R-017-2018 - Affordable Housing Notice of Funding Availability PolicyR 18-2
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. R-17-2018
Affordable Housing Notice of Funding Availability Policy
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT
AGENCY OF SALT LAKE CITY ADOPTING AN AFFORDABLE HOUSING NOTICE
OF FUNDING AVAILABILITY POLICY
WHEREAS, the Redevelopment Agency of Salt Lake City ("RDA") was created to transact
the business and exercise the powers provided for in the Utah Community Reinvestment
Agency Act ("Act").
WHEREAS, the Act provides that tax increment can be utilized within the municipal
boundaries of the RDA to pay for all or a part of the cost of land, construction of, or
rehabilitation of housing.
WHEREAS, the RDA supports the implementation of Salt Lake City's Comprehensive
Housing Policy, City Housing Plan, and Master Plans.
WHEREAS, in December of 2017, the RDA Board of Directors ("Board") set aside $10
million for an Affordable Housing Notice of Funding Availability ("NOFA"), intended to
be a competitive and transparent public process to be administered by the RDA, for which
any developer or community group may apply for funding for a project that meets identified
affordable housing goals.
WHEREAS, the Board intends to appropriate the $10 million after it approves guiding
policies for the NOFA.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, that the following policy
guidelines for the NOFA are adopted:
1. PURPOSE
The purpose of the NOFA is to provide low cost financial assistance to incentivize the
development and preservation of affordable housing within Salt Lake City municipal
boundaries. Funding shall be distributed according to a competitive and transparent
application process. Developers that demonstrate their ability to 1) construct and/or
rehabilitate affordable housing developments, 2) align projects with identified affordable
housing priorities, and 3) maintain affordable housing developments are encouraged to
submit applications.
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2. ELIGIBILITY AND REQUIREMENTS
Applicants and projects shall meet the following standards:
2.1 Eligible Applicants: Applications shall be accepted from entities and organizations
with affordable housing development experience, as follows:
i. For -profit corporations, partnerships, joint ventures, or sole proprietors.
ii. Private incorporated non-profit agencies with IRS 501(c) designation.
iii. Public housing agencies or units of local government.
2.2 Eligible Project Types: Eligible project types include the following:
i. New Construction: Construction of new multifamily housing.
ii. Adaptive Reuse: Conversion or adaptive reuse of existing non-residential
structures for housing.
iii. Rehabilitation: Substantial rehabilitation of existing substandard multifamily
housing units that do not meet the City's minimum housing code.
2.3 Eligible Costs: Eligible activities include land/property acquisition, hard
construction costs, site improvements, and related soft costs.
2.4 Site Control: Evidence of site control must be demonstrated through ownership,
option, sale agreement, or long-term lease.
2.5 Minimum Affordability: A minimum of 20% of the project's total residential units
must be affordable. For a unit to be considered affordable, its rent must be restricted
as affordable to households earning 60% of the area median income ("AMI") and
below as per guidelines established by the U.S. Department of Housing and Urban
Development. RDA funding shall be sized in proportion to the affordable
component, taking into consideration the AMI structure and number of units within
the project.
2.6 Policies and Master Plans: Projects shall align with Salt Lake City's Comprehensive
Housing Policy, City Housing Plan, and Master Plans.
2.7 Project Priorities: Projects shall align with current affordable housing priorities as
established by the Board and Salt Lake City Council.
2.8 Funding Maximum and Reasonableness: RDA funds shall be limited to 20% of the
project's total development cost. Projects shall demonstrate that RDA funding is
necessary for the project to succeed and that the request is reasonable.
2.9 Design Requirements: Projects shall support the RDA's design guidelines and
comply with all applicable Salt Lake City building codes and ordinances.
3. FUNDING PRIORITIES
Funding priorities shall be as follows:
3.1 Transit Proximity: Priority will be given to projects that are located within 1/2 mile
walking distance of a TRAX station, S Line station, or other station/stop on a
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frequent transit network line as identified in the Transit Master Plan to encourage
access to public transit.
3.2 Equity / Geographic Distribution: Priority will be given to projects located within
High Opportunity Areas to encourage geographic distribution of affordable housing
throughout Salt Lake City. High Opportunity Areas shall be defined as geographical
locations within the city that provide conditions that expand a person's likelihood for
social mobility as identified through an analysis of quality -of -life indicators.
3.3 Mixed Income: Priority will be given to projects that are mixed -income and diversify
the economic mix of the neighborhood to promote economically integrated
communities. All projects shall have a mix of affordable and market -rate units.
Projects located within a High Opportunity Area shall have a higher percentage of
affordable units, while projects located in areas with a concentration of affordable
housing shall have a lower percentage of affordable units.
3.4 Displacement Prevention: Priority will be given to projects that limit, prevent, or
successfully mitigate the displacement of existing affordable housing units and/or
low-income residents to avert low-income households from being impacted by
development activities. Projects shall be designed to minimize the displacement of
low income individuals and families, and, if displacement occurs, the Uniform
Relocation Assistance and Real Property Acquisition Act shall be complied with.
3.5 Diversity and Innovation of Housing Types: Priority will be given to the following
to support innovative design and a spectrum of housing types:
i. Adaptive reuse of existing structures as housing
ii. Missing middle housing (i.e. townhomes, courtyard apartments, small scale
apartments)
iii. Family housing (2+ bedrooms) in the urban core
iv. Housing with innovative parking solutions
v. Housing with high -quality and innovative construction materials and design
vi. Housing that incorporates public or private amenities
3.6 Neighborhood Revitalization: Priority will be given to projects located in RDA
project areas to support neighborhoods prioritized for redevelopment and the
generation of future tax increment.
3.7 Underserved Populations: Priority will be given to projects that include units
targeted to households at 40% of the AMI and below, vulnerable populations, and
persons with disabilities to support housing for underserved populations.
3.8 Long-term Affordability: Priority will be given to projects that provide long-term
affordability, and that create a net increase in affordable units or secure affordability
for units/projects that are at risk of conversion to market rate.
3.9 Sustainability: Priority will be given to projects that demonstrate a commitment to
an industry -recognized sustainable building certification program to promote a built
environment that assists with conserving resources and lowering utility costs for
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residents.
3.10 Leveraging: Priority will be given to projects with significant leveraging of non-
RDA/City sources of funding to encourage leveraging of private investment.
3.11 Financial Viability: Priority will be given to projects that provide long-term positive
cash flow and/or repayment of RDA -held debt to support projects that are financially
viable.
4. FUNDING TERMS AND CONDITIONS
Funding shall expand housing opportunities for low -and moderate -income households by
reducing a project's financing cost, thereby facilitating lower housing costs for tenants.
Flexibility shall be provided to accommodate a wide range of projects that may be
dependent upon myriad of underwriting standards by outside lenders. With this flexibility
in mind, funding shall generally be provided as loans pursuant to the following terms
and conditions:
4.1 Term: Financing shall generally be in the form of long-term loans for permanent
financing. In addition, short-term loans may be provided for land acquisition and
construction financing.
4.2 Interest Rate: The interest rate for loans shall generally range from 1% to 3% and
shall be established on a case -by -case basis depending on the project's projected
capacity for repayment. Interest on loans shall accrue annually as simple interest.
4.3 Repayment: Loans shall be made as deferred payment loans or cash flow payment
loans that are payable in full on sale, on change of use, or at the end of the loan term.
Cash flow payment loans, or loans requiring periodic payment of some or all interest,
shall be required if project proformas indicate that the borrower shall be able to make
payments and meet expenses consistent with rent limits.
4.4 Subordination: Loans may be subordinated. All loans shall be secured by a deed of
trust on the property.
4.5 Affordable Housing Covenant: A covenant shall be recorded against the property
that requires continued use of the units funded by the RDA as affordable housing for
the stated term of the loan or 30 years, whichever is greater.
5. EVALUATION & APPROVAL PROCESS
The RDA shall administer a five -step evaluation and approval process as follows:
5.1 Application: The RDA shall administer a transparent application process.
5.2 Eligibility Review: The RDA shall conduct a review to determine whether
applications conform to eligibility requirements.
5.3 Project Evaluation: Applications that meet eligibility requirements shall be
evaluated, ranked, and compared to other projects with similar characteristics.
5.4 Project Selection: The Project Selection process shall be carried out in two subparts
as follows:
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i. RDA Finance Committee: Applications and supporting material shall be
forwarded to the RDA Finance Committee. Projects that the Committee finds
to score competitively compared with other proposed projects of similar type
shall be recommended to the RDA Board for a funding allocation.
ii. RDA Board of Directors: The RDA Board of Directors shall make the final
selection of projects to receive a funding allocation.
5.5 Funding Award: The project funding process shall be carried out in two subparts as
follows:
i. Conditional Commitment Period: The RDA shall issue a Conditional
Commitment letter to those applications that are selected for a funding
allocation by the RDA Board. The Conditional Commitment letter between
the RDA and the applicant shall contain the covenants, terms and conditions
upon which the RDA shall provide financial assistance to the proposed
project once financial, legal, and regulatory approvals are obtained. The
NOFA shall set forth the process for establishing the term of the conditional
commitment and extension of the term.
ii. Firm Commitment & Loan Closing: Projects that successfully meet
conditions shall be invited to execute a Letter of Commitment that finalizes
the loan terms, subject to a set of conditions precedent to closing.
6. FUNDS AVAILABILITY
If the RDA does not enter into commitment letters to disburse the full amount of
available funds, or of funds that are committed but never used, the RDA shall reopen the
application process.
7. MONITORING AND COMPLIANCE
The RDA shall be required to monitor, or contract with a third party to monitor, the
projects funded through the NOFA. Monitoring shall evaluate and ensure that projects
are complying with affordability requirements, applicable funding priority polices, and
other requirements as determined in the loan agreement.
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Passed by the Board of Directors of the ' e• velop ent Agency of Salt Lake City, this
12th day of June , 2018
erek ' i c en, Chairman
Transmitted to the Executive Director on June 13, 2018
The Executive Director:
i- does not request reconsideration
requests reconsideration at the next regular Agency meeting.
Jacqueline M. Biskupski, Executive Director
Approved as to form: "'{r� 1� =t� pORATF n\
Salt Lake City Attorney's Offic4cr w o 1
Katherine N. Lewis • Z 1%
•`4•S'ICT LA
Date: 6(2-9I (L�
ATTEST:
HB ATTY-#69273-v3-Resolution_Housing_NOFA.docx
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