Council Provided Information - 1/10/2023CITY COUNCIL OF SALT LAKE CITY
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BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM:Allison Rowland
Budget & Policy Analyst
DATE:January 10, 2023
RE: RESOLUTION: HOUSING DEVELOPMENT LOAN FUNDING ALLOCATIONS
FOR AFFORDABLE HOUSING
Corrections and clarifications were made to this document after it was first published.
They are marked in this color below.
ISSUE-AT-A-GLANCE
The Board will review and potentially approve recommendations for allocating up to $8.36 million in affordable
housing funds offered through a Notice of Funding Availability (NOFA) in 2022. The purpose of these low-
interest, 40-year loans is to incentivize the inclusion of affordable housing in new construction and in
preservation projects. The ten applications forwarded to the Board have requested a total of nearly $16.8 million
(an eleventh application was withdrawn).
The applications were reviewed and ranked by the RDA’s Finance Committee. Their specific recommendations
for allocating $6.0 million of funds approved by the Board in 2022 (as part of the fiscal year 2023 budget) are
presented in the Transmittal’s Attachment C, along with recommendations for an additional $2.36 million
which became available when a project approved in 2021 was withdrawn. The Board makes the final
determination of which applications to fund and for what amount.
This competitive NOFA was administered under the RDA’s Housing Development Loan Program (HDLP) and
based on the Board’s April 2022 directive to require that proposals meet new “threshold criteria” for eligibility.
These include minimum environmental standards, and that 10% of total housing units in each project are either
deeply affordable, or family-sized—or both. (Additional information can be found in Section A below.) In the
same April meeting, the Board also approved weighting four 2022 Housing Priorities for the HDLP more highly
than the others—deeply affordable housing; family housing; affordable homeownership; and “missing middle”
housing—to encourage development that meets other key goals (see Section B).
Item Schedule:
Briefing: January 10, 2023
Set Date: N/A
Public Hearing: N/A
Potential Action: January 10, 2023
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The RDA has released multiple NOFAs since late 2016 to facilitate the development of affordable housing units
in Salt Lake City. This follows previous direction from the Council to concentrate housing development activities
in the RDA and housing program activities in the Housing Stability Division of Community and Neighborhoods
(CAN).
Goal of the briefing: Discuss and consider adopting the Resolution entitled 2022 Affordable Housing –
Housing Development Loan Program (HDLP) Funding Allocations.
ADDITIONAL INFORMATION
A. 2022 Threshold Criteria.
1.Environmental Criteria. In keeping with the 2021 RDA Sustainable Development Policy,
two measures of environmental impact now function essentially as threshold criteria. These are
that the completed building(s) 1. must receive an “Energy Star” score above 90, and 2. will not
install natural gas to power appliances, relying instead on electricity for this purpose. These
requirements apply to all proposed projects.
In April 2022, the Board adopted two new “threshold criteria” for the HDLP, which require that every
application must meet either of the two following requirements, or both:
2.Deeply Affordable Units. At least 10% of total units in a proposed project must be deeply
affordable, accessible for individuals or families that are homeless or at risk of homelessness.
These units will be rent and income deed-restricted to households earning 40% or less AMI.
3.“Family-Sized” Units. At least 10% of total units in a proposed project have three or more
bedrooms. These units will be rent and income deed-restricted to households earning 60% or
less AMI.
B. 2022 Funding Priorities. In addition to the Threshold Criteria, in April the Board set additional annual
Funding Priorities for 2022 (see Transmittal, Attachment E). The funding priorities are part of a point
system that is used in the evaluation process to encourage development that meets its additional Board
goals. A project with a higher point total is typically more highly ranked than one with a lower total.
1. Approved FY23 Priorities.
a. Priorities worth three points:
•Family Housing
•Target Populations
•Homeownership
•Missing Middle and Unique Housing Types
b. Priorities worth one point:
•Transportation Opportunities
•Neighborhood Safety
•Expand Opportunity
•Architecture and Urban Design
•Commercial Vitality
•Historic Preservation /Adaptive Re-use
•Public Art
•Sustainability
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2.Interest-Rate Reductions. In addition to increasing their point total, applicants also can
receive interest-rate reductions on their HDLP loans, depending on the number of Board
priorities their project would meet. See also Policy Question #2 below. For each funding
priority included, a project is eligible to receive a 0.5% reduction to the Base Interest Rate,
down to a minimum of 1% for hard repayment loans that meet four or more priority incentives,
and 2% for cashflow repayment.
C. Applications for Projects in High Opportunity Areas. For the 2022 NOFA, none of the applications
proposed projects located within “high opportunity areas,” a designation for census tracts where residents
have relatively greater chances at upward mobility. In 2017, the Board first reserved $4.5 million for
projects located in such areas. Two years later, the Board approved a $1.8 million loan for the Richmond
Flats development, leaving the current balance at $2.7 million.
➢The Board may wish to consider the costs and benefits of continuing to reserve
affordable housing funds for projects in areas of high opportunity, or whether to
reserve additional funds for this purpose.
➢The map used by RDA staff to determine whether a proposed project is eligible for the loan funds
reserved for high opportunity areas was part of research published in 2015, and the underlying data
for the map dates from still earlier. Given the City’s rapid socioeconomic changes in the past decade,
the Board may wish to request that the Administration work with the Gardner
Policy Institute to update the map of high opportunity areas, at least to the extent new
data is available in time for the next NOFA process.
D. Evaluation Process.
1.Application Dates. The NOFA was released on September 6, 2022, and originally was closed
on October 24, 2022. The application process was then re-opened from October 31 to November
14, after RDA staff clarified the Sustainable Development Policy to ensure applicants had time
to apply the relevant requirements to their applications. The 2022 HDLP Annual Affordable
Housing Funds Guidelines and Application Handbook can be found here.
2.Project Evaluation. As part of the application review process, RDA staff first analyzed
applications to ensure they met the HDLP’s eligibility requirements. The RDA Finance
Committee (see below) then considered the Board’s funding priorities, along with factors
related to the feasibility and technical qualities of each application. These include developer
experience, the completeness and quality of the application, the amount of requested funding
per affordable unit, the unit mix, community impact, and the financial and regulatory readiness
of the proposed project.
➢The Board may wish to request information about how the RDA Finance
Committee balanced the Board’s annual priorities with the feasibility and
technical qualities of each application, particularly developer experience
and community impact.
3.RDA Finance Committee. The RDA Finance Committee includes three members of the RDA
Advisory Committee (RAC), and City staff in the RDA, the Department of Economic
Development, and the Community and Neighborhoods Department (CAN), including the
director of the Division of Housing Stability.
E. Background. The framework for allocating Housing Development Loan Program (HDLP) funds was
adopted over several stages beginning in 2020. Since then, the RDA Board discussed and adopted the
following:
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1.Housing Funds Allocation Policy. This policy establishes four housing funds based on fund
source. The revenues, expenditures, interest, and payments for each fund source are separately
accounted for to ensure the control and oversight required by statute.
2.Housing Development Loan Program (HDLP) Policy. The purpose of the HDLP is to
incentivize the development and preservation of affordable housing in Salt Lake City through
low-cost financial assistance. The HDLP provides a centralized application, underwriting, and
approval process regardless of the fund source.
3.Setting Annual Affordable Housing Priorities. Under the recently adopted process, in
the spring of each year, the Board adopts annual priorities to provide policy direction for RDA
staff for reviewing applications to City affordable housing development support made available
through a NOFA. The goal of adopting priorities on an annual basis is to direct resources to
specific policy priorities depending on available resources, community need, and policy
objectives.
POLICY QUESTIONS
1.Does the Board agree with the strategy presented in the funding recommendations for
using the potential additional $2.36 million from the 2021 project that was withdrawn?
Alternatively, the Council may wish to consider:
a. concentrating this amount in one or two key projects, rather than splitting it among
several; or,
b. using some or all of this amount for “emergency gap funds” available to affordable
housing projects currently under construction that encounter funding shortfalls due to
current economic and market conditions. (The Board also may wish to ask whether any
HDLP funds are set aside for this purpose for FY23.)
c. Re-allocating these funds to different affordable housing programs, like Strategic
Acquisition, or to completely different uses.
2. The projects reviewed by the RDA Finance Committee would be charged interest rates that range from 1% to
2.5% on 40-year loans. In the context of sharply rising interest rates in the broader economy,
would the Board like to discuss the potential advantages and disadvantages of changing
how the Base Interest Rate is set for HDLP loans?
RDA BOARD MEETING –JANUARY 10, 2023
AFFORDABLE HOUSING
2022 NOTICE OF FUNDING AVAILABILITY (NOFA)
FUNDS AVAILABLE
•Total: $6 million*
*Funds from a previous HDLP application may be available to
include as an additional funding source. The Board will need to
approve this addition, if desired. This may provide an additional
$2.36 million of funding.
APPLICATION PROCESS
•Competitive Application Process
•Applications Released: September 6, 2022
•Information Session: September 16, 2022
•Applications Due: November 14, 2022
APPLICATION SUMMARY
•11 applications
•1 application rescinded, now a total of 10 applications
•$16,760,000 total funding request
BACKGROUND & OVERVIEW
THRESHOLDS REQUIREMENTS
SUSTAINABILITY:Projects required to be designed to achieve a “Designed
to Earn the Energy Star” Score of 90 or higher, contain no onsite fossil fuel
combustion, and participate in the City’s Elevate Buildings program once the
building is operating.
AND ONE OF THE FOLLOWING:
FAMILY -SIZED UNITS: At least 10% of the total residential units shall have
3+ bedrooms and shall be rent restricted to those earning 60% AMI.
asd
OR
asd
DEEPLY AFFORDABLE UNITS: At least 10% of the total residential units
shall be restricted as affordable to households earning 40% AMI.
PROJECT SUMMARY
•In 2019, a $3.1 M RDA loan was approved to support the adaptive reuse
of two existing warehouses by West End LLC
•Construction was completed in Fall 2021
•Created 10,900 SF of rentable commercial
•The pandemic slowed construction and leasing the building
CATEGORY POLICY OBJECTIVE
NOFA
RANKING
WEIGHT
0.5% INTEREST
RATE REDUCTION
1. 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 X
2. 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 X
3. Homeownership Create opportunities for those who have historically rented in the community to build wealth and establish permanent
roots through homeownership.3 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 to reduce the number of vacant and distressed buildings and lots to reduce crime
and return land to a productive use.1 X
8. Expand Opportunity Provide for Neighborhoods of Opportunity by promoting the economic diversity of the housing stock within
neighborhoods.1 X
9.Architecture & Urban
Design
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
PROJECT PRIORITIES
*Note: Sustainability Interest Rate Reduction: As per the RDA’s Sustainable Development Policy, projects built to an Off-Site Net Zero standard are eligible for a 1% interest rate
reduction and projects built to an On-Site Net Zero standard are eligible for a 2% interest rate reduction.
MAP OF DEVELOPMENT: MAP 1 of 2
MAP OF DEVELOPMENT: MAP 2 of 2
APPLICATION CONSIDERATIONS:
•Funding Priorities
•Project Readiness
•Content & Quality of Application
•Qualifications & Experience of Development Team
•Content, Effectiveness & Financial Details Appropriateness
•Building & Site Design
APPLICATION REVIEW
APPLICATIONS RECOMMENDED FOR FUNDING:
•Meet threshold requirements
•Have secured financing & tax credits
•Readiness to build
•Project priorities met
APPLICATION OVERVIEW
Projects
2 -Victory
Heights 1
BCG Holdings
3 -Victory
Heights 2
BCG Holdings
4 -Atkinson
Stacks
HAME
5 -Book Cliffs
Lodge
HAME
6 -Citizens
West 2
Giv Development
7 -Citizens
West 3
Giv Development
8 -Ville 9
Ville Property
Mgmt
9 -Ville 1659
Ville Property
Mgmt
10 -Liberty
Corner
Cowboy Partners
11 -9Ten West
Great Lakes
Capital
TOTAL
Address 1060 E 100 S 1060 E 100 S 543 S 500 W
1159 S West
Temple 509 W 300 N 509 W 300 N 1025 N 900 W
1659 W North
Temple 265 W 1300 S
910 W North
Temple
Preliminary Terms 40/40, 1% 40/40, 1%40/40, 1%40/40, 1%40/40, 1%40/40, 1%40/40, 2.5%40/40, 2%40/40, 2%16/30, 2%
Repayment Type Hard Hard Hard Hard Hard Hard Cash Flow Cash Flow Cash Flow Cash Flow
RDA Request Amount $1,865,000 $280,000 $2,500,000 $540,000 $1,850,000 $1,200,000 $1,700,000 $1,825,000 $3,000,000 $2,000,000 $16,760,000
Funding Recommendations $1,865,000 $280,000 $500,000 $540,000 $1,850,000 $1,200,000 -$1,000,000 $1,125,000 -$8,360,000
Previous RDA Commitment ---$1,000,000 ------
Project Cost $18,897,926 $14,731,682 $29,805,966 $15,446,701 $23,083,403 $12,926,250 $17,156,729 $18,250,000 $99,718,091 $29,221,096 $279,237,844
RDA % of Total Project Cost 9.9%1.9%8.4%10.0%8.0%9.3%9.9%10.0%3.0%6.8%
RDA Requested Funds per
Affordable Unit $46,625 $7,368 $21,930 $28,000 $37,000 $40,000 $26,154 $9,264 $15,000 $11,429
RDA FC Recommended
Funding per Affordable Unit $37,300 $7,368 $4,386 $28,000 $37,000 $40,000 -$5,076 $5,625 -
Tax Credits?Yes, 9%Yes, 4%Applying 2023 Applying 2023 Yes, 9%Yes, 9%Yes, 4%No Applying 2023 Applying 2023
Affordable Units Breakdown
40% AMI and below 10 8 114 38 10 6 7 197 55 18 349
41-60% AMI 30 30 -9 40 24 58 -145 157 503
>61% AMI to (Market)---8 -----8
Total 40 38 114 55 50 30 65 197 200 175 964
Percent affordable (60% AMI
and below)100%100%100%85%100%100%100%100%100%100%
Unit Mix
Studios 30 26 114 -24 21 35 197 -160 607
1BR ---45 --30 --15 90
2BR --------97 -97
3BR 10 8 -10 19 6 --80 -133
4BR -4 --7 3 --23 -37
Project Priorities Ranking Wt.10 10 8 8 10 10 5 9 13 5
FINANCE COMMITTEE RECOMMENDATION
FUNDING RECOMMENDATIONS
PROJECT/
APPLICANT ADDRESS
NOFA
RANKING
WEIGHT
FUNDING
REQUEST
HDLP
COMMITTED
FUNDS: $6M
POSSIBLE
ADDITIONAL
HDLP FUNDS:
$2.36M
TOTAL FUNDING
RECOMMENDATION
FUNDING
RANKING
2 Victory Heights 1
BCG Holdings 1060 E 100 S 10 $1,865,000 $1,865,000 $1,865,000 1
3 Victory Heights 2
BCG Holdings 1060 E 100 S 10 $280,000 $280,000 $280,000 2
4 Atkinson Stacks
HAME 543 S 500 W 8 $2,500,000 $500,000 $500,000 8
5 Book Cliffs Lodge
HAME 1159 S West
Temple 8 $540,000 $540,000 $540,000 7
6 Citizens West 2
Giv Development 509 W 300 N 10 $1,850,000 $1,850,000 $1,850,000 3
7 Citizens West 3
Giv Development 509 W 300 N 10 $1,200,000 $1,200,000 $1,200,000 4
8 Ville 9
Ville Property Mgmt 1025 N 900 W 5 $1,700,000 $0 9/10
9 Ville 1659
Ville Property Mgmt 1659 W North
Temple 9 $1,825,000 $805,000 $195,000 $1,000,000 5
10 Liberty Corner
Cowboy Partners 265 W 1300 S 13 $3,000,000 $1,125,000 $1,125,000 6
11 9Ten West
Great Lakes Capital 910 W North
Temple 5 $2,000,000 $0 9/10
TOTAL $16,760,000 $6,000,000 $2,360,000 $8,360,000
TOTAL UNITS:
•724 of 964 units would be funded
RECOMMENDED CONDITION:
•If these projects do not receive 9%
tax credits in the next Utah Housing
Corporation allocation cycle, these
funding commitments shall be
returned to the RDA's Housing
Development Loan Program (HDLP).
RDA BOARD CONSIDERATIONS:
•Consider approving additional $2.36M
•Finance Committee Recommendation:
•Funding of projects
•If 9% tax credits are not received in
next cycle, funding commitments
shall be returned to the HDLP.
•Approvals provide a 24-month
conditional commitment period
•Staff will ensure final terms align with
requirements in HDLP.
•Changes to repayment type (hard
or cash flow) may occur and shall
be based on the HDLP and senior
lender requirements. Change in
repayment type will cause a
change in interest rate.
CONSIDERATIONS
FUNDING RECOMMENDATIONS
PROJECT/
APPLICANT ADDRESS
FINANCE
COMMITTEE
RANKING
FUNDING
REQUEST
HDLP
COMMITTED
FUNDS: $6M
POSSIBLE
ADDITIONAL
HDLP FUNDS:
$2.36M
TOTAL FUNDING
RECOMMENDATION
2 Victory Heights 1
BCG Holdings 1060 E 100 S 1 $1,865,000 $1,865,000 $1,865,000
3 Victory Heights 2
BCG Holdings 1060 E 100 S 2 $280,000 $280,000 $280,000
4 Atkinson Stacks
HAME 543 S 500 W 8 $2,500,000 $500,000 $500,000
5 Book Cliffs Lodge
HAME 1159 S West
Temple 7 $540,000 $540,000 $540,000
6 Citizens West 2
Giv Development 509 W 300 N 3 $1,850,000 $1,850,000 $1,850,000
7 Citizens West 3
Giv Development 509 W 300 N 4 $1,200,000 $1,200,000 $1,200,000
8 Ville 9
Ville Property
Mgmt
1025 N 900 W 9/10 $1,700,000 $0
9 Ville 1659
Ville Property
Mgmt
1659 W North
Temple 5 $1,825,000 $805,000 $195,000 $1,000,000
10 Liberty Corner
Cowboy Partners 265 W 1300 S 6 $3,000,000 $1,125,000 $1,125,000
11 9Ten West
Great Lakes
Capital
910 W North
Temple 9/10 $2,000,000 $0
TOTAL $16,760,000 $6,000,000 $2,360,000 $8,360,000