structures and so um
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there's many different ways to contract with those General Contractors to man manage and mitigate risk
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um but you'll hear that word um and um and so that's that's primarily their
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role they oversee often a group of subcontractors that have specialty
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focuses such as drywall framing um Plumbing all sorts of
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different things um but the general contractor is the is the one that kind of oversees all the different parties
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that are physically delivering Goods to the site and um and delivering them
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within the building um separately within the for sale space um you'll often hear
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the term Builders um so they serve often similar
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to a general contractor um in the rental space um but
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but there are Builders who have very specific product that they use and they repeat over and over and over again so
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they've got a lot of efficiencies in their design and in their specific product um and so if you hear the term
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Builder often that is in the um single family space um that is
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building a repeatable product um is the most common way that that term is applied
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um then we move into the legality um there are um attorneys who can help you
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with zoning and land use um controls or general real estate practices and
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contracts so um particularly around partnership agreements um but there are also
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separate attorneys who really specialize in affordable housing and they understand the intricacies of of deed
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restrictions of certain types of funding such as the low-income housing tax credit which we'll talk about in just a
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second um so it's just important to know if you're identifying um either third-party legal
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representation or legal representation within your congregation um or your Faith
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organization um is to ask people what type of law they practice and to make sure that when
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you're developing your group that you've got folks who have the right types of expertise based on the project you're
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you're pursuing um and the lenders and finance Partners um again there's a
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myriad of of folks who come to the table to help um build the project there's
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construction lenders uh there's long-term financing Partners there's um local agencies like the city of
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Charlotte who provide Housing Trust Fund and we often have state agencies who
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participate and so we'll share more information about these roles in the
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next lunch and learn so that as you guys start to think about who needs to be a part of your team um you can have all
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that information and start to know who some of the players are um not just what what they do um so we'll work on um
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continuing to give you guys information about that and on on this one um really I just
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want to point you to the handout um there's a lot of jargon used in the Housing Development
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space and so if you have a question that means someone else probably has a question do not hesitate to ask um or to
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ask people to abbreviate um or or elaborate on what abbreviations are um
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because often um you know the term litec you'll hear that a lot that stands for
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low-income housing tax credit um that is the primary funding tool that is used for rental
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housing um there's a lot of nuance to that um we've included that in the handout um Ami is something you hear a
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lot uh that's area meeting income that's kind of talking about um for uh the
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statistical area what the the median income is for a family of four and then a percent of that kind of defines what
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different financing programs um can serve different households and so all of
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that is in the handout um and I encourage you guys to continue to look at that and study that and ask the
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questions that you have and um I am going to start to head
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into the phases um Megan I want to pause and just see if there's any questions
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that have come in before I um I jump into these phases no questions that I've
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seen yet I will though invite everyone to use the chat box to submit questions
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as they come to you is just fine Harold and I will be monitoring those and there will be a couple times where Liz pauses
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and we can take questions sort of as she rolls that way she doesn't feel like she's talking to no one in this
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presentation and then we will also try to save some time for questions at the end so all those are all open to you but
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please use the chat box to send them to us that sounds great thank you so much
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um all right so let's jump in this is the first of the seven phases which is site identification it's the
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most important question is this site actually available um you know we can spend time
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dreaming and thinking and testing all day long but if it's not available it's a moot point and so that's one of the
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first questions developers ask is um you know does the land owner actually have
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interest in uh in conveying the land for development and under what means are
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they interested in like selling it outright or is there a ground lease um you know what is that going to
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look like or is there a partnership opportunity um and particularly within the faith organizations it's important
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to know who controls that decision-making who within your organization needs to be involved to
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make those decisions and identify that really early on um and it's different
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for each Faith organization and so I encourage folks um to talk about that both within their um their individual
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organization and if you're part of a broader organization to to work with those parties to identify um what's
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needed um and then within that you're going to need uh support congregational
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support and so it's really important to understand you know if we're going to pursue this you know our folks on board
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um are you going to get support for this and you don't have to know all of that at the very beginning um but it does
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make a tremendous difference in how quickly and easily you move through the process um the organizations that have
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chosen to go down this path that have gone through it most successfully are ones that have really pursued this with
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conviction and have um you know come together as a body to say this is what
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we want to do this is why we want to do it and we're we're going to move through this process and so um it's really
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important to to ask these questions upfront um and then I I'm going to lead
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this first question which is how much land is it we're going to talk about that in just a second on the second
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slide so you know first is what do you have and um and you know who who's going
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to need to be involved on your side to make the decision to actually engage and pursue a development
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plan um phase two is is what can you actually do with it
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it's the feasibility study and um and I will tell you that developers are
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inherently creative and so when they are given an opportunity to look at land
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parcel that's available they immediately go into this creation mode and thinking about all the different opportunities
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and things that they see and oftentimes different developers see different
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opportunities and so um many churches have used use something called an RFP
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process which is a request for proposal where you kind of put out the land opportunity and say this is what we have
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available these are our goals this is the information we do have about our land come bring us your ideas um that is
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a really great way to get different ideas um from the community from the development community on um what's
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possible on your site um we can talk a little bit more about some nuances and
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consideration if you decide to go through that process um but some of the questions they're going to be asking are
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around four main categories the first one is physical what can you physically
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build and this is around identifying how much land you have uh what some of the
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physical features are of it like topography trees um points of Ingress and
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egress um and whether it's got a stream going through it or a body of water
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those kind of things um those are the physical site evaluations um and I'm
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going to refer here to there's a there's a a handout that we mentioned earlier
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that's on the website that is um has a list of some
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free tools often the the first one I use is Polaris which is the meinberg County
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GIS system it's very easy to use um we are planning on posting a YouTube
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video to help you kind of quickly get some ideas on how to use that to better understand your
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Parcels um and so uh we'll follow up with that um but the second category is
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legal and Regulatory constraints is okay I might be able to physically build something but do I legally have the
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right to do it um and so that comes down to zoning which is around land use and
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in our area City of Charlotte if you're within the city of Charlotte um that zoning comes from the city level um and
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second is survey and title survey is um you
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know they legally tell you where your physical property boundaries are whether
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or not there's any easements on your property whether it's a vehicular easement a ride of way for future Road
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expansions um uh right of way for um or an easement for power lines or sewer
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there's all sorts of different things that can be underneath the ground that you may not physically see but a survey
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would uncover that and a and the title insurance is really important because that tells you do you have actual legal
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right to make decisions about this property um sometimes there are issues
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in what we call the chain of tidle um where something wasn't conveyed
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correctly um or there may even be restrictions um so data restrictions
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that say you're only allowed to build XYZ um under this parcel so it's really
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important to know that's all stuff that's public record um an attorney is the one that will help you really
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identify all of these things um and so for example um many years ago back in
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the 50s or so um when a lot of these subdivisions were being built out there are regulations that say you can only
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build a single story single family home with XYZ characteristics that's very
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common um and um it's important to work with an attorney that understands which
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of those restrictions that are in place that are still enforcable and which ones may be on the record but are not
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actually enforcable that's something that an attorney can help you with um there's also environmental factors you
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have to to take into consider ation um and there's Consultants that can help you understand that um so
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that's the second category the third category is okay I may physically be able to build this I may legally be able
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to build this but is there a demand for the product that I want to build um who
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am I serving and in what way and so um you know many times you know it came up
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last week there was a discussion around intentional mixed income communities which I personally am a huge fan of um
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but you do have to make sure you understand um the the demand in that
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particular area and can I achieve the rents that I need to achieve um to make
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my project viable and um you know what's the depth of the demand for a particular
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target market and so that's all part of the analysis really important to understand um and then you kind of put
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all three of these together but the fourth one is the Lynch pin um it's it's
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the um it's the financial feasibility it's really trying to
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understand um you know can I raise enough money based on what I can charge
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and what it's going to cost me to build this product can I Source all the funds that is going to make this project get
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off the ground and so that's a combination of um understanding all the different Financial tools as well as
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ongoing operations if it's going to be a rental property um and balancing all those things so the these are the
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Specialties that developers understand all of these four different silos um and um hopefully the handout
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that we provided will help you start to kind of understand some of the free tools you have available um as you start
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to Think Through who you want to serve on your site and whether or not um that's
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possible um I'm going to go through this slide and then we'll pause um for some more questions um so the the next phase is
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okay I've I've found a site that's available um I think I generally know
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what I I I can build um on the site build and Finance on this site now we're
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going to take it a further step and we're going to figure out how we design
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and plan this community and get it through all the proper channels so that we can have the permits needed to
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physically build this building and so what I'm showing here on this slide is
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that um you know kind of somewhere in that feasibility phase you're you're doing some initial concept planning this
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might be hand sketching this might be um just kind of verifying your developable area on a free tool like
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Polaris and um you know using a what we call like a Lego model of like taking
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building blocks of other existing buildings and kind of putting them down and seeing kind of conceptually what you think you
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might be able to to get once you kind of have an idea um of what what that looks
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like and decide to move forward then you go through the process of um if you need
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zoning the design team can help you and they're right there alongside you as you move through the zoning process to make
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sure that once you get something zoned you actually can can build it within what you're agreeing to um and then it
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it takes it a step further to what we call schematic designs um these are often needed for our funding
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applications for affordable housing they're needed when applying to City of Charlotte or to the state agency which
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is nchfa um so they the intent here is to be able to
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show with uh with reasonable certainty that you can deliver a certain amount of
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units and what that quality is going to look like what that Community feel is going to be like um and so it's still
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kind of an early stage design process um where you're kind of going
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through iterations to make sure it works before you commit to going through a full permit set Um this can be expensive
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um it's an investment and it's well worth it um but it's really important to
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know that if you're designing a rental community that entering into the
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permitting phase um it's very detailed lots and lots of different versions of
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designs and it gets expensive so it requires a lot of investment this again
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this is where the developers have expertise they have sources of funding
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um pre-development Capital that comes in to help pay for going through this this
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process um and it's not something that a lot of faith-based organizations are choosing to to fund um so it's important
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to just understand the process and that a lot of of capital is required to get really into detailed um permitting and
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Designs um and the um Architects and uh civil engineers all all of that that
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team stays involved through the construction process um they they are
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there just to make sure that the plans are being implemented in accordance to what they drew um and they work closely
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with the inspectors um that are coming in during the process um and so they're they're in there all the way until the
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very end um and um I'm G to pause here
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for for questions Megan is there anything we
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haven't seen any questions in the chat yet but I do have some questions that were submitted before the webinar when
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people registered so um I will pose one or two of those and some of them may be better answered by Michael some better
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answered by you I will ask for those listening I just want to make sure the chat feature is working and you guys
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have powers to submit questions so if somebody could submit a sample question or just say like yes I can I can type um
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in the chat box I want to make sure that that's working um otherwise it'll be a very quiet call
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um Michael maybe you can answer this oh thank you thank you lesie and John um
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enter your your questions in the chat box and we'll we'll get to them um we had one question submitted before this
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seminar started that said um how are we tracking progress on the number of homes
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that have been set as affordable in Charlotte Michael can you take that one
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yeah sure thing I think there's multiple ways that you that this is being tracked but I mean first and foremost if they're
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City funded um they are within our portfolio of Investments that we have made at at the Housing Trust Fund and so
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from there we have an asset management team on the back end um that is tracking those units as they are brought online
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so it's kind of a multiphase tracking process right so while under development they're being tracked by myself and some
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other staff who are you know monitoring construction progress and what have you and then once they're actually completed
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and brought into the market those are then tracked by our asset management team who ensure that they're complying with what was proposed in the initial um
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uh application and through the loan agreements through the the restrictive covenants and what have you so yeah
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there I mean there's a number of ways um and another way is uh there's kind of a back stop here if you think about it in
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terms of if they have been funded by tax credits and so if they have been funded by tax credits they're immediately part
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of um State monitoring as well as Federal monitoring through the IRS um for the tax credit scope so there's number of
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layers of monitoring that go into it and ensuring that the units that have been proposed and funded are actually being produced and set aside for the families
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who are eligible for them so great question great um I also while we're
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waiting to see if we've got one more question is that um We are continuing to
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work on trying to put together some tools to help faith-based organizations in this visioning process um and so
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we're exploring um maybe some small um you know uh design shet uh Concepts we're
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also working through some ideas on providing you guys with some templates of um things to help you kind of go
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through the process and so stay tuned um and continue to let us know what
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questions you have or what you need to go through the process because that helps us in thinking about how we can
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deploy resources to you um and um some of the questions I may I
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may need to wait let me get through this next section um y'all continue to send your questions in and then we'll pause
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um because I just want to make sure that we finish um this and leave leave more space for questions at the
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end um Okay so we've gone through um Phase 1 through three and then I went
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ahead and jumped ahead to five five five and six for planning so keep that in mind um so we're going to jump to phase
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four um I intentionally only having the name of the categories in a second you'll see me I'm going to drop in some
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key words underneath this but um the next phase is securing the funding um
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and so um there's a lot of moving parts to this um and so um and they Pro it's
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important to keep in mind that when a developer ER sends you a proforma so
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proforma that word means U it is a a financial picture of what the project is
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going to cost um and so often you'll see a sources in a uses the sources is the all
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the different sources of funding you're using and then all the uses um such as land cost hard cost um and so that
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that's one of the things that you'll see all all of the components on on the screen are what you would see in a
35:02
financial performa that they would give you um it's you know some people will call it a budget but it's it's actually
35:07
all four of these items um and so um the
35:13
the cost to develop um that's a combination of the land the hard cost the soft cost and developer fees um that
35:22
are required um to to build the project um and so it it can slightly vary um
35:30
depending on not slightly it can it can vary widely based on the type of product that's being build in whether it's
35:36
rental or single family um rental often will include operating
35:42
reserves um but those are not often included in for sale because you're selling it to an end user right
35:48
away um and then in the second bucket operating income is a is a big um
35:56
consideration for rental properties again this doesn't apply if um if you're
36:02
going to be selling the units um although that it does play into a factor
36:07
if you've got an HOA because that HOA needs to make sure it's set up to be sustainable um that there's um you know
36:14
dues coming in to help cover common area expenses but really when I was putting this slide together I was thinking about
36:20
rental communities um and thinking about you know how much are we charging for
36:26
the unit that they're going to live in what is the the cost of of operating
36:32
that building and what's the difference between the two and depending on who you're choosing to serve within the
36:38
housing Spectrum um that Delta the difference between you know what you can charge for
36:44
that unit what it costs to operate it really makes a big difference in determining how much money you can
36:51
borrow to build that building and then how much additional subsidy funding you
36:56
need from local and state sources or private sources in order to make that
37:01
Vision happen um and so in a second I'm going to show you some of the terms but I didn't want to get you guys uh super
37:08
overwhelmed um and um I wanted to show you guys
37:14
actually I'm going to go ahead and show you the next slide um so you can see these are all the
37:19
pieces and so you can see under cost to develop I already walked through um
37:25
these major terms soft cost this is also in the glossery but um you'll hear this
37:30
the word hard cost means Sticks and Bricks basically um and the uh the
37:36
infrastructure work to put in roads sidewalks all that kind of stuff um so
37:41
it's the physical things that you see um moving around on a site to make a building happen the soft costs are um
37:49
all the all the fees that you have to pay to designers and for thirdparty reports and for financing partners
37:58
um to put all the mechanisms in place for this to happen um and so just know that those are the terms between the
38:04
hard cost and soft cost and developer fees I've outlined this in the glossery this is really important there's a
38:10
tremendous amount of risk in um taking on in building these projects and
38:15
operating them and so in order to entice developers to do this they need a they need to be paid and that is through
38:23
what's called a developer fee so it covers a combination of their overhead
38:28
so the Staffing that's required to help shepher through you know deals through the process as well as to compensate
38:35
them for the risk that they're taking um to to Shepherd the process um and
38:41
provide financial support and financial guarantees um as well as compensation
38:47
for their creativity and the the knowledge that they bring to um combine
38:53
all these factors to create value um and so it's normal that they charge a developer fee there are often industry
39:00
standards on on what uh what can be charged and so um you can always ask
39:06
those questions saying is this normal is this the right amount um and my
39:12
recommendation I've put this in the glossery is you just want to be careful um on projects the very beginning you
39:18
don't want developers to have to defer too much of their fee um you want
39:23
them to get paid for the risk that they're taking um and to still have um you know room to address uh risks
39:32
that the project May encounter during construction and so that that might be a 202 level um but I just wanted to make
39:38
sure you guys were aware of that um and on the debt side um I wanted
39:46
to make sure we we talked about the the term First Mortgage um think about this as your home um the it's it's the person
39:55
who is uh providing the the primary um source of lending and it's
40:02
it's in first position meaning it's got the lowest risk of all the different lenders um and then in the city of
40:08
Charlotte if you're doing a rental property typically the city of Charlotte um comes in behind that first mortgage
40:15
so it's a loan people have to pay this back it's not uh it's not a grant um the money has to be paid back and it's
40:22
secured by the real estate um but um but they they're willing to go into second
40:29
position there's other funding sources um like Faith communities have been able to come in and provide um a third or a
40:37
fourth mortgage um like we talked about during the summit Covenant Presbyterian
40:42
came in and provided a $2 million loan to a project um at below Market terms in
40:47
a fourth position um mortgage and that helped make that vision of that project
40:53
happen many other examples that are going on in the city um where they've been able to provide those type of
40:59
subordinate lowcost loans to help enable deeper targeting um or to serve um a a wide
41:09
variety of individuals within a community um and so wanted to make sure that you guys saw that um and then on
41:16
the equity side um developers often um are required to bring their own cash
41:23
that's what Equity means their cash to the table um but in the rental community
41:29
that the primary tool that is used um as Equity is called tax credit Equity it's
41:34
a special program um that's designed um for affordable housing um and large
41:41
Banks like Bank of America Wells Fargo um you 5ifth third these groups
41:47
will come in and they'll buy this tax credit equity and invest that's one of the ways that they do community
41:52
investment um it is not the only tool there are many other um um types of
41:58
equity that go into rental development deals but that's probably one of the the most
42:04
common and we can come back to this I realize that's big picture um but I
42:10
wanted to make sure you guys were exposed to these are all the levers that developers are trying to balance um to
42:17
make a deal feasible um we have we have one question
42:24
about um specifically about tax credit financing it's really more about um
42:29
preserving existing affordable units but kind of on that vein um Ali asked are
42:35
there any tools to see when properties are about to lose their low-income housing tax credit status and
42:41
potentially become market rate units that is a great
42:47
question um I yeah go for it Michael
42:52
yeah so I was going to say so I mean typically what you'd want to do is go to the nchfa website which has a list of
42:57
the awarded projects by um County and so you can you can search by County by year
43:03
and then from there you you'll typically want to look for like a 30-year lag period right so if you're interested in
43:08
developments that are going to be coming off of the tax credit roles in 2025 for instance uh you'd probably want to look
43:15
around the 1993 to 1995 range of developments that were awarded tax credits and that'll give you a rough
43:22
idea of when those developments are available and I think Liz you just dropped in the I was going to drop in perfect it's spot on that's the only
43:29
thing I could think of that is a regular tools to be able to see you you would go
43:34
there um think about this so um if you're going to look for those tool those properties to try and see when
43:41
they might be converting if they were funded through nchfa that means that um they signed on
43:49
for an initial 15year compliance period and an additional 15-year compliance
43:55
period so it's a total of 30 years um and most often that is how long um a
44:02
Project's uh restrictions will be in place um there are if for some reason
44:08
the property is having um operating difficulties um there are some avenues
44:15
for um uh primarily through foreclosure or or other things where those
44:21
restrictions could get wiped out I am not aware of that happening in in North Carolina
44:27
um but it is something to be aware of nationally um but so you typically want
44:32
to look at that 30-year period from when it was um on this list um ultimately The
44:39
Guiding source is going to be um if you find a property and you're wanting to check or if you happen to have ownership
44:45
in a property and you want to see when the affordability is up there will be a recorded document that's called a a deed
44:53
restriction or a land use restrictive Covenant um and you want to look at the
45:00
year that those went into effect um and so that's um a core thing to be able to
45:06
look at um so that's a great question um thanks Li thanks M I'm gonna
45:12
link that oh yeah go ahead just on time we have around 15 minutes left so I'm
45:18
want to suggest that we um we've gotten some big picture questions Michael about kind of City focus with policy I'm going
45:25
to suggest we hold those till the end and Liz if you want to keep going and get to the part on roles and risks and
45:32
then we'll come back to these other questions so if you submitted a question we see it we're we're coming y that sound okay that sounds sounds great and
45:39
so I'm we're this is Phase seven so we went through identifying the land um
45:44
doing your initial feasibility study um we went through design and planning
45:49
securing the funding and permitting um and so in total to reach phase seven um
45:57
like I gave an average of three to five years to reach unit completion it can take much longer than this um and so um
46:06
here on the slide you can see uh phases one through five which is before you begin construction on average can take
46:14
18 to 36 months if you are clear on your vision what you want to do and you pick
46:20
partner and you kind of hit the ground running for churches who are or faith
46:25
organizations it doesn't have to be a church this is you know all inclusive where there are many different Faith organizations that are wanting to be um
46:33
a part of this um it can take some time to go through
46:40
the discernment process of deciding is your site available do you
46:45
want to go through this process and so just keep in mind um as you're thinking about how long you're you're giving to
46:52
that process that um it's going to take some time for for a project to be
46:58
verified as feasible and to get out of the ground um so just keep that in mind that it doesn't just happen um overnight
47:06
um you know single family projects can happen a lot faster but still even with
47:12
a larger single family communities it can take um it can take quite a bit of
47:17
time to get through um the permitting um phases and so um you know the smaller
47:24
the project the faster it can probably move through this but um but in general
47:29
these These are probably going to give you a good idea of how long it takes um and um and I I think one of the
47:38
things I was able to talk about in the in-person session last week is because it can take so
47:45
long um it's really important that you um feel convicted about what you're
47:52
going through and that you pick a partner that um is aligned with your values and your vision and so we're
47:59
going to talk more about that in the session next week um but I've worked on many of these deals and I can tell you
48:04
from personal experience that it is worth all the Blood Sweat and Tears you put into this um they are it is so
48:12
meaningful to get to a grand opening day where you're celebrating and you're um
48:19
you know seeing residents get access to their keys and to be part of a community
48:24
um it it is worth it and that's what drives the developers in this space to to keep doing it over and over and over
48:31
again because we celebrate those moments and um it is just really really special
48:37
to see um that type of um the you know Community collaborating together to
48:44
create something for the community is a very special process and it can be very joyful and so given the fact that our
48:52
audience are all um faith-based um folks I encourage you to lean into
48:58
the spiritual components of going through this process it takes time um
49:03
but use this time to work together as a team and to um to follow as um you know
49:11
you are feeling called to do so um and
49:16
it can be a really really joyful um experience um so on the next slide
49:25
is is anybody brain overwhelmed um I tried to simplify this as much as
49:32
possible but I want you guys to have a takeaway that there's a lot of moving Parts in the development process um it's
49:38
not simple and so sometimes when you're wondering why it can take a developer
49:44
you know so long to get back to you or why it's going to take so long to get through the process it's just because
49:49
there's a lot of moving Parts it's complex it's really important to have people on your team who are committed
49:54
and really understand all the moving um pieces and um and so before we move into
50:01
the next phase I want to give everybody a chance to breathe um and if you're feeling
50:08
overwhelmed by the amount of information I just threw at you take a deep
50:13
breath and um we're going to lead into what you guys do with this information
50:19
now what are some of the key considerations for faith-based organizations um and so the the core
50:26
thing that I could advise you to think about is leading with your vision um what is
50:32
your motivation who are you seeking to serve um you know think about the things
50:39
that are laid on your heart it's okay that it's different than someone else find the thing that that gets you
50:45
excited um and gets your your group your your organization that you can
50:52
collectively come together around um and it's really important in this space to
50:58
to make sure that you're not leading with fear that a fear of a lack of resources a fear of certain things is
51:05
your driving force um put that to the side call them out when you see them and
51:11
put it to the side and try and make sure that you're focusing on leading with positive intention um and that you guys
51:18
are your team is pulling together around a common Vision um and that you're
51:23
opening yourself up to all that is possible um and then in the in the second one is
51:31
set your expectations I feel like I've talked about this over and over and over again but it's really important that
51:36
everybody knows it takes time you have to have patience um and it's okay to set
51:42
expectations and deadlines and um and hold people's feet to the fire um but
51:49
just know that it takes time and Land Development has risks and so that's why it's really important to um understand
51:57
where you fit into the process you may if you have land and you're wanting to engage in this um it's important for you
52:04
to decide you know do you want to be a part of taking the risks in the development process or do you just want
52:11
to contribute the land and pick a partner who can really take the rest of the ball and run with it um that is an
52:16
option um some Churches or and different Faith groups and congregations and um
52:24
organizations are deciding to play a role in some of those risks um
52:31
but but I you need to make sure you understand what those are so we're going to go quickly through risks resources and roles and then I'm going to pause in
52:38
like two minutes um so we can open it back up for questions um and so I'm
52:45
going to skip over to this so the risks um that you're willing to participate in um
52:52
oftentimes there's Financial risks so there's predevelopment capital construction funding that's required uh
52:59
guarantees um for borrowing um money to construct these buildings and ongoing
53:06
obligations with operations with rentals and so uh the faith organizations really need to decide are any of these risks
53:14
that you're willing to take um or do you need to pick a partner who's willing to do that and can demonstrate their
53:20
capacity to do that um I think really some of the core questions come down to control um Faith organizations often
53:27
want to have an element of approval over concept and design Clarity on who's
53:33
being served and that that can't be shifted without um having a seat at the table and
53:39
controls um or if it's being built on your campus long-term rights regarding
53:44
Community quality and shared spaces and who's taking care of those things who's paying for them who's maintaining them
53:52
um and of course if you're including housing um thinking about the affordab ility periods um what is the minimum
53:59
commitment to keep units affordable and what can happen to them in the future those are really important things for
54:05
Faith organizations to be thinking about um and outside of money and control it's
54:10
relationships you're part of a community and so you you often have deep relationships in those communities
54:17
making sure you're thinking about how folks are engaging in those relationships playing a role in that and
54:24
also making sure you're managing internal Dynamics um and um you know communication within
54:30
your own organization making sure that's nice and clear um so once you determine which risks you're willing to take on um
54:39
that can lead you into um identifying what resources you have available I'm not going to spend
54:45
any time on this but this is um you know in the slide deck we can come back to it
54:51
um but this is just kind of showing there's a a teetering balance between um
54:56
you know the pursuit costs um and the control of the land and um these are just all the different pieces that often
55:03
folks are trying to wrestle through um un understand your resources
55:09
um and so do you have capital and it's if you don't the city is working really
55:14
hard to try and identify what resources we can help you navigate um either through um you know
55:22
free public resources or through um obtaining Professional Services that may be able to be rolled out next year um
55:30
but it's important for you guys to identify do you have Capital within your organization and um you know or do you
55:36
have the capacity to raise Capital through through folks we've seen lots of powerful examples of people coming
55:42
together over a common purpose um everybody brings a little bit to the table and it really is enough to really
55:49
make a a meaningful difference um understanding the the people you have
55:54
within your organization um folks who are willing to serve as committee members maybe you have internal um folks
56:02
who are members of your organization that have experience in real estate or experience in law um or experience in
56:09
one of these other aspects that we've talked about and can help you um
56:14
internally with your your committee and or um advising you in the
56:20
process um and making sure that you've got people who are advocating for the work that you're going through
56:26
um internally um and then of course uh understanding what land or buildings
56:32
that you guys have um that you're you're interested in uh
56:37
leveraging um and then the last one is um is around your role and the main
56:43
thing I want you guys to walk away with here is um it's really important to
56:49
communicate communicate communicate um especially in this early phase that you might be in write down your vision
56:56
um use internal memos PowerPoint presentations get really clear on what
57:02
is the definition of success for you guys um before you start taking steps to
57:08
engage with a partner make sure that's written down and then as you start to work with Partners obtain written
57:15
proposals um get a memor of understanding which is a it's a non-binding document but it kind of
57:20
spells out big picture to make sure the parties are on the same page um so that as you move through the
57:26
process you know if people change or if so much time passes that you just can't remember you can go back and refer to
57:32
those documents and make sure you can use those to get back on track um but
57:38
it's so important to find partners that you trust um trust folks but it's okay
57:44
to verify make sure you're getting the information that you need to feel good about a decision um and um you know if
57:52
you've got questions or concerns always raise your hand um but just know that there's a lot of parties in this process
57:59
and um you know your organization may just be one of many um and so it's important to just understand the
58:07
complexity um of all the people that are involved so I'm going to pause that's it
58:14
that's the end of um the slides and um want to give a chance to
58:20
go through questions I know we're we're right at the end thanks Liz um we've got
58:25
a couple good questions but some of them I know we're going to answer next week
58:32
can you flip to the slide about the next session and yes um I will invite people
58:38
to to if you haven't submitted questions you have them please drop them in the chat now and then Liz one of the
58:44
questions we got um prior to the webinar was from Elizabeth she said how did we
58:50
share our proposals for consideration I assume she means from developers others and how do we receive guide to fundraise
58:57
for
59:02
Capital um proposals for you mean um in terms of if if you're wanting to put out
59:09
an RFP to the community how does it get out I think that's the question yeah
59:14
that's a great question um that's not something that the city has yet talked
59:20
about facilitating I will say that's that's something give impact has done in the past to to help um our clients do
59:28
that um I've also seen folks do like a direct invitation of if you if you've
59:34
interviewed or talked with a couple of development Partners um you can put
59:39
together a list of folks and just email them directly it just depends on how wide of an audience you want it to go to
59:47
um and so that's something that we can kind of think through as a takeaway item is is there a way for um you know to to
59:55
make sure we thinking through how to get you guys resources on putting that out um or guidance on that Liz can you
1:00:02
explain what the next session Land Development 102 will'll cover and then Michael maybe after that you can share
1:00:10
what else the city has in the works that will be coming next year yep so so next week we're still um
1:00:18
fine-tuning the content as folks have asked different questions and asked for different things to be covered but of
1:00:25
course today was a try and make sure that folks have a baseline understanding of the many different steps and the
1:00:31
complexity of the development process and then next week is to be able to kind
1:00:37
of do a deeper dive on uh the different parties in our community who um are part
1:00:44
of the development process and um and a deeper understanding of how to discern
1:00:51
who the right partner might be um and the information you might need to get in
1:00:56
that phase and so that's a talking about the RFP process um I think is something
1:01:01
that we should add to the agenda um for next week so we can we can go deeper on
1:01:09
that yeah and then Megan as you alluded to so plans in the future for the city regarding um the RFP specifically so one
1:01:17
of the the goals of the RFP that's being uh released is to build a cohort style
1:01:23
capacity building program um for the various uh Faith institutions Faith communities that are interested in
1:01:29
taking part right and so as part of that RFP there's Al also an RFQ for technical experts who will be able to provide
1:01:36
technical assistance uh along the way and sort of be in a pool of experts that that folks can reach out to for that
1:01:41
sort of um capacity uh well capacity assistance and and to be part of the
1:01:47
capacity building program so that's that's what's in the works currently and uh yeah Li any anything else that we
1:01:54
should highlight from upcoming events no I mean I guess just want to
1:01:59
make sure people know too that um you know the the lunch and learn next week
1:02:04
we're following that it's going to be in person and then subsequent to that there will be an online version and so for each of these lunch and learns we're
1:02:10
rolling out we're trying to do an inperson version so people can have the chance to network um be be with other
1:02:17
other people and then we can kind of um you know do a dry run on the on the content and see what kind of questions
1:02:23
folks have and then we're doing um the second one online so that we can record
1:02:28
it and make it part of the permanent library for folks who weren't able to attend um and so we'll be following that
1:02:35
format and continuing to roll out additional lunch and learns um so as we
1:02:40
go through this if there's certain topics or ideas that you have for what we should cover please send those to us
1:02:47
um because that would be really important um and I don't know Megan if you are okay with putting your email in
1:02:54
the chat um if folks have ideas or questions about that Megan is serving as
1:03:00
the project manager um for for this initiative U with give impact and so um
1:03:07
she's a great great um person to reach out to um Christina asked if um there's a
1:03:16
list of organizations that Faith communities can reach out to for assistance maybe in advance of the other
1:03:23
program that the city is building up Michael that mentioned so Christina I put in the chat but for anybody else
1:03:28
who's looking for it there is a published directory of it's broad it's
1:03:34
all stakeholders in the faith and housing space in Charlotte so that includes other Faith communities that
1:03:39
are on this journey that either have done it before or might be looking to partner it includes professionals um
1:03:45
developers and Architects and other professionals who are really invested in this um and then some some public
1:03:51
servants as well and so that's all in the directory that is posted on the city's faith housing web page uh and if
1:03:58
you're in the webinar today you can find that in the chat as well um but I I will also say that
1:04:05
that's something that we are are trying to increase Clarity and access to that information um both
1:04:13
for you know the benefit of all the faith organizations who are exploring this work but also for for the for the
1:04:20
folks that are working for those organizations it's it's um you know they're they've got a lot on their plate
1:04:27
um they are are constantly trying to move initiatives forward and they want to be a part of this we're just trying to make sure how do we um make sure we
1:04:35
Elevate their work but also um give a better and more clear pathway to
1:04:40
understanding what it is that each of them do um so that um you can make sure
1:04:46
that you're getting to the right person faster um so we're we're working on trying to pull together some documents
1:04:52
um that will help you on that pathway
1:04:58
Michael at the top of the meeting we had some big picture questions that people submitted about just the city's
1:05:04
leadership on more affordable housing in general and particular questions about like what resources are available if um
1:05:12
people want to engage is there any guidance you can offer on how to navigate City
1:05:19
assistance yeah that's a great question so I mean one of the things I would highly recommend is being part of our our mailing list for informational and
1:05:25
fun opportunities and so as we have information available to share on those um it'll be available um of course we
1:05:32
have an upcoming bond this November uh for affordable housing and as part of that I I believe a portion of of those
1:05:39
funds are um being set of set aside for a number of different initiatives um
1:05:44
including um you know some of the work in faith and housing so yeah I would I would stay tuned stay connected with
1:05:50
with the city's announcements and and uh information uh and yeah as information comes available we will be sharing it so
1:06:01
yeah right we I haven't seen any additional questions come in Liz do you want to offer any final
1:06:08
thoughts um you know I will just say that I am um incredibly grateful for
1:06:15
each and every person who has um joined this call and joined the lunch and learn last week and just encouraged by the
1:06:23
number of of groups that are raising their hand to explore this work um and
1:06:30
so it is um really exciting and so we're we're uh looking forward to contining to
1:06:36
roll out more resources to you to help you kind of on this pathway um and look
1:06:41
forward to anybody who can join next week oh Megan do we want to to to remind
1:06:50
folks that particularly for the in-person session next week we are really intending that to be for
1:06:56
faith-based organizations we we've been super grateful that a lot of our design development Partners have been able to
1:07:03
attend these sessions and have been really engaged but I think we were hoping to create a
1:07:09
space um for next Thursday's inperson meeting where folks can really feel comfortable asking um you know lots of
1:07:18
questions that they might not otherwise feel comfortable asking in front of developers um The Hope is yeah the hope
1:07:24
is that next Thursday session which is Thursday October 24th is really for faith-based and Community groups who
1:07:30
want to embark on this work um and that will be hosted at the 658 Center at project 658 which is on Central Avenue
1:07:37
right near the intersection of Central and East way so registration for that is open um and we hope you guys can come
1:07:44
yeah and and I will just um close with feedback we would love feedback if there's content um that you would like
1:07:51
to see in um that wasn't covered today um or things that you would like to add
1:07:57
to the handouts that we've provided um please continue to let that feedback
1:08:02
roll in so that we can make adjustments and um continue to improve everyone's
1:08:08
access to information great thanks so much Liz
1:08:14
thank you Michael all right thanks guys thank you to everybody who's

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