Multi-Family Housing Limited Tax Exemption Program Applications City Center Redevelopment Authority...

Multi-Family Housing Limited Tax Exemption Program Applications City Center Redevelopment Authority

December 17, 2015

Peggy Sheehan, Program Manager

• Rental Market Update• Overview of Proposed Projects• Financial Analysis• Applicant Comments/Questions• Discussion/Next Steps

Presentation Overview

CCRA Multi-Family Tax Exemption Program Application Review - 2

Rental Market Update-Norris Beggs Simpson Report


$1,184

4.80%

1.87%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

2007:Q3

2008:Q3

2009:Q3

2010:Q3

2011:Q3

2012:Q3

2013:Q3

2014:Q3

2015:Q3

Vac

ancy

Rat

e

Mo

nth

ly R

ent

Source: NAI Norris, Beggs & Simpson Realtors

Vancouver Multi-Family Rental & Vacancy Rates: 3Q 2007 - 3Q 2015 for Two Bedroom/Two Bath Unit

2 BR/2 BA RentVacancy Rate

Rental Market Update- University of Washington Runstad Center


$1.09

5.10%

7.70%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15

Vac

ancy

Rat

e

Mo

nth

ly R

ent

per

Sq

uar

e F

oo

t

Source: Washington Center for Real Estate ResearchNote: Sep-15 data appears to reflect a large number of new (and vacant) units

Clark County Apartment Rental & Vacancy Rates: Sep. 2007 - Sep. 2015 Rent for Two Bedroom/One Bath Unit

Rent/Sq. Ft.

Vacancy Rate

Rental Market Update- University of Washington Runstad Center


The September 2015 report reflects a large increase in units from the March 2015 report; the presumption is that these are new units not yet fully leased

Vancouver - September 2015

Unit Type%

VacantAverage Rent($)

Rent/ SqFt($)

Units Surveyed

Complexes

Studio 4.9% $596 $1.50 183 6 1 Bedroom 1.7% $837 $1.20 2,961 56 2 Bedroom/1 Bath 7.9% $972 $1.10 2,366 49 2 Bedroom/2 Bath 2.5% $1,146 $1.10 3,130 40 3 Bedroom/1 Bath 0.0% $1,089 $1.15 101 8 3 Bedroom/2 Bath 2.7% $1,329 $1.10 983 29

All 3.6% $1,022 $1.13 9,996 73

Source: Runstad Center for Real Estate Research, Fall 2015 Apartment Report


Rental Market Update- Affordable Rents (HUD)



1-Person Household 2-Person Household 4-Person Household

Income Level Annual Income Max. Affordable Rent Annual Income Max. Affordable

Rent Annual Income Max. Affordable Rent

115% AMI $59,225 $1,481 $67,620 $1,691 $84,525 $2,113

100% AMI $51,500 $1,288 $58,800 $1,470 $73,500 $1,838

80% AMI $41,200 $1,030 $47,040 $1,176 $58,800 $1,47060% AMI $30,900 $773 $35,280 $882 $44,100 $1,10350% AMI $25,750 $644 $29,400 $735 $36,750 $91930% AMI $15,450 $386 $17,650 $441 $24,250 $606

Income source: US Department of Housing and Urban Development effective 3/16/15Max. rent calculated as (annual income/12)*30%For units renting to households below 40% AMI, contact City staff.

Rental Market Update- Downtown Project Pipeline


Fourteen developments and more than 1,200 units using City’s multi-family limited tax exemption program Eleven approved and three pending Six include 20%+ of units targeting low-

moderate income tenants

Rental Market Update- Overview of Current Projects

- 8

Overview of Current Projects

CCRA Mutli-Family Tax Exemption Program Application Review - 9

Project Summary 19th & Broadway 16th & E Street Heroes Place

Lot Size - Square Feet 10,000 29,000 25,000

Total Development Square Feet 19,000 32,500 26,432

Number of Stories 3 2 5

Floor Area Ratio 1.90 1.12 1.06

Commercial Square Feet - - -

Total Development Cost (Exc'l Land) ~$13,700,000 ~$4,250,000 ~$3,650,000

Number of Residential Units 36 48 48

Studio 28 - 20

Live Work One Bedroom 6 5 4

Live Work Two Bedroom 2 8 0

One Bedroom – One Bathroom 0 5 6

Two bedroom – One Bathroom 0 30 12

Three Bedroom 0 0 3

Penthouse 0 03

Overview of Current Projects

CCRA Mutli-Family Tax Exemption Program Application Review - 10

Project Summary 19th & Broadway 16th & E Street Heroes Place

Proposed Rents

Studio $850 $1,008

Live Work One Bedroom $1,150 $800 $1,650

Live Work Two Bedroom $1,200 $1,150

One Bedroom – One Bathroom $1,100

Two bedroom – One Bathroom $1,275

Low/Moderate Income Units?Yes – 20% Yes – 20% No

Length of Exemption 12 Years 12 Years 8 years

Parking On Site 10 20 63

Overview of Current Projects-Rent Comparisons


Development Studio Rent 1 BR Rent Rent $/SFFunstad Survey Sept. 2015

$596 $837 $1.31

The Uptown $1,155 $1,335 $1.62

13 West $714 $754 $1.22

15 West $671 $708 $1.09

1510 C $850 $1,200 $1.51

19th & Broadway $850 $1.74

16th & E Street $1,100 $1.75

Heroes’ $907-$1,108 $1,650 $1.03

Financial Analysis- Impact of Exemption


Taxing Districts Defers placement of new residential construction

value on tax roll New non-residential construction added as usual and

land value remains on tax roll All other taxes apply as usual

Property Owner No assessed value added for multi-family residential

improvements No property taxes due for limited term

Financial Analysis- Downtown Investment Guidelines


Developed in 1999 to help guide City’s direct investments in Downtown revitalization Per August CCRA meeting: not directly applicable to tax

exemption program but still reviewed Fiscal Benefit: Neutral or positive net present value of City’s

financial participation Developer Return: Limit City funds to an amount that allows the

developer a fair return City Debt: Minimize use of City debt Recent Addition: 1,500 new units supporting a rich socio-

economic population

Financial Analysis- Observations


Fiscal Benefit All three projects provide a positive net present value fiscal

benefit over 20 years (at 4%) The NPV of new property, construction sales tax & utility taxes

exceeds the NPV of the deferred property taxes by a factor of 1.9 to 2.5 over 20 years

Developer Return Developer returns on both projects are not high relative to a

risk adjusted/market return

Financial Analysis- Observations


Observations 19th & Broadway 16th & E Street Our Heroes Place

NPV City of Vancouver Taxes: Proposed Development $227,000 $302,000 $459,589

NPV City of Vancouver Taxes: No Development $13,000 $33,000 $47,636

Estimated Construction Jobs (IMPLAN Multiplier) 26 35 110

Project Design-16th & E Street-Site Plan

CCRA Multi-Family Tax Exemption Program Application Review - 16<

- E

Str

eet

- >

15th Street ->

Project address:500 E 15th and 500 S 16th Street

Project Design-16th & E Street-Elevations


North Elevation Facing 16th Street

Building 1West Elevation

Facing E Street

Project Design-16th & E Street-Elevations


South Elevation Facing 15th Street

Building 4West Elevation

Facing E Street

Project Design-19th & Broadway-Site Plan


<- B

road

way ->

<- A

lley ->

<- 19th Street - >

Project address:Northeast Corner of Intersection Broadway and East 19th St

Project Design-19th & Broadway- Elevations


South Elevation Facing 19th Street

Project Design- Heroes’ Place


North Tower North Elevation South Tower North Elevation

Project address:409 E Mill Plain Blvd and 412 E 13th Street



East Elevation



Top View

<- “D

” Street ->

<- “E

” Street ->

<- East 13th Street- >

<- East Mill Plain Blvd- >

• Development sub-committee comments

• Board member questions/discussion

• Questions staff should address prior to taking to City Council

• Specific CCRA comments to forward to City Council

Discussion


City Council workshop and consideration of tax exemption agreements in January

Tax Exemption program to be reviewed in 2016

Next Steps/Timeline


Peggy Sheehan, Program ManagerCommunity and Economic [email protected]

Chad Eiken, DirectorCommunity and Economic [email protected]

Questions and Discussion


Multi-Family Housing Limited Tax Exemption Program Applications City Center Redevelopment Authority...

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