Affordable Housing 101
Latest architectural rendering of proposed Senior housing complex was displayed at the Oct. 26 City Council work session by developer Robert Fossi of The Community Builders, Inc. (Staff photo by George Southern)
By ANNETTE HENNESSEY
Falls Church Times Staff
Our two most recent articles on City Center South Senior Apartments (CCSSA) — Housing Corp. Seeks $2 Million City Funding for New Project [October 25, 2009] and Housing Corp Application Generates Questions [November 5, 2009] — have generated over 50 comments, and many requests by readers to have someone clearly outline the project, the issues surrounding the financing, and next steps. Using information from the articles and the many comments made to each story, the Falls Church Times has pulled together this guide to the CCSSA project. In order to ensure that we had captured the facts, we had it reviewed by Carol Jackson with the Falls Church Housing Corporation (FCHC).
| THE CCSSA PROJECT | |
| Location of the project | 350 South Washington Street |
| Number of units | 66 |
| Number of stories | 4 stories |
| Targeted population | Income eligible (< 60% Area Median Income/AMI) elderly; disabled |
| Design status | Concept development plan for mixed development complete |
| City approval process | Will submit for City staff review Application for Special Exception for smaller footprint/lower density |
| PROJECT FINANCING | |
| Total cost of project | $ 16 million |
| Federal monies | $ 8 million |
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| City monies | $ 2 million |
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| Affordable Housing Fund monies | $500,000 |
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| Falls Church Housing Corporation monies | $2.25 million |
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| Private financing | $4 million |
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Other information that was compiled from the comments include:
History of City Funding. In 2006, the City Council set aside $2 million in CIP funding to increase affordable dwelling units (ADUs). According to the FCHC, “when the CIP… was approved to include the $2 million dedicated for affordable housing investment, those funds were originally discussed and intended to be a grant to a housing developer who would bring an illustrated 20 units of housing to the City…with no pay back to the City[.]” When FCHC proposed the original CCSA development to the Council in 2008, the City had a Voluntary Concession from Atlantic Realty’s proffer to build the City Center to designate a $4.2 million affordable housing cash subsidy to provide needed equity for the full completion of the City Center South Apartments planned to combine family and senior housing in a single larger development.
Repayment of the Loans to the City and Affordable Housing Fund. Money from the Affordable Housing Fund (subsidies provided to the City by developers of mixed-use development) will be used to pay the City interest through 2013. When the CCSSA property is refinanced, the $500,000 will be replaced in the AHF. If new developments bring new revenue to the AHF in the interim, that money may also be used to pay the bond debt service for the City.
CCSSA will be refinanced through a third party financial institution in year 16 in order to repay the City the remaining balloon payment balance. In the intervening first 15 years, FCHC’s senior partner, The Community Builders, owner of 25,000+ units east of the Mississippi, will be the guarantor of all debt, including the City’s loan.
Project Status. Now that the project has been submitted and awarded federal funding, no significant changes will be allowed to the seniors’ apartment project (size and scope of design, target population).
This debate has highlighted some ongoing questions about CCSSA in particular and Falls Church City’s commitment to affordable housing in general:
- What is the commitment to affordable housing and at what cost?
- How does the City plan to address shortage of workforce housing if its entire $2 million set-aside is being used for affordable housing for the elderly and disabled?
- If the CCSSA project is not approved, can the Council reallocate the $2 million CIP affordable housing set-aside for other purposes?
- How does the City determine quantity of affordable housing from residential projects? To date, the City’s ADUs have been less than 5% of all units created since the mixed use projects began to be approved in Falls Church. Arlington County seeks roughly 10% in every new development, Fairfax and Loudon is typically up to 12%. Does Falls Church need to re-evaluate its approach?
- Is the $2 million being requested to finance the CCSSA project the same $2 million used as a short-term loan to the FCHC to secure an option to purchase 360 N. Washington Street? Under the loan agreement, the property owner was scheduled to repay $1.9 million to FCHC by mid-December 2009 and FCHC was to repay the entire $2 million to Falls Church City.
FCHC has promised to hold some Q&A sessions with citizens after the new year. From the robust discussion on FallsChurchTimes.com, we suspect the debate will continue long after the City’s decision about the CCSSA proposal. And as always, we welcome your continued comments.
By Annette Hennessey
November 19, 2009
Falls Church in the News
I think it’s interesting that previous posts on this issue got so many comments and then this one didn’t get any. When I saw the title to this post I was eager to read it – because I’ve been trying to really understand the basics of affordable housing in Falls Church. However, when I sat down to read the article it wasn’t what I was looking for.
It’s nice to see a compilation of information about this specific project but for me Affordable Housing 101 would cover more general issues related to affordable housing. The post ends with some of the questions I have – like how and when did the City calculate how much affordable housing it wants to make available? It seems like the Affordable Housing Fund gets money from developers as they get approval to build projects. Where does the Falls Church Housing Corporation get its money?
I’d love to learn more about different kinds of affordable housing. This project targets elderly and disabled people. Other projects have targeted “workforce” people – but it seems like only a certain kind of workforce. Are there programs that target workers who earn more than what would qualify them for these other programs but not enough to allow them to afford to live in the City?
How are people selected to live in these units. When the City makes new units available are they usually filled by existing residents or do people move into the City to fill the units? It doesn’t really apply for CCSSA but in other affordable units how many residents work in the City as opposed to outside the City?
When people move into affordable units are they renting or buying (or something else)? What are the different approaches (i.e. spread out vs. concentrated) to affordable housing? Which approaches are used in this area? Which approaches are used by towns and cities of our size?
As for the specifics of this project as outlined in this post – there are many terms used that I’m starting to understand but I can imagine someone reading this article as a first introduction to the issue would be very confused about. For example:
* What does “Application for Special Exception” mean?
* What are “9% tax credits allocate by VHDA” and how does selling them to private investors work?
* What is VHDA?
* What is a “15 year balloon payment soft loan?”
* What is “1/3 tax rate penny?”
* What are the uncollected utility hook-up fees and how do those relate to direct hook-up costs that the City would cover (or would the builder cover them)?
* What is the Falls Church Housing Corporation (how was it formed, who controls it, how is it funded, what does it do, etc.)?
* What is “owner’s investment equity from FCHF assets?”
* How much did the “nonrefundable tax credits reservation” cost?
* What is a “30/35 1st Trust Non Recourse Loan?”
* What is TCB?
* What will TCB guarantee during construction?
* What does this mean, “very likely to get loan with above sources of equity in hand?”
* What is “CIP funding” and what is its source?
* What is “an illustrated 20 units of housing?”
* What is CCSA?
* What does all this mean: “Voluntary Concession from Atlantic Realty’s proffer to build the City Center to designate a $4.2 million affordable housing cash subsidy to provide needed equity for the full completion of….”
My point is that while the issue of affordable housing has been debated a lot in the City I think newcomers have a hard time getting up to speed on how it all works. I know it has been hard for me.
Mr. Rankin, feel free to contact the City of Falls Church, Housing and Human Services division at 703-248-5005, we can discuss our City run affordable housing programs with you. Our hours are 8am-5pm Monday-Friday and you can also visit us between those hours at City Hall, suite 100-W.