Transmittal - 3/8/2022CITY COUNCIL OF SALT LAKE CITY
451 SOUTH STATE STREET, ROOM 304
P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476
SLCCOUNCIL.COM
TEL 801-535-7600 FAX 801-535-7651
BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM:Allison Rowland
Budget & Policy Analyst
DATE:March 8, 2022
RE: INFORMATIONAL: FISCAL YEAR 2022-23 HOUSING DEVELOPMENT FUNDING
STRATEGY
ISSUE-AT-A-GLANCE
This briefing is designed as an introduction for Board Members to the proposed Fiscal Year 2023 Housing
Development Funding Strategy. This briefing will focus on Annual Housing Priorities and Housing Activities
(that is, the tools used to advance the Priorities). RDA staff proposes to reduce the number of Housing Priorities
that were adopted by the Board in the FY22 Strategy, reducing from eleven to four or fewer (See item C below).
The longer list of Priorities from FY22, reproduced in the transmittal’s Attachment A, would still allow
developers to receive 0.5% discounts from the standard loan interest rates. At this time, no funding proposals
are provided by RDA staff, though they suggest the Board consider discussing potential funding levels for the
Housing Activities (perhaps as percentages of a total) as a preliminary step.
Goal of the briefing: Discuss the proposed Fiscal Year 2023 Housing Priorities and Housing Activities and
provide direction to RDA staff.
BACKGROUND AND ADDITIONAL INFORMATION
A. Background. The guiding polices for the annual Affordable Housing Strategy are the Housing Allocation
Funds Policy and Housing Development Loan Program (HDLP) Policy, which were adopted by the Board
in 2021. As outlined in these policies, RDA staff prepares a proposed Strategy—including a resolution and
funding allocations—for the Board’s consideration and approval. During the broader City budget discussions
(typically in May) the Board would finalize the funding amounts outlined in the Strategy.
1.Housing Allocation Funds Policy. The Housing Allocation Funds Policy (Attachment C1) sets up
four housing funds (Primary; Secondary; the Housing Development Fund; and the Westside
Item Schedule:
Briefing: March 8, 2022
Set Date: N/A
Public Hearing: N/A
Potential Action: N/A
Page | 2
Community Initiative). RDA staff account for the revenues, expenditures, interest, payments, and
repayments for each fund source separately. The annual budgeting process laid out in the policy
includes the Housing Development Funding Strategy. Per policy, the Strategy includes:
a. a projected revenue amount proposed by RDA staff to be allocated to the Housing Funds, and
b. a proposed funding allocation among the Housing Activities (for example, gap financing loans,
property acquisition) approved annually by the Board.
2.Housing Development Loan Program (HDLP) Policy. The Housing Development Loan
Program (HDLP) Policy (Attachment C2) defines one of the four typical Activities used to implement
the Annual Priorities: the Housing Development Loan Program. The purpose of this program is to
provide low-cost financial assistance to incentivize the development and preservation of affordable
housing in Salt Lake City. Other Activities in the proposed FY23 Annual Priorities are Land Acquisition;
Shared Equity Housing; and ADU Assistance.
B. Board Prerogatives. After adopting the annual Housing Development Funding Strategy, the RDA Board
retains the option to make policy changes among adopted housing Activities or budget allocations at any
time during the year. In addition, the Board reviews and considers each specific loan project proposal before
it may be approved for funding. The Board also can suspend any adopted policies under special
circumstances for a specific project proposal.
C. FY23 Proposed Funding Priorities. For FY23, RDA staff recommends limiting the annual housing
priorities to the four listed here, or fewer:
1. Affordable Homeownership;
2. Family Housing (units with 3 or more bedrooms);
3. Deeply Affordable Housing (units at or below 40% AMI);
4. Missing Middle or Unique Housing Types (tiny, modular, prefab, ADUs).
Policy Question: Does the Board wish to approve the proposed list of FY23 Priorities, or
omitting or adding items to the proposed list?
D. FY23 Proposed Funding Activities. RDA staff would use the following tools to advance the proposed
Priorities:
1. A shared equity model to promote Affordable Home Ownership, and Family Housing;
2. Land acquisition to promote Affordable Home Ownership, Family Housing, and Missing Middle
Housing;
3. The Housing Development Loan Program for Family Housing, and Deeply Affordable Housing;
4. Assistance for Accessory Dwelling Units (ADUs) for Missing Middle Housing.
Policy Question: Does the Board wish to approve the proposed list of FY23 Activities, or
discuss omitting or adding items to the proposed list?
E. Results of the FY22 Project Selection Process. The RDA’s transmittal notes two limitations in the
extent to which annual Priorities are reflected in specific projects proposed by staff to the Board for funding.
1. The highest-ranking Priorities are not necessarily incorporated in project submissions more
frequently than other priorities, because of "other important review standards besides the priorities
that projects are evaluated against such as having other sources of financing secured.” These review
standards are contained in the 2021 NOFA guidelines and application handbook, as follows:
a. Alignment with project priorities;
b. Content and quality of the project narrative;
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c. Qualifications and experience of the applicant and development team;
d. Content, effectiveness, and appropriateness of the budget, sources and uses, operating
proforma, and related assumptions;
e. The readiness of the project to proceed to construction;
f. Any and all content regarding building and site design;
Policy Question: Some Board Members have noted this limitation and suggested that re-
evaluation of the review standards could reveal ways to address how this apparent mismatch
may be remedied, as well as to expand opportunities for RDA funding to a wider variety of
developers. The Board may wish to ask RDA staff how each review standard is
weighted, whether any since standard results in automatic rejection of an
application, and other related questions. Alternatively, the Board could request RDA
staff conduct a deeper analysis of these issues and report back to them in a future
meeting.
2. Another limitation noted by RDA staff is that home ownership projects don’t necessarily qualify for
NOFA: “[G]uidelines state that RDA funds should be limited to 10% or less of the project’s financing
sources, but homeownership projects tend to need a larger, initial subsidy to reduce a home’s price
[to] below market value.”
Policy Question: Would the Board like to consider the costs and benefits of changing
this percentage for homeownership projects? Alternatively, the Board could request
RDA staff analyze options to address this limitation and report back to them in a
future meeting.
POLICY QUESTIONS
1.The Board may wish to clarify with RDA staff their preference for the timing of a
presentation of proposed Housing Fund Allocations—that is, the estimated amount of
revenue in each of the four existing housing funds and how this is allocated to each
Housing Activity. The Board may wish to review estimated dollar amounts in April, in tandem with a
proposed FY23 Housing Development Funding Strategy resolution, which would allow the Board to
consider allocations before budget discussions begin in May. Both the proposed total funding dedicated to
affordable housing projects, and the allocation of this amount among different program categories are
subject to Board approval as part of the RDA’s annual budget process.
2.Does the Board wish to be informed of updated balances in each of the four Housing Fund
before making decisions about allocations? Similarly, The Board may wish to ask about the
plan for dealing with any surpluses or shortfalls in actual revenue compared to the revenue
estimates. Will the RDA staff return to the Board for authorization to make changes to the
amounts allocated to each Activity, for example, through budget amendments?
3.The Board may wish to ask for an update from RDA staff on guiding policies for the
Westside Community Initiative.
4. For the FY22 Housing Funding Strategy, the Board requested RDA staff research and consider alternative
ways to encourage ADU construction across the City. The Board may wish to request a briefing on
the results of this research, and specifically whether there a way to further the City’s equity
goals through programs to assist homeowners to build ADUs?
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _______________
RDA Housing Allocation Funds Policy
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF
SALT LAKE CITY ADOPTING A POLICY FOR THE ALLOCATION OF HOUSING FUNDS
WITH RESPECT TO DEDICATING AND DIRECTING RESOURCES FOR THE DEVELOPMENT
AND PRESERVATION OF HOUSING.
WHEREAS, Salt Lake City has an adopted housing plan that identifies housing needs,
priorities, and goals on a citywide basis (“Housing Plan”).
WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) has adopted project
area plans that identify housing needs, priorities, and goals on a project area basis (“Project Area
Plans”).
WHEREAS, the RDA supports the implementation of the Housing Plan and Project Area
Plans through various funding allocations that are utilized for the development and preservation of
housing.
WHEREAS, Utah Code Title 17C Community Reinvestment Agency Act (the “CRA Act”)
provides that a portion of tax increment is required to be allocated for housing and used for the
purposes described in Section 17C-1-412.
WHEREAS, the CRA Act provides that additional tax increment may be allocated on a
discretionary basis for housing and used for the purposes described in Section 17C-1-411.
WHEREAS, Utah Code Title 11-58 Utah Inland Port Authority Act (the “Inland Port Act”)
provides that a portion of tax differential generated within Inland Port Authority Jurisdictional Land
shall be paid to the RDA to be allocated for housing and used for the purposes described in Section
11-58-601(6)(b).
WHEREAS, the Salt Lake City Council and the RDA Board of Directors (“Board”) may
allocate other revenue sources, including but not limited to sales tax revenues, for the development
and preservation of housing.
WHEREAS, the Board desires to establish a policy with respect to dedicating and directing
resources for the development and preservation of housing.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
REDEVELOPMENT AGENCY OF SALT LAKE CITY, as follows:
1.Scope. The RDA Housing Allocation Policy (“Policy”) contains the processes and guidelines for
coordinating and allocating tax increment, tax differential, sales tax, and other revenues for the
development and preservation of housing.
2020-5566
R-4-2021
2.RDA Housing Funds. The RDA shall establish and maintain multiple housing funds based on
the fund source and separately account for the revenues, expenditures, interest, payments and
repayments for each fund source (collectively the “Housing Funds”). Maintaining separate
Housing Funds will allow the RDA to provide control and oversight to comply with the various
statutory requirements for each funding source and to allow for the prioritization within each
funding source for a specific purpose, need, or policy objective. The Housing Funds include:
a.Primary Housing Fund
i.Source of Funds: Tax increment required to be allocated for housing pursuant
to the CRA Act.
ii.Eligible Uses of Funds: Funds shall be utilized for the purposes described in
Section 17C-1-412 of the CRA Act.
iii.Policy Priorities: Funds shall be prioritized to address citywide housing goals
and objectives as identified in the Housing Plan.
b.Secondary Housing Fund
i.Source of Funds: Additional tax increment that may be allocated on a
discretionary basis for housing pursuant to the CRA Act.
ii.Eligible Uses of Funds: Funds shall be utilized for the purposes described in
Section 17C-1-411 of the CRA Act.
iii.Policy Priorities: Funds shall be prioritized to address the housing goals and
needs identified in Project Area Plans.
c.Northwest Quadrant Housing Fund
i.Source of Funds: A portion of the property tax differential collected by the
Inland Port Authority to be allocated to the RDA for affordable housing.
ii.Eligible Uses of Funds: Funds shall be utilized for the purposes described in
Section 11-58-601(6)(b) of the Inland Port Act.
iii.Policy Priorities: Funds shall be prioritized for the neighborhoods adjacent to
the Inland Port Jurisdictional Land (generally defined as neighborhoods west
of I-15) to 1) address and mitigate potential impacts from Inland Port
development activities and 2) improve opportunity indicators within these
neighborhoods.
d.Housing Development Fund
i.Source of Funds: Additional funds, including but not limited to sales tax
revenues, that may be allocated to or obtained by the RDA for the
development and preservation of housing.
ii.Eligible Uses of Funds: Activities to promote the development and
preservation of affordable and mixed-income housing, including costs
associated with site acquisition, site remediation, capital improvements, new
construction, and rehabilitation.
iii.Policy Priorities: Funds shall be prioritized to address the housing goals and
needs of identified in the Housing Plan.
3.Annual Budgeting Process. The following steps shall be utilized to budget Housing Funds on an
annual basis:
a.Funding Strategy: Prior to the annual budget process, the RDA shall annually present to
the Board a Housing Development Funding Strategy (“Funding Strategy”) that includes:
i.A projected amount of revenue to be allocated to the Housing Funds for the
upcoming fiscal year.
ii.Proposed funding allocations for housing activities (i.e. gap financing loans,
property acquisition, etc.) and funding priorities for the upcoming fiscal year.
Proposed funding allocations shall be targeted to address current needs,
leverage available opportunities, be coordinated with other City resources,
and align with the standards and priorities for the Housing Funds as
established in Section 2 herein.
b.Annual Budget Allocations: The Board shall consider the Funding Strategy as part of the
annual budget adoption process.
c.Implementation: Once budget allocations are finalized, the RDA will implement projects
and programs according to applicable RDA policies and procedures.
4.Reporting Requirements. The RDA shall provide a written briefing to the Board, within 60
days of the end of each fiscal year, which contains the following information:
a.The year-end balance of the Housing Funds.
b.An accounting of programs and projects funded from the Housing Funds over the last
fiscal year, including the following information itemized by project:
i.Project address
ii.Development partner
iii.Amount of Housing Funds committed
iv.Total project cost
v.The scope and status of improvements
vi.The total number of residential units with a corresponding accounting of
affordability levels by area median income (AMI).
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______ day
of ________________, 20__.
________________________________
Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Allison Parks
Date:____________________________
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
December 20, 2020
9thFebruary 21
Ana Valdemoros (May 17, 2021 13:31 MDT)
Erin Mendenhall (May 17, 2021 13:36 MDT)
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Cindy Trishman (May 17, 2021 16:22 MDT)
RDA Resolution R-4-2021 (Housing Allocation
Funds Policy) adopted 2-9-21
Final Audit Report 2021-05-17
Created:2021-03-02
By:Kory Solorio (kory.solorio@slcgov.com)
Status:Signed
Transaction ID:CBJCHBCAABAAHe6z6wf-1vvCLLkAwG3dXBWbHwCPnGH3
"RDA Resolution R-4-2021 (Housing Allocation Funds Policy) ad
opted 2-9-21" History
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Agreement completed.
2021-05-17 - 10:22:47 PM GMT
1
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _____________
Housing Development Loan Program Policy
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT
AGENCY OF SALT LAKE CITY ADOPTING A HOUSING DEVELOPMENT LOAN
PROGRAM POLICY AND REPEALING THE AFFORDABLE HOUSING NOTICE OF
FUNDING AVAILABILITY POLICY
WHEREAS, Salt Lake City has an adopted housing plan that identifies housing
needs, priorities, and goals on a citywide basis (“Housing Plan”).
WHEREAS, the Board of Directors (the “Board”) of the Redevelopment Agency
of Salt Lake City (“RDA”) has adopted project area plans that identify housing needs,
priorities, and goals on a project area basis (“Project Area Plans”).
WHEREAS, on June 12, 2018, the Board adopted Resolution R-17-2018,
Affordable Housing Notice of Funding Availability Policy (“NOFA Policy”).
WHEREAS, the RDA supports the implementation of the Housing Plan and
Project Area Plans through various funding sources that are further described in the RDA
Housing Allocation Funds Policy adopted by the Board on February 9, 2021 (“Funds
Policy”).
WHEREAS, through the Funds Policy, the Board may dedicate funds to be
administered for the development and preservation of affordable housing.
WHEREAS, the Board desires to repeal the NOFA Policy and to establish a housing
development loan program to centralize the application, underwriting, and approval process
across all funding sources identified in the Funds Policy, providing a one-stop-shop for
community partners to access resources for the development and preservation of affordable
housing.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, that the NOFA Policy
adopted pursuant to Resolution R-17-2018 is repealed in its entirety and the following policy
for a Housing Development Loan Program is adopted:
1.PURPOSE
The purpose of the Housing Development Loan Program (“HDLP”) is to provide low
cost financial assistance to incentivize the development and preservation of affordable
housing within Salt Lake City municipal boundaries. The HDLP shall provide a
centralized application, underwriting, and approval process regardless of the fund
source.
R-7-2021
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2.INTENT
The Board intends that funds allocated through the HDLP:
a.Provide a mix of affordable housing, serving a range of households and income
levels, consistent with income limits and affordability requirements for each fund
source, to promote housing opportunity and choice throughout the City for
household sizes ranging from single persons to families of various sizes.
b.Foster a mix of household incomes in projects and neighborhoods and to disperse
affordable housing projects throughout the City to encourage a balance of
incomes in all neighborhoods and communities.
c.Promote equity and anti-displacement efforts through the development and
preservation of affordable housing in low-income neighborhoods where
underserved groups have historic ties, including neighborhoods where low
income individuals and families are at high risk of displacement.
d.Contribute to the development of sustainable, walkable neighborhoods to expand
housing choice near transportation, services, and economic opportunity.
e.Support an array of scale of project types, including detached housing, accessory
dwelling units, rowhouses, and small to large scale multifamily buildings, that
contribute to neighborhood context and livability.
f.Incorporate green-building elements and energy efficiency to lower housing
expenses, conserve resources, and promote resiliency.
g.Leverage private and non-city funding sources to ensure the greatest number of
quality affordable housing units are preserved or produced.
h.Be provided as loans that are repaid over time and not grants, forgivable loans,
or indefinitely deferred loans.
3.SOURCE OF FUNDS
HDLP activities shall be funded through a combination of fund sources (collectively the
“Housing Funds”) as established through the Funds Policy. Funding allocations shall be
administered through the HDLP to a project directly from an individual fund source with
revenues, expenditures, interest, payments, and repayments accounted for from the fund
source.
Each of the individual fund sources that comprise the Housing Funds operates under
separate state or local laws and regulations. Laws and regulations include restrictions on
the incomes of households served, maximum allowable rents, and eligible activities.
4.ANNUAL BUDGET PROCESS
As further described in the Funds Policy, the RDA shall present an Annual Housing
Development Funding Strategy (“Funding Strategy”) prior to the annual budget process
that shall include proposed funding priorities and revenues to be administered through
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the HDLP for the next fiscal year. The Board shall consider the Funding Strategy as part
of the annual budget adoption process.
5.FUNDING PRIORITIES
To provide flexibility to address current needs and policies, funding priorities shall be
proposed on an annual basis through the Funding Strategy, subject to approval by the
Board. Funding priorities shall align with policies as adopted by the Board and Salt Lake
City Council including the Housing Plan, Project Area Plans, RDA Guiding Framework,
and Funds Policy.
6.FUNDS ADMINISTRATION PROCESS
Funding shall be administered through a transparent notice of funding availability
(“NOFA”) process and shall incorporate the funding priorities as determined annually
by the Board. Funds from multiple fund sources may be combined into a consolidated
NOFA or a NOFA may be issued from one fund source. NOFAs may be offered on an
annual basis or multiple times per year and can be competitive or open-ended depending
on availability of funds, priorities, and demand.
7.BASIC ELIGIBILITY
Projects eligible for funding through the HDLP shall at a minimum meet these basic
eligibility requirements, as well as specific requirements that may be set forth in
individual NOFAs as they are issued.
a.Applicant Types: Eligible applicants include 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.
b.Project Types: The new construction or substantial rehabilitation of affordable,
mixed-use and/or mixed-income housing.
c.Uses of Funds: Land/property acquisition, hard construction costs, site
improvements, and related soft costs.
d.Area Median Income (“AMI”): AMI requirements shall reflect the policies and
regulations of the Housing Funds as defined through the Funds Policy.
e.Financing Gap: Projects shall demonstrate that RDA funding is necessary for the
project to succeed and that the request is reasonable. Applicants must obtain
commercial loans sized with the highest loan-to-value and lowest debt service
parameters that are commercially available in the marketplace and aggressively
pursue other funding sources to the fullest extent possible to minimize the HDLP
funding request.
f.Site Control: Evidence of site control must be demonstrated through ownership,
option, sale agreement, long-term lease, or equivalent.
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g.Policies and Master Plans: Projects shall align with the Housing Plan, Project
Area Plans, Master Plans, and other applicable adopted plans and policies.
h.Good Standing: Applicants and affiliated entities must be in good standing on all
existing contracts administered by Salt Lake City, the RDA, Utah Housing
Corporation, and other State and local entities.
i.Relocation Plan (if applicable): Displacement is strongly discouraged. However,
if it is necessary and unavoidable, the developer must submit a relocation plan
that complies with applicable federal, state, and local policies for temporary or
permanent displacement.
j.Design: Projects shall align with applicable design guidelines and comply with
all applicable Salt Lake City building and zoning codes and ordinances.
8.UNDERWRITING STANDARDS
Funding shall expand housing opportunities for low-and moderate-income households by
reducing a project’s financing cost. 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 terms and conditions outlined in Exhibit A.
9.EVALUATION & APPROVAL PROCESS
For each issued NOFA, the RDA shall evaluate and consider applications for approval
as follows:
a.Eligibility Review: Funding applications shall be reviewed and evaluated in
detail by RDA staff based on the requirements listed herein, specific Housing
Funds requirements, and additional criteria published in the relevant NOFA.
b.Review Committee: For applications that meet the basic eligibility requirements,
applications and supporting materials shall be forwarded to a review committee
that shall be comprised of members with experience relevant to the affordable
housing industry, and may be comprised of RDA/City staff, finance
professionals, affordable housing experts, and/or real estate development
professionals. The review committee shall analyze and rank applications based
on the polices contained herein and the criteria published in the NOFA. Projects
that the Committee finds to rank competitively compared with other proposed
projects of similar type shall be recommended to the RDA Board for a funding
allocation.
c.RDA Board of Directors: The RDA Board of Directors shall make the final
selection of projects to receive a funding allocation.
d.Funding Commitment: 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
5
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 may provide financial assistance to the proposed project
once financial, legal, and regulatory approvals are obtained.
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.
10.MONITORING AND COMPLIANCE
The RDA shall be required to monitor, or contract with a third party to monitor, the
projects funded through the HDLP. Monitoring shall evaluate and ensure that projects
are complying with affordability requirements and other requirements as determined in
the loan agreement.
11.LOAN MODIFICATIONS
In the event of extenuating circumstances, the RDA may provide payment forbearance,
payment deferment, or loan write-down. Such adjustment to loan terms shall be
considered on a case-by-case basis and shall be subject to a thorough review of the
project’s financial standing and other relevant information. The process for providing
loan modifications shall be considered and authorized as follows:
a.Forbearance/Deferment: The Executive Director of the RDA may elect to
provide the Borrower a temporary forbearance or deferment of payment for up
to one (1) year. For periods of forbearance or deferment longer than one (1)
year, the Review Committee shall provide a recommendation that is forwarded
to the Board, who shall consider and act upon all such requests.
b.Loan Write-down: The Review Committee shall provide a recommendation that
is forwarded to the Board, who shall consider and act upon all such requests.
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EXHIBIT A: Standard Loan Terms and Conditions
Standard loan terms and conditions for I) Gap Financing: Rental Construction to Permanent,
II) Property Acquisition, and III) Gap Financing: Homeownership Construction are as
follows:
I. GAP FINANCING: RENTAL CONSTRUCTION TO PERMANENT
Limits to Assistance:
•Maximize Other Sources: Applicants must demonstrate that they have
maximized other available financing sources thereby limiting HDLP funding to
the lowest amount necessary to close the funding gap and assure project
feasibility.
•Loan to Value: A loan-to-value limit is not applicable. However, land and project
costs shall be reasonable as compared similar projects in size, scope, and
location.
•Debt Service Coverage Ratio (DSCR): Repayment terms for amortizing HDLP
loans shall be calculated as described herein and shall be based on a DSCR of
1.10 inclusive of the RDA’s loan and all senior debt.
•Cash Flow: For loans that qualify for a cash flow repayment structure, pursuant
to the standards contained herein, applicants must demonstrate that the HDLP
loan can be repaid within its scheduled term or at the end of the term.
•Proportion to Affordability: Funding shall be sized in proportion to the affordable
component, taking into consideration the AMI structure and number of units in
the project.
Repayment:
•Depending on the project’s capacity for repayment, loans may be repaid as an
amortized loan, a cash flow loan based on available cash flow, or a combination
of both types of loan.
o Amortized Loan: The RDA shall determine what portion of its loan can
be paid on an amortized schedule with required payments using the
DSCR standards contained herein and the DSCR requirements of the
senior lender.
o Cash Flow Loan: If full amortization is not feasible due to limited cash
flow, funds shall be repaid from an agreed upon percentage split of
surplus cash flow. Cash flow loans shall be considered only for projects
that provide a high level of affordability, target a difficult to serve
population, or include other significant public benefit.
•At the RDA’s discretion, payments may not be required and interest may not
accrue or accrue at a reduced interest rate during the construction and lease-up
phase. Upon completion of construction, lease-up, project stabilization, or other
fixed date, loans shall begin to accrue interest and shall be subject to repayment.
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•Any accrued but unpaid interest and principal is due in full at loan maturity.
•Loans can be prepaid in whole or in part at any time without penalty. Prepayment
does not end the affordability period before its original end date.
Term:
•RDA loan terms shall generally match the term of permanent senior debt,
generally up to a maximum of 30-years for projects with non-HUD financing and
up to a maximum of 40 years for projects with HUD financing.
•Commencement of the loan term and/or repayment period may be deferred for a
period of time to allow for completion of construction and lease-up phase.
Interest Rate:
•Base Interest Rate: The base interest rate shall be as follows:
o Amortized Loans: The current U.S. Treasury Yield Curve Rate for the
loan term plus 1%, locked in within a month of loan closing, with a
maximum base interest rate of 3%. The interest rate for loans with a term
longer than 30 years shall utilize the 30-year U.S. Treasury Yield Curve
Rate in this calculation.
o Cash Flow Loans: The current U.S. Treasury Yield Curve Rate for the
loan term plus 2%, locked in within a month of loan closing, with a
maximum base interest rate of 4%. The interest rate for loans with a term
longer than 30 years shall utilize the 30-year U.S. Treasury Yield Curve
Rate in this calculation.
•Interest shall accrue as simple interest.
•Funding Priority Incentives: Projects shall have the ability to reduce the Base
Interest Rate if the project meets the current funding priorities as established
annually pursuant to the Funds Policy. For each funding priority met, the project
is eligible to receive a .5% reduction from the Base Interest Rate, with the ability
to reduce the interest rate to a minimum of 1%.
•Interest rates are subject to an adjustment, of up a 1% deviation, based on project
cash flow and debt coverage ratio calculated at time of application and
underwriting.
Affordability Restriction:
•A restriction shall be recorded against the property that requires continued use of
the specified units as affordable housing for at least the same period as the senior
financing or a minimum of 30 years, whichever is greater. Both a rent and income
restriction shall be included to limit the maximum rent that can be charged for a
unit and to require that the unit be made available only to households with
qualifying incomes.
Subordination to Senior Debt:
8
•HDLP loans may be subordinated to leverage private financing, with the priority
among subsidy lenders typically established based upon size of the loans.
Security:
•Adequate security shall be required, generally in the form of a deed of trust,
promissory note, and guarantees.
Developer Fee:
•Given the rent restrictions on affordable housing projects, affordable housing
developments typically do not have substantial cash flow after debt service on
their primary loans. As such, developer fees are recognized as a significant part
of the income on which affordable housing organizations depend for their
operations. For projects utilizing a low-income housing tax credit (“LIHTC”)
program, the calculation to determine a maximum developer fee shall be
consistent with Utah Housing Corporation’s policy, which caps the maximum
developer fee. The maximum developer fee for projects not utilizing LIHTC shall
be evaluated on a case-by-case basis in the context of the proportion of affordable
units and AMIs.
Borrower Contribution:
•Borrowers shall contribute a source of financing to the project, whether through
an equity contribution or a deferred developer fee or a combination of both. The
level of borrower contribution shall be considered on a case-by-case basis and
shall be evaluated based on the type of ownership entity and level of public
benefit provided by the project.
•For Low Income Housing Tax Credit (“LIHTC”) projects that are requesting a
cash flow loan, the borrower shall maximize the amount of deferred developer
fee allowed under Utah Housing Corporation’s standards to be allowed in tax
credit basis and acceptable for their tax credit investor in that this amount must
be payable within a time frame allowed by the LIHTC program as approved by
the project’s tax counsel.
•Projects that have not maximized a developer fee, pursuant to the standards
contained herein, or that serve lower AMIs or special populations, such as
permanent supportive housing, may have the ability to waive the borrower
contribution.
Disbursement of Funds:
•Funding shall be disbursed as construction draws evidenced by supporting
documentation demonstrating that work has been completed and that the project
is in good financial and legal standing.
Other
•Loans are non-assumable without written permission from the RDA.
9
II.PROPERTY ACQUISITION
Limits to Assistance:
•Maximize Other Sources: Applicants must demonstrate that they have
maximized other available financing sources thereby limiting HDLP funding to
the lowest amount necessary to close the funding gap and assure project
feasibility.
•Loan to Value: Loans shall be sized to a loan-to-value limit of 90% of the as-is
appraised value inclusive of the RDA’s loan and all senior debt.
Repayment:
•Depending on the applicant’s capacity for repayment, loans may be repaid as a
deferred or interest-only loan.
•Any accrued but unpaid interest and principal is due in full at loan maturity.
•Loans can be prepaid in whole or in part at any time without penalty. Prepayment
does not end the affordability period before its original end date.
Term:
•The maximum loan term shall be 24-months with the ability for one 12-month
extension if the project is demonstrating a progression toward construction.
Interest Rate:
•Base Interest Rate: The base interest rate shall be the current U.S. Treasury Yield
for the loan term plus 2.5%, locked in within a month of loan closing, with a
maximum base interest rate of 3%.
•Interest shall accrue as simple interest.
•Funding Priority Incentives: Projects shall have the ability to reduce the Base
Interest Rate if the project meets the current funding priorities as established
pursuant to the Funds Policy. For each funding priority met, the project is eligible
to receive a .5% reduction from the Base Interest Rate, with the ability to reduce
the interest rate to a minimum of 1%.
•Interest shall accrue on all loan proceeds disbursed commencing on the date of
disbursement.
•Interest rates are subject to an adjustment, of up a 1% deviation, based on project
cash flow and debt coverage ratio calculated at time of application and
underwriting.
Affordability Restriction:
•A restriction shall be recorded against the property that requires continued use of
the specified units as affordable housing for at least the same period as the senior
financing or a minimum of 30 years, whichever is greater. Both a rent and income
10
restriction shall be included to limit the maximum rent that can be charged for a
unit and to require that the unit be made available only to households with
qualifying incomes.
Subordination to Senior Debt:
•HDLP loans may be subordinated to leverage private financing, with the priority
among subsidy lenders is typically established based upon size of the loans.
Security:
•Adequate security shall be required, generally in the form of a deed of trust,
promissory note, and guarantees.
Developer Fee:
•Developer fees are not an eligible cost for a property acquisition loan.
Disbursement of Funds:
•Funding may be disbursed at loan closing.
Other
•Loans are non-assumable without written permission from the RDA.
11
III.GAP FINANCING: HOMEOWNERSHIP CONSTRUCTION
Limits to Assistance:
•Maximize Other Sources: Applicants must demonstrate that they have
maximized other available financing sources thereby limiting HDLP funding to
the lowest amount necessary to close the funding gap and assure project
feasibility.
•Loan to Value: Loans shall be sized to a loan-to-value limit of 90% of the as-is
appraised value inclusive of the RDA’s loan and all senior debt.
•Proportion to Affordability: Funding shall be sized in proportion to the affordable
component, taking into consideration the AMI structure and number of units in
the project.
Repayment:
•Loans shall be repaid from the sale of housing units in the project. HDLP funds
may be repaid after payout to senior loans have been accounted for.
•Any accrued but unpaid interest and principal is due in full at loan maturity.
•Loans can be prepaid in whole or in part at any time without penalty.
Prepayment does not end the affordability period before its original end date.
Term:
•The maximum loan term shall be 36-months with the ability for one 12-month
extension if the project is demonstrating a progression toward completion.
Interest Rate:
•Base Interest Rate: The base interest rate shall be the current U.S. Treasury
Yield for the loan term plus 2.5%, locked in within a month of loan closing,
with a maximum base interest rate of 3%. Interest shall accrue as simple
interest.
•Funding Priority Incentives: Projects shall have the ability to reduce the Base
Interest Rate if the project meets the current funding priorities as established
pursuant to the Funds Policy. For each funding priority met, the project is
eligible to receive a .5% reduction from the Base Interest Rate, with the ability
to reduce the interest rate to a minimum of 1%.
•Interest shall accrue on all loan proceeds disbursed commencing on the date of
disbursement.
•Interest rates are subject to an adjustment, of up a 1% deviation, based on
project cash flow and debt coverage ratio calculated at time of application and
underwriting.
12
Affordability Restriction:
•A restriction shall be recorded against the property that requires continued use of
the specified units as affordable housing for at least the same period as the senior
financing or a minimum of 15 years, whichever is greater. Both a sales price and
income restriction shall be included to limit the maximum sales price that can be
charged for a unit and to require that the unit be made available only to
households with qualifying incomes.
Subordination to Senior Debt:
•HDLP loans may be subordinated to leverage private financing, with the
priority among subsidy lenders is typically established based upon size of the
loans.
Security:
•Adequate security shall be required, generally in the form of a deed of trust,
promissory note, and guarantees.
Developer Fee:
•Maximum developer fees shall be considered on a case-by-case basis and shall
be evaluated based on the affordability levels of the project, type of ownership
entity, and level of public benefit provided by the project.
Borrower Contribution:
•Borrowers shall contribute a source of financing to the project, whether through
an equity contribution or a deferred developer fee or a combination of both. The
level of borrower contribution shall be considered on a case-by-case basis and
shall be evaluated based on the affordability levels of the project, type of
ownership entity, and level of public benefit provided by the project.
•Deferred developer fees shall be paid after the HDLF loan has been fully
repaid.
Disbursement of Funds:
•Funding shall be disbursed as construction draws evidenced by supporting
documentation demonstrating that work has been completed and that the project
is in good financial and legal standing.
Other
•Loans are non-assumable without written permission from the RDA.
13
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this
_______ day of ________________, 2021.
________________________________
Ana Valdemoros, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Allison Parks
Date:____________________________
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
March 24, 2021
23 March
Ana Valdemoros (May 17, 2021 13:32 MDT)
Erin Mendenhall (May 17, 2021 13:37 MDT)
4
Cindy Trishman (May 17, 2021 16:21 MDT)
RDA Resolution R-7-2021 (Establishing the
Housing Development Loan Program Policy)
adopted 03-23-21
Final Audit Report 2021-05-17
Created:2021-04-05
By:Kory Solorio (kory.solorio@slcgov.com)
Status:Signed
Transaction ID:CBJCHBCAABAAInbPVjRTFBvmBeNQJ1-3Z0H2hHGhVuPA
"RDA Resolution R-7-2021 (Establishing the Housing Developm
ent Loan Program Policy) adopted 03-23-21" History
Document created by Kory Solorio (kory.solorio@slcgov.com)
2021-04-05 - 10:34:23 PM GMT- IP address: 204.124.13.151
Document emailed to Ana Valdemoros (ana.valdemoros@slcgov.com) for signature
2021-04-05 - 10:38:21 PM GMT
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Document e-signed by Ana Valdemoros (ana.valdemoros@slcgov.com)
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Signature Date: 2021-05-17 - 10:21:20 PM GMT - Time Source: server- IP address: 204.124.13.151
Agreement completed.
2021-05-17 - 10:21:20 PM GMT
HOUSING
FRAMEWORK
HOUSING FUNDS
ALLOCATION POLICY
PRIMARY
HOUSING
FUND $$$
ALLOCATIONS
ANNUAL
HOUSING
PRIORITIES
HOUSING
ACTIVITIES
ANNUAL HOUSING
FUNDING STRATEGY
HOUSING
DEVELOPMENT
FUND
WESTSIDE
COMMUNITY
INITIATIVE
SECONDARY
ADOPTED Q1 2021 YEARLY BOD APPROVAL
This policy established
guidelines for
allocating/directing
resources for housing
by funding source.
Also requires "Annual
Housing Funding
Strategy" (right) be
brought in front of
Board every year.
Bringing estimated
amounts to Board for
review next month
For your feedback today
For your feedback today
PRIMARY
HOUSING
DEVELOPMENT
FUND
WESTSIDE
COMMUNITY
INITIATIVE
SECONDARY
HOUSING
FUND $$$
ALLOCATIONS
housing fund allocations
Will bring projected fund balances to April Board meeting
$___
TBD
$___
TBD
$___
TBD
$___
TBD
ANNUAL
HOUSING
PRIORITIES
HOUSING
ACTIVITIES
ANNUAL HOUSING
FUNDING STRATEGY
AFFORDABLE
HOMEOWNER
-SHIP
annual housing priorities
Four priorities to focus on this FY; Seeking Board feedback today
MISSING
MIDDLE
HOUSING
FAMILY
HOUSING
DEEPLY
AFFORDABLE
UNITS
HOUSING
FUND $$$
ALLOCATIONS
ANNUAL
HOUSING
PRIORITIES
HOUSING
ACTIVITIES
ANNUAL HOUSING
FUNDING STRATEGY
ADU
ASSISTANCE
HOUSING
DEVELOPMENT
LOAN
PROGRAM
LAND
ACQUISITION
SHARED
EQUITY
HOUSING
housing ACTIVItIES
Tools/programs by which to achieve Priorities; Seeking Board feedback today
HOUSING
FUND $$$
ALLOCATIONS
ANNUAL
HOUSING
PRIORITIES
HOUSING
ACTIVITIES
ANNUAL HOUSING
FUNDING STRATEGY
housing ACTIVItIES
Housing Development Loan Program
Competitive NOFA
HOUSING
FUND $$$
ALLOCATIONS
ANNUAL
HOUSING
PRIORITIES
HOUSING
ACTIVITIES
ANNUAL HOUSING
FUNDING STRATEGY
Utilize interest rate reduction benchmarks for
competitive NOFA (Alignment with RDA's
Guiding Framework)
Board may choose to require family housing
and/or deeply affordable housing as threshold
FY23 Housing ActivitY IMPACT
HOUSING PRIORITIES
Affordable Home
Ownership
Family Housing
Deeply Affordable
Housing
Missing Middle
Housing
Shared Equity Model Land AcquisitionHousing Development
Loan Program
ADU Assistance
HOUSING ACTIVITIES
HOUSING
DEVELOPMENT
FUND
SECONDARYPRIMARY
WESTSIDE
COMMUNITY
INITIATIVE
housing fund
allocationsSTEP
FY23 ANNUAL HOUSING FUNDING STRATEGY
FAMILY
HOUSING
MISSING
MIDDLE
HOUSING
AFFORDABLE
HOME
OWNERSHIP
DEEPLY
AFFORDABLE
HOUSING
ANNUAL HOUSING
PRIORITIES
HOUSING
ACTIVITIESSTEPSTEP
LAND
ACQUISITION
ADU
ASSISTANCE
SHARED
EQUITY
HOUSING
HOUSING
DEV. LOAN
PROGRAM
For the RDA Board's Consideration
Is the Board in alignment with the proposed housing funding priorities?
Is the Board in alignment with the proposed housing activities?
Would the Board like to consider making family housing and/or deeply
affordable housing threshold for the competitive NOFA?
Next Steps
Projected housing fund balances and proposed allocations to housing activities
will be brought to the Board with the budget presentation in April.
Housing activities are approved as a part of the RDA budget approval.
Housing priorities are approved via resolution to be brought back to the Board.
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
DATE: February 18, 2022
PREPARED BY: Lauren Parisi & Tracy Tran, RDA Project Managers
RE: FY 2022-23 Housing Development Funding Strategy
REQUESTED ACTION: Briefing on the FY 2022-23 Housing Development Funding Strategy
POLICY ITEM: Affordable Housing
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: In 2021, the Board of Directors (“Board”) of the Redevelopment Agency of
Salt Lake City (“RDA”) adopted two policies to facilitate the funding and development of affordable
housing within City boundaries. First, the RDA Housing Allocations Funds Policy (“Funds Policy”)
establishes guidelines for allocating and directing resources for the development and preservation of
housing by funding source. Second, the Housing Development Loan Program (“HDLP”) Policy creates a
program that centralizes the application, underwriting, and approval process across all funding sources,
providing a one-stop-shop for community partners to access resources for the development and
preservation of affordable housing.
Both policies contemplate that annually, prior to the annual budget process, the RDA shall present to the
Board a Housing Development Funding Strategy (“Funding Strategy”) that includes:
• A projected amount of revenue to be allocated to each Housing Fund for the upcoming fiscal year
(approved as a part of RDA budget)
• Proposed housing funding priorities (“Funding Priorities”) for the upcoming fiscal year (approved
as separate resolution)
• Proposed funding allocations for specific housing activities (i.e. gap financing loans, property
acquisition, etc.) for the upcoming fiscal year (approved as a part of RDA budget)
See Figure 1 for a process step-by-step graphic.
2
Figure 1:
This memo reviews the proposed Funding Priorities and housing activities for FY23. These priorities and
activities are reviewed and approved on an annual basis to incorporate priorities of the Administration and
Board. The projected revenue to be allocated to each of the four Housing Funds (Primary Housing Fund,
Secondary Housing Fund, Westside Community Initiative Fund and Housing Development Fund) as well
as allocations of funding to each housing activity will be brought back to the Board as a part of the annual
budget discussion.
The Board may wish to discuss the proposed Funding Priorities and housing activities as described in this
memo and provide any feedback or direction on potential funding levels to certain housing activities when
the budget is brought for their review.
ANALYSIS & ISSUES:
1. FY22 Funding Strategy Process/Outcomes – During the 2021-2022 fiscal year, the Board
adopted a list of 13 affordable housing funding priorities (i.e. family housing, neighborhood safety,
etc.) ranked in importance – those ranked by a “3” being the highest priority, those ranked by a “2”
being mid-range priority, and those ranked by a “1” being the lowest priority for the fiscal year.
These priorities were utilized as a part of last year’s competitive affordable housing notice of
funding availability (NOFA) to score projects competitively. A .5% interest rate reduction was
then earned for every priority met, regardless of the ranking. Comprehensively, projects were
evaluated based on the following as stated in the 2021 NOFA guidelines and application handbook:
• Alignment with project priorities
• Content and quality of the project narrative
• Qualifications and experience of the applicant and development team
• Content, effectiveness, and appropriateness of the budget, sources and uses, operating proforma,
and related assumptions
3
• The readiness of the project to proceed to construction
• Any and all content regarding building and site design
The RDA’s competitive affordable housing NOFA is a very important program that affordable
housing developers rely on an annual basis; however, the highest-ranking priorities are not
necessarily incorporated in project submissions more frequently than other priorities. A reason for
this is, as listed above, there are other important review standards besides the priorities that projects
are evaluated against such as having other sources of financing secured. Additionally,
homeownership products may not qualify for the competitive NOFA. For example, the guidelines
state that RDA funds should be limited to 10% or less of the project’s financing sources, but
homeownership projects tend to need a larger, initial subsidy to reduce a home’s price below
market value.
Thus, this year’s Funding Strategy contemplates restructuring how the Funding Priorities are
applied to the competitive NOFA as well as utilizing other tools in the RDA’s toolbox such as land
acquisition to target certain housing goals more directly.
2. FY23 Proposed Funding Priorities – To be more intentional with affordable housing funds and
address the Board’s and Administration’s most pressing housing goals, RDA staff recommends
limiting the annual housing priorities to four or fewer. These goals address Mayor Mendenhall’s
goal within the 2022 Work Plan to maximize opportunities for perpetual housing affordability on
the westside in both rental housing and home ownership as well as limited commercial uses within
mixed use developments.
The four Funding Priorities proposed for the FY23 Funding Strategy are listed in bold below as
subsets of the RDA’s Livability Benchmark Public Benefits.
• Benchmark #1 Ownership – To encourage the creation of opportunities for residents/business
owners to building wealth and/or establish permanent roots through affordable home/commercial
ownership.
o AFFORDABLE HOMEOWNERSHIP
• Benchmark #2 Housing for Everyone – To promote housing for families, underserved populations
and extremely low income.
o FAMILY HOUSING (units with 3+ bedrooms)
o DEEPLY AFFORDABLE HOUSING (units at or below 40% AMI)
• Benchmark #3 Missing Middle & Unique Housing Types. Projects are either a missing middle
housing type (i.e. townhomes, courtyard apartments, small scale apartments) or a housing type that
is not commonly built: tiny homes, modular homes, pre-fab homes, accessory dwelling units
(ADUs).
o MISSING MIDDLE HOUSING
4
3. FY23 Housing Activities – To encourage the incorporation of the four proposed Funding Priorities
in RDA-funded housing projects, RDA staff proposes allocating funding to the following programs
and tactics as part of the RDA’s FY23 budget. Some of the housing activities may achieve multiple
Funding Priorities.
HOUSING PRIORITY HOUSING ACTIVITIES
1. AFFORDABLE
HOME OWNERSHIP
Shared Equity Model A shared equity housing model such as a
community land trust provides the opportunity to hold title to land to
preserve its long-term availability for affordable housing. This model
allows for both home ownership and shared equity. As part of the Westside
Community Initiative (WCI), the RDA will explore some form of a shared
equity program or partnership to facilitate affordable ownership.
Land Acquisition The RDA will seek opportunities to acquire land to
accommodate ownership products. Land could potentially be contributed to
a community land trust or marketed by an RFP to partner on
homeownership projects or other housing priorities.
2. FAMILY HOUSING
Shared Equity Model This model will also be utilized to facilitate family
housing with 3+ bedrooms in particular. Family housing is likely to take
the form of missing-middle type housing or condominiums.
Land Acquisition Similar to homeownership, land acquisition can be used
to facilitate family-sized units through a targeted RFP.
Housing Development Loan Program (gap financing)* Although not the
most direct tool to encourage family-sized units, these units will be
prioritized by weighting their importance as a “3” or top priority. Staff also
suggests updating the benchmark to meet this priority by requiring 20%
family-sized units of total units – up from 10%. Finally, the Board could
consider requiring family-sized units as a threshold to qualify for the
competitive NOFA.
3. DEEPLY
AFFORDABLE
HOUSING
Housing Development Loan Program (gap financing)*These units will
be prioritized by weighting their importance as a “3” or top priority. Staff
also suggests updating the benchmark to meet this priority by requiring at
least 20% of the units are set aside for special populations [i.e. for
populations making 40% AMI or below] of total units – up from 10%.
Finally, the Board could consider requiring deeply affordable units as a
threshold to qualify for the competitive NOFA.
4. MISSING MIDDLE
HOUSING
Land Acquisition Similar to homeownership, land acquisition can be used
to facilitate missing middle housing such as small-scale apartment
buildings and townhomes through a targeted RFP.
5
Accessory Dwelling Unit (ADUs) Assistance ADU assistance was
proposed as a strategy within the FY22 budget and should be carried over
to FY23. ADUs are considered as a type of missing middle housing /unique
housing type as they can be added to a lot without changing the character of
a neighborhood. These units accommodate different walks of life from
young professionals to retirees looking to age in place. The RDA will work
to establish some form of an ADU program or partnership to facilitate the
construction of ADUs on the City’s westside or citywide. Staff
recommends allocating more funding to this program in addition to the
$250,000 allocated is last year’s budget, especially as the average ADU
costs $140,000 (including utilities) + $8,000 in permit fees.
* Housing Development Loan Program (“HDLP”) – In its essence, the HDLP is a gap financing tool for affordable
housing projects. This financing can be marketed for specific project types (i.e. family housing NOFA); however, this year
staff is proposing to allocate funding to the following activities:
• Competitive Affordable Housing NOFA (see Priorities Ranking under Attachment A)
• Open-Ended Affordable Housing NOFA
• High Opportunity Affordable Housing NOFA
Figure 2:
6
NEXT STEPS:
• As a part of the budget presentation, RDA staff will present the proposed FY23 Funding Strategy
including the projected amount of revenue to be allocated to each of the four housing funds; the
Funding Priorities; and the funding allocations for each housing activity.
• The Board shall consider the Funding Strategy as part of the annual budget adoption process.
• Pursuant to the Housing Development Loan Program Policy, the Board must also approve the
proposed Funding Priorities via a separate resolution.
ATTACHMENTS:
• Attachment A – Competitive Affordable Housing NOFA – Priorities Ranking
7
Attachment A - Competitive Affordable Housing NOFA –
Priorities Ranking
CATEGORY
POLICY OBJECTIVE
NOFA
RANKING
WEIGHT
0.5%
INTEREST
RATE
REDUCTION
1 Homeownership Create opportunities for those who have historically rented
in the community to build wealth and establish permanent
roots through homeownership.
3
X
2 Family Housing Provide opportunities for families to enjoy the many
benefits of urban living by encouraging the development of
housing that is more conducive to larger household sizes.
3
(Potential
Threshold)
X
3 Target
Populations
Expand the availability of units for extremely low-income
households and special populations, thereby providing
housing options for individuals or families that are homeless
or at risk of homelessness.
3
(Potential
Threshold)
X
4 Missing Middle &
Unique
Housing
Types
Promote an array of scale of project types to diversify the
City’s housing stock/forms and provide more affordable
living options for residents.
3 X
5 Sustainability Achieve green building and energy conservation
standards to lower housing expenses, conserve resources,
and promote resiliency.
1 X
6 Transportation
Opportunities
Promote a multimodal transportation network and ensure
convenient and equitable access to a variety of
transportation options.
1 X
7 Neighborhood
Safety
Utilize the development of housing as a method to remove
blight, reduce crime, revitalize neighborhoods, and stabilize
communities.
1 X
8 Expand
Opportunity
Provide for Neighborhoods of Opportunity by promoting
the economic diversity of the housing stock within
neighborhoods.
1 X
9 Neighborhood
Impact
Encourage housing that is high-quality, enduring, and that
contributes to neighborhood context and livability through
architectural and urban design best practices.
1 X
10 Commercial
Vitality
Foster a mix of land uses and unique neighborhood business
districts that adequately meet the local community’s needs.
1 X
11 Historic
Preservation
/Adaptive Reuse
Encourage the preservation and/or reuse of buildings to
preserve the character of neighborhoods.
1 X
12 Public Art Promote cultural expression and add to the experience and
value of the built environment through art that is publicly
visible or accessible for all to experience.
1 X