HomeMy WebLinkAboutAgenda - 09-19-2017 - 6-a - Review of Affordable Housing Bond Scoring Criteria 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 19, 2017
Action Agenda
Item No. 6-a
SUBJECT: Review of Affordable Housing Bond Scoring Criteria
DEPARTMENT: County Manager's Office and
Department of Housing, Human
Rights, and Community
Development
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1: Scoring Criteria Travis Myren, 919-245-2300
Attachment 2: Summary of Scores by Sherrill Hampton, 919-245-2492
Project
Attachment 3: 2016 Affordable Housing
Bond Funds RFP #5228
Project Selection Narrative
PURPOSE: To review and consider revisions to the scoring criteria used to evaluate affordable
housing bond funding proposals.
BACKGROUND: On June 6, 2017 the Board of County Commissioners awarded $2.5 million in
affordable housing bond funds to projects that had submitted proposals through a request for
proposal process. The County received six proposals from affordable housing providers. One
of the proposals was incomplete, so five of the six proposals were scored using standard
scoring criteria (Attachment 1).
Based on the scoring criteria and available funds, four of the five remaining projects were
recommended for funding. One of the projects submitted by EmPOWERment (606 Bynum
Street) was not recommended for funding. The Board of Commissioners funded this project
using other affordable housing funds appropriated in the Capital Investment Plan.
During the discussion of the bond awards, the Board requested an analysis of the scoring
criteria to determine why some projects scored higher than others. The following describes how
the projects scored under each category as well as feedback from the Affordable Housing
Coalition. A summary of scores by project is attached (Attachment 2) as well as a selection
narrative (Attachment 3). Each project was scored using eight categories as described below.
1. Income Targeting and Special Needs
The income targeting and special needs category awarded more points to projects that
served lower income households. Up to twenty-five points were available to projects
serving households with incomes under thirty percent (30%) of the area median income.
All of the projects scored well for serving low income households. However, this category
2
also awarded an additional twenty (20) points to projects serving at least one special
needs population. Both of the projects submitted by CASA as well as the project
submitted by Habitat for Humanity earned the additional points for serving at least one
special needs population. The EmPOWERment projects did not receive those additional
special needs points.
Affordable Housing Coalition members requested a clear definition of the special needs
populations that would qualify for the additional points and a way to prorate the special
needs scores based on the number of units dedicated to serving a special needs
population.
2. Local Residency
The Local Residency category was intended to award points based on whether the
project would serve County residents. The Request for Proposal was not prescriptive on
how achieving that goal should be reported. As a result, the responses varied too widely
to score them consistently. This criterion will be better defined in the next scoring
process to correct this issue.
Affordable Housing Coalition members also requested more clarity on residency
qualifications in its review of the criteria.
3. Leveraging
The Leveraging category awarded points based on the degree to which non-County
funds were used to fund the project. The project submitted by Habitat for Humanity
leveraged sixty four percent (64%) of non-County funding. The two projects submitted by
CASA leveraged between sixty five percent (65%) and sixty seven percent (67%) of non-
County funding. The projects submitted by EmPOWERment did not apply any non-
County funds.
This category also evaluated the project's ability to pay property taxes. The scoring team
noted that this criterion rewards projects that would be privately owned rather than owned
and operated by a non-profit. This incentive seems inconsistent with the need to
increase the supply of affordable rental housing that is often owned by a non-profit entity
and exempt from property taxes.
Affordable Housing Coalition members also questioned awarding points for the
repayment of bond funds noting that serving lower income households requires
significant subsidy and does not allow for financial margins that would support bond
repayment. This criterion may be appropriate if a private developer were building a
mixed income project that generated enough income to repay some of the public
investment.
4. Building Design
The Building Design category awards points for energy efficiency, accessibility, proximity
to public transportation, and high quality water and sewer services. The new construction
projects submitted by CASA and Habitat were able to score well in energy efficiency and
accessibility. The EmPOWERment projects did not score as well because
EmPOWERment proposed purchasing existing homes that would require extensive
retrofitting to compete with new construction.
3
5. Community Design
The projects scored comparably in this category, but it does slightly favor new
construction projects in that it award points to adding to a mix of housing within an
existing neighborhood.
6. Community Sponsorship/Support
The projects scored comparably in this category.
7. Project Feasibility
The project feasibility category favors projects where funding, other than bond funding, is
in place at the time of application. Since the EmPOWERment projects did not leverage
outside funding, they did not score as well as others in this category.
8. Developer Experience
The projects scored comparably in this category. All of the projects were sponsored by
affordable housing providers with extensive experience serving the Orange County
community.
FINANCIAL IMPACT: No direct financial impact is associated with reviewing the affordable
housing bond scoring criteria.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this agenda item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or
ethnic background; age; military service; disability; and familial, residential or economic
status.
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
RECOMMENDATION(S): The Manager recommends the Board consider the following changes
to the affordable housing bond scoring criteria:
1. Due to the inherent differences between new construction and the acquisition and
preservation of existing housing, score and recommend new construction projects
separately so that they do not compete with the acquisition of existing housing stock.
2. Define special needs populations as seniors, people with disabilities, veterans,
individuals or families experiencing homelessness, and victims of domestic violence.
The special needs score will be prorated based on the number of units dedicated to
serving residents with special needs.
4
3. Define residency as households currently residing or working in Orange County.
Clarify reporting to include marketing and recruitment efforts to Orange County
residents and reporting requirements once the project is completed.
4. Eliminate the ability to pay property taxes as a scoring criterion since most affordable
rental property is owned by a non-profit and exempt from property tax.
5. Eliminate the ability to repay bond funds as a scoring criterion since the focus of bond
funds should be to serve lower income households.
Attachment 1 5
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NOR Hi CA ROI I NA
County Funds to Help the County Reach a Countywide Shared Goal of up to 1,000
Affordable Housing Units in Five Years: 2016— 2020
AFFORDABLE HOUSING PROGRAM EVALUATION: SCORING CRITERIA
A. Income Targeting and Special Needs(45 points)
Household Income Range1 Points to be Awarded
O to <30% 25
>30%to< 60% of Area Median Income 15
>60%to< 80%of Area Median Income 10
Special Needs Populations 20
B. Local Residency(5 points)
Percent of Orange County residents served at time of occupancy Points to be Awarded
80%to 100% 5
50%to 80% 2
0 to 50% 1
C. Leveraging(55 points)
Percent Funded by Bonds and Other County Funding Points to be Awarded
60—80% 3
40—59% 6
20—39% 9
10—19% 15
<10% 20
Other Criteria Points to be Awarded
1. The project pays property taxes 2
2a.The project repays the bond funds—principal only. 3
2b.The project repays the bond funds— both principal and interest. 10
3.The Project is a Mixed Income Project:The project serves more than 10
one income category and minimizes the concentration of affordable
housing projects in a particular geographic area.
4.The Project is a Mixed Use Project:The project includes uses in 10
addition to residential uses that offer access to employment
opportunities, daily needs and health and human services.
1 Area Median Income=$73,300 for a family of four.
30%AMI =$22,000
60%AMI =$43,980
80%AMI =$58,650
6
D. Building Design (25 points)
Scoring Criteria Maximum Points to Be Awarded
1.The project meets or exceeds the NC Housing Finance Agency Energy 3
Efficiency Criteria.
2.The project is accessible to needed services for the target population 4
such as healthcare, schools, and or grocery shopping.
3.The project provides for handicap accessibility and/or utilizes the 5
principles of Universal Design in the building design.
4.Additional points may be awarded for meeting aspects associated 2
with functionality, maintenance and dispersal.
5.The project is connected to water and sewer service or will connect to 6
existing service or will use a community well and sewer system
consistent with water and sewer boundary agreements and local
standards.
6. Public transportation and related facilities and improvements are 5
available where applicable, e.g., bus shelter, accessible stops, etc.
E. Community Design (10 points)
Scoring Criteria Maximum Points to be Awarded
7.The project contributes to a mix of housing within an existing 3
neighborhood.
8. Additional points may be awarded for criteria associated with building 3
appearance, quality of construction, compatibility with surrounding
housing, ability to foster a sense of a secure community, and contributes to
neighborhood revitalization and or affordable housing preservation.
(Details must be provided by applicant)
9. Environmental impacts are identified with plans included to adequately 4
address minimizing impact on environment, e.g. reuse of building materials
recycling, storm water management and water conservation.
F. Community Sponsorship/Support (20 points)
Scoring Criteria Maximum Points to be Awarded
1. The applicant can submit explicit evidence that they coordinated the 6
application with other organizations to complement and/or support the
proposed project.
2.The applicant involved the intended beneficiaries of the project in the 6
planning process and describes outreach and marketing plan to be inclusive.
3.The applicant can demonstrate that it has been actively involved, or 4
describes the steps it will take to become actively involved in the
Community's Consolidated Planning process to identify and address a
housing need or problem that is related in whole or part to the proposed
project.
4.The applicant has developed, or describes plans to develop linkages with 4
other community activities so solutions are holistic and comprehensive.
2
7
G. Project Feasibility(30 points)
Scoring Criteria Maximum Points to be Awarded
1.The applicant can demonstrate site control, zoning, compliance, and a 10
timely construction schedule that is feasible.
2. Funding (other than bond or other County funding) is in place at the 10
time of application.
3.The applicant's proposal is complete and presents a proposed project 10
budget and financial model that is sustainable and based on reasonable
assumptions.
H. Developer Experience(25 points)
Scoring Criteria Maximum Points to be Awarded
1. Experience of the applicant in carrying out projects of comparable 10
scope and nature (e.g., new construction, rental housing, rehabilitation,
etc.)to that proposed, and has met regulatory compliance for prior
projects.
2.Applicant has proposed a team with demonstrated development, 5
managerial and financial management capabilities in prior projects.
3.Applicant has successful record of meeting proposed budgets and 10
timetables.
TOTAL POTENTIAL POINTS: 215
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Attachment 3 9
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NOR:R:H „A ROI NA
2016 Affordable Housing Bond Funds# RFP 5228
Project Selection Narrative
1. Habitat for Humanity 154.18
Project: Habitat for Humanity of Orange County-Hillsborough
Total Cost of Project: $2,568,500
Request: $925,000
Recommended: $915,334
Percent of Project Cost Requested: 36%
Cost of Housing: $100,000 to $120,000 depending on square footage
Infrastructure development costs for twenty-four townhomes for seniors 55 and older who earn
between 30% and 80% of AMI. Twelve (12) of the units will be marketed to persons between
31% and 50% of AMI, eight (8) units for persons with incomes between 51% and 60%, and the
remaining four (4) units to persons between 60% and 80% of AMI. All the units are one floor,
fully accessible, in four separate buildings. The units are a combinations of six (6) studios, six (6)
one bedroom, and twelve (12) one bedroom with niche (to allow for overnight guests). The
Town of Hillsborough has already awarded Habitat $125,000 for infrastructure construction.
Habitat will also receive $5,000 per unit from the original Waterstone developer at the time
each building permit is issued. County Bond funds will be structured as a zero-interest
construction loan to Habitat. When the homes are sold, the loan will be converted to zero-
interest deferred payment second mortgages for the buyer. Habitat has submitted an
application to modify the original special use permit, the property will be donated to Habitat by
the developer, infrastructure to be completed by September 2018, and completion of all homes
by December 2019.
2. CASA 147.93
Project: Merritt Mill West- Carrboro
Total Cost of Project: $2,213,450
Request: $746,500
Recommended: $736,833
Percent of Project Cost Requested: 33%
Construction cost for sixteen (16) rental apartments for households with incomes under 50% of
AMI; with a priority for persons who are homeless and or disabled. A portion of the sixteen
units will be specifically reserved for veterans. Approximately twelve (12) apartments will house
persons with incomes under 30% of AMI and the remaining units will house persons with
incomes under 50% of AMI. The preliminary site plan includes 2 18-unit buildings of 1 bedroom,
2 bath apartments with parking. The plan also allows for construction of a 20-unit building at a
later second phase of construction. The Town of Carrboro has already awarded CASA $357,208
for the land costs. CASA has already begun the conditional use permit process and expects to
have it in early 2018 with completion of construction in 2019.
10
3. CASA 146.95
Project: Merritt Mill East- Chapel Hill
Total Cost of Project: $1,808,025
Request: $646,200
Recommended: $636,533
Percent of Project Cost Requested: 35%
Construction cost for twelve (12) rental apartments for households with incomes under 50% of
AMI; with a priority for persons who are homeless and or disabled. Approximately eight (8)
apartments will house persons with incomes under 30% of AMI and the remaining units will
house persons with incomes under 50% of AMI. The preliminary site plan includes 2 12-unit
buildings of 2 bedroom, 2 bath apartments with parking. The plan also allows for construction
of a 12-unit building at a later second phase of construction. The Town of Chapel Hill has
already awarded CASA $330,810 for the land costs and sewer extension. CASA applied for a
special use permit in January, the property is under contract, they expect to begin construction
2018 and be ready for occupancy in 2019.
4. EmPOWERment 94.57
Project: 116 Cole Street, Chapel Hill
Total Cost of Project: $211,300
Request: $211,300
Recommended: $211,300
Percent of Project Cost Requested: 100%
Acquisition of a three bedroom, one bath single family home for a family between 30% and 50%
of AMI. The house was renovated five ago and does not require extensive renovations.
EmPOWERment will make any necessary updates and improvements to the house.
5. EmPOWERment 89.71
Project: 606 Bynum Street, Chapel Hill
Total Cost of Project: $264,400
Request: $264,400
Recommended: $0
Percent of Project Cost Requested: 100%
Acquisition of 2 separate houses: a three bedroom, one bath single family home and a two
bedroom, 1 bath single family home. Both of these houses are for families between 30% and
50% of AMI. The houses are both fully renovated and ready for occupancy.
6. Center for Homeownership & EDC, Inc. Application Incomplete
Project:
Total Cost of Project:
Request:
Recommended:
Percent of Project Cost Requested:
2