TO: Chair and Housing Authority Commissioners
THROUGH: Steve Powers, Executive Director
FROM: Nicole Utz, AIC Administrator
SUBJECT:
title
Housing Projects
Ward(s): All Wards
Commissioners(s): All Commissioners
Neighborhood(s): All Neighborhoods
Result Area(s): Welcoming and Livable Community.
end
ISSUE:
An update on Salem Housing Authority Housing Preservation Projects
RECOMMENDATION:
recommendation
Information only.
body
SUMMARY:
Rental Assistance Demonstration
Rental Assistance Demonstration (RAD) is a voluntary U.S. Department of Housing and Urban Development (HUD) program intended to preserve public housing by providing public housing agencies (PHA’s) access to stable funding for making needed improvements to properties. RAD brings private debt with other funding sources for improvement and renovation projects. There is limited funding for public housing repairs. Public housing across the country is in need of more than $26 billion in repairs for long-term sustainability.
The Salem Housing Authority (SHA) is participating in HUDs RAD program. The RAD conversion process involves many moving pieces, and the process takes a long time. SHA and HUD want to ensure each property has the ability to self-sustain once removed from the public housing program. HUD works with PHA’s to review required reserve set-asides, capital needs, and an overall financial plan for each property so that properties can be financially sustainable long-term on their own. Following a RAD conversion, properties will replace HUD Section 9 funding with either Project Based Vouchers or Project Based Rental Assistance through the Section 8 Program.
Existing tenants will not lose their assistance. Their assistance will transfer to a different subsidized program. Tenant relocation will begin in phases and, building by building, all tenants will be in a new and improved unit by end of 2020. In addition to the unit renovations, the entire building envelope will also be renovated. There will also be some amenity upgrades and overall property improvements.
SHA will convert 138 units of public housing in five multi-family buildings through the RAD program to the Project Based Rental Assistance program. Financing has been secured through the Low-Income Housing Tax Credit program (LIHTC). SHA, HUD, and the public housing tenants have been working on a viable plan for conversion since 2015. Tenant meetings have been held to ensure full knowledge of the program and how it may impact the way the property will operate. There has been no tenant objection to moving forward. In fact, most tenants are excited to see the improvements to the building and unit they call home.
There are several steps to this process as HUD works to ensure all properties can meet sustainability goals prior to conversion and that those goals meet strict financial viability tests. Currently, SHA is in its final stages to submit the final financing plan. This plan includes commitments from all funding sources and SHA’s construction plans, timelines, milestones, and tenant relocation. The financing plan is set to be submitted on April 30, 2019. Once submitted, SHA will work with HUD through the anticipated loan closing date of September 2019. Once the loan closing is complete, the properties will no longer be public housing. Instead, they will be Project Based Section 8 / tax credit properties.
In addition to SHA and its management team working through this conversion, the Housing Development Center (HDC) is SHA’s full-service consultant and project manager. They have a dedicated team working with SHA on the conversion. The project team also includes architects, general contractors, and mechanics working through the intricate details. SHA is hiring one dedicated team member solely focused on the tenant relocation piece and will work with each individual family through their temporary displacement. Once this conversion is complete, SHA will be able to continue offering these subsidized units to our community and maintain its capital needs for decades to come
Redwood Crossings
Redwood Crossings (formerly known as Fisher Road) will become a reality in late 2019. Redwood Crossings will serve Salem’s most vulnerable residents using a “Housing First” model, aimed at housing those in need first and then offering wrap around services. Housing creates stability as a first step to establishing a path to self-sufficiency.
Redwood Crossings will offer 37 new units into the rental market:
• 31 - Single Room Occupancy units of permanent supportive housing
• 1 - One-bedroom unit of permanent supportive housing
• 6 - Single Room Occupancy units of Medical Respite (Administered by Salem Hospital under lease with SHA)
This project has been made possible through multiple partnerships and funding from Oregon Housing and Community Services, Oregon Health Authority, City of Salem, Salem Heath Foundation, Salem Health, City of Salem Urban Development, and Salem Housing Authority.
The project team also includes HDC, architects, general contractors, and mechanics working through the many complex details of the construction project and financing.
SHA acquired Redwood Crossings in April 2019. The construction is planned to start in June / July 2019 with a grand opening in late 2019. SHA expects this property will be fully leased within days of the grand opening.
Southfair Apartments and Yaquina Hall
The Yaquina-Southfair project is a two-property, scattered site acquisition and rehab development. The two subject properties, Yaquina Hall and Southfair Apartments, will combine for 92 units of affordable housing available to low-income residents, with 20 units being designated for individuals suffering from Serious Mental Illness (SMI), 10 at each site. To provide appropriate services for this unique population, SHA has partnered with a number of community service providers and the SMI Workgroup, comprised of executives from community care organizations and public mental health organizations. SHA will be the property manager and primary service provider, with additional support from the Marion County Health Department, and the Mid-Valley Behavioral Care Network. The services for the SMI residents will focus on supported employment opportunities, financial literacy, community navigation and access to services, and benefits and entitlement program counseling.
Yaquina Hall (“Yaquina”) is a vacant historic building, built in 1947, on the former Oregon State Hospital North Campus in Salem. The project address is 2575 Bittern Avenue NE, near the intersection of Center and 25th Streets NE. The building is two stories tall plus a basement. Upon completion of its redevelopment, Yaquina will be converted into 52 one-bedroom apartment units, with full Project Based Section 8 Subsidy on 51 of the units, allowing the project to serve the lowest income individuals and small families, and one manager’s unit. Ten of the units will be reserved for individuals suffering from Serious Mental Illness. All units will be restricted to rents equal or less than 60% of Area Median Income. The total area of the project is 51,417 square feet, and includes an on-site management and leasing office, a community room, shared laundry space, and parking for 58 vehicles.
Yaquina Hall is a contributing structure to the Oregon State Hospital Historic District, on the National Register of Historic Places as recognized by the National Park Service. As such, it will be eligible for the use of Historic Tax Credits. To comply with the conditions of that funding source, the redevelopment work will include the preservation and enhancement of several unique historic features of the building, including the windows, the brick façade, and the covered main entry way.
Southfair Apartments (“Southfair”) is a 40-unit garden-style apartment complex located at 1961 Fairgrounds Road NE, in Salem, and is currently owned and operated by SHA. Southfair contains individuals and families of all ages, some of whom that have lived in their apartment for over 30 years. The property consists of seven buildings-six containing a mixture of one, two, and three-bedroom apartments, and one building housing a management office and a vacant space which will be converted into two fully ADA-accessible one-bedroom apartments. The total built area of Southfair upon redevelopment will be 30,500 square feet. Originally built in 1972, the buildings at Southfair have received little capital investment throughout their life and will benefit greatly from this project. As part of the redevelopment work to occur in the Yaquina-Southfair Bundle project, Southfair will have new roofs, painting throughout, fully renovated kitchens, and regraded sidewalks and other walkways.
Southfair will be an occupied rehabilitation project, to occur in five phases with approximately 30 days per phase. Tenants of each building receiving improvements will be temporarily relocated to nearby hotels. Costs for relocation are included in the development budget and will be fully managed and coordinated by SHA. Upon completion, 40 of the 42 units at Southfair will continue to be affordable to residents earning 60% of less of AMI. Eight of the units receive Project Based Section 8 rent subsidy. Two of the units currently house residents with incomes that exceed the LIHTC maximum, which will not be explicitly rent-restricted. These two households will remain in their units after construction, and their rents will not be increased to market rate. Ten of the units at Southfair will be designated for individuals suffering from Serious Mental Illness, on a “next available unit” basis, as apartments open upon unit turnover.
Facts and Findings:
SHA is confident that all three major projects will start the summer and fall of 2019. There will be various resolutions that will be brought to the Commission over the next several months in effort to close each of the financing packages and begin construction.
SHA has partnered with a non-profit agency, Housing Development Corporation (HDC) to manage the finance and construction project management of the Yaquina-Southfair Bundle. No fewer than three HDC project managers will be assigned to focus on this development, working with SHA throughout all phases of construction and financing
Background:
The SHA provides quality housing units and rental vouchers for families, seniors, and persons with disabilities living in Salem and Keizer. The SHA is the third largest public housing agency in Oregon, serving over 9,000 low- and moderate-income clients every day through public and affordable housing units and rental vouchers. SHA has day-to-day asset and property management responsibilities to oversee a rental housing portfolio serving over 1,800 residents across 110 properties and 646 units of public, affordable, and LIHTC housing. Nearly 100 of these units are scattered-site single-family homes, duplexes, and triplexes. SHA administers the Section 8 Housing Choice Voucher and Moderate Rehabilitation Programs. As a public corporation and the City’s lead housing agency, chartered by and through the City of Salem, SHA owns real estate assets (land and buildings) totaling $32 million and manages an annual operating budget of $22 million.
SHA has expertise with multiple funding sources as a project sponsor, owner, and manager. It has directly developed 11 of the 12 multifamily developments it owns. Development funding sources have included: Low-Income Housing Tax Credits, Oregon Affordable Housing Tax Credits, HOME funds, Community Development Block Grants, American Recovery and Reinvestment Act funds, the HUD Capital Fund Program, tax-exempt bonds, and HUD Green Grants. SHA is also continuously building operational, technical, and management capacity to provide high quality, healthy living environments for its residents.
Staff have completed asset management and portfolio preservation curriculum to bring new systems of intelligent oversight of monthly project financial indicators. To ensure organizational cohesion, staff are also cross-trained on accounting measures and property management strategies. All staff attend classes on Fair Housing and ADA and Section 504 compliance, and 5% of SHA’s public housing stock is accessible. SHA’s proactive approach to its service mission has yielded other accomplishments, such as the consolidation of comparable waitlist systems and assisting over 1,000 households progress toward self-sufficiency through counseling, case management, and employment direction.
Nicole Utz
AIC Administrator
Attachments: None