Affordable/Workforce Housing Study
Chapter Four

Chapter Four:

MODELS AND CASE EXAMPLES

Development Models

California Workforce Housing

Marin Consortium for Workforce Housing-Employers and local governments formed a consortium to increase affordable housing, establishing a housing trust fund and a $7.5 million revolving loan fund. Jurisdiction initiatives within the consortium include a City of Novato set aside for government workers of one-third of 650 affordable housing units planned for construction at the former Hamilton Field military base; the water district offers loan up to $150,000 or 33% of the purchase price of a home, with repayment due upon sale of the property, 15 years from the date of the loan or when the employee leaves the agency.

Coastal Housing Partnership of Santa Barbara-Consortium of 15 public and private employers who worked out an agreement with a local lender to secure favorable financing for their employees. Employees get 80% loan at favorable rate and the lender makes a second mortgage of 10% of the purchase price. There are no direct costs to employers.

Nashville Housing Fund

The Nashville Housing Fund is a 501(c)(3) as well as a Community Development Financial Institution with revenue commitments totaling $13.6 million annually. It

receives money from the city, state and federal governments (47% of budget); 43% from banks, 4% from other financial institutions, 4% from corporations and institutions, and 2% from charitable organizations. It operates three programs: development loans for new construction of affordable housing, down payment assistance to promote homeownership of low and moderate income households and The Front Door, a counseling service for households wishing to buy a home.

Housing Trust of Santa Clara County

This housing trust fund is a public/private initiative created in 1997 by the Santa Clara County Board of Supervisors, Silicon Valley Manufacturing Group, Santa Clara County Collaborative on Housing and Homelessness and Community Foundation Silicon Valley. Its goals are to produce more long-term affordable housing, support first-time homebuyer opportunities and provide assistance for extremely low income households.

Its initial goal is to help 5,000 low to moderate income households by creating 3,000 affordable rental homes, 800 first-time homebuyer homes and support services for 1,000 homeless families.

The Trust has collected pledges of $20 million, which will leverage approximately $180 million in development, and made its first grants and loans in 2001. More than half of its funding comes from employers in the county (51%); 13% of revenue comes from the County; 23.5% comes from the cities within the County and 12% comes from private foundations, community organizations and individuals.

San Jose Affordable/Workforce Housing

Almaden Lake--The City of San Jose worked with three sets of developers to create a mixed income housing development on the hillside in popular Almaden Valley. Using LIHTC equity financing , a for profit developer working with a nonprofit partner developed 144 family rental units for very low income households next door to 35 moderate income for sale houses developed by a second for-profit developer with construction financing provided by the city of San Jose.

Nearby, a third developer more recently developer a 250 family rental complex, with 50 devoted to very low income households. 200 units of the development is financed by City-issued tax-exempt bonds, requiring that 20% of the units be set aside for very low-income households for 30 years. No City funds were needed to produce the 50 units of affordable housing.

Midtown--On a former Sears department store site, the City of San Jose, working with a for-profit and nonprofit partnership, created 62 ownership housing units, 31 of which were for moderate income households, 140 senior units, 139 were for very low income, and 90 family rental units, 54 for very low income households and 35 for low income households. The City provided $12 million of the total financing of $47 million.

San Francisco Chamber of Commerce Workforce Housing Committee and the Federal Home Loan Bank are raising a $4 million Workforce Housing Fund to increase homeownership opportunities for middle-income workers.

Silicon Valley Manufacturing Group in Santa Clara--175 companies, local governments, community leaders and labor representatives have spearheaded the establishment of the Santa Clara Trust Fund , raising $20 million in less than two years. They make low-interest loans to first time homebuyers and provide gap financing for affordable rental housing projects.

Los Angeles Public-Safety Employee Program-Provides $10,000 down payment assistance for police officers and firefighters and access to below-market financing through revenue bonds.

Affordable Housing Projects and Programs Outside California

Workforce Housing Development Project Model-Belle Creek--an award-winning 156 acre mixed-income, master-planned community located in suburban Denver (8 miles from downtown). The land was sold to the developer with the stipulation that Belle Creek be affordable to moderate, low and very income households and include a childcare center, computer lab, recreation center and charter school. The developer used a nonprofit developer to build the rental housing and find below market equity and community reinvestment act partners. Located between residential and industrial areas, sandwiched between railroad tracks and a gravel pit, it was a tough site to develop, but the city streamlined and fast-tracked the zoning and annexing process. It also set new design standards-12 foot wide alleys with 20 foot wide easements and 30 foot wide streets.

931 units; 156.1 acres; 6 for sale units per acre; completed 2002

13 single-family plans, easy-to-build box-on-box construction with vernacular porches, deep overhangs, well-detailed entries

51% of units had to be priced for people earning 80% of less of the AMI of $62,000.

Single-family for-sale units: $178,900 - $264,900; Townhouse units, $162,900 – 188,500; Rental units $550 – 900.

13 single family plans are easy-to-build, box on box construction; savings on framing were used to elaborate on details, such as good-sized, well-detailed entries and front porches, deep overhangs and other curb appeal features

For-profit developers Landcraft Communities working with non-profit developers (for rental units) Rocky Mountain Mutual Housing

Features include family center and charter school; town center and convenience retail; town green and pocket parks.

Won American Builders Association Gold Nugget Grand Award for Best Affordable Project-Detached, and Merit Awards for Best Community/Town Plan, Best Single Family Detached Home 1800-2300 square feet (small lot), Best Single Family Detached Home Under 1800 square feet (small lot), Best Single Family Detached Home under 2,200 sq. ft.

Supporting Home Ownership-Model Program

The City of Burlington joined with the Burlington Community Land Trust, Vermont Development Credit Union, and Fannie Mae in an initiative called Burlington's Home Ownership Program (BHOP).  The City works with Fannie Mae and local lenders to make specific mortgage options available to low- and moderate-income families who want to purchase homes in Burlington. 

Fannie Mae will purchase up to $10 million of the end loans originated by local lenders through this program, which uses many of Fannie Mae's community lending tools that focus on various flexible mortgage options designed to increase homeownership, such as lower down payment requirements and flexible underwriting, and home-buyer education and counseling provided by nonprofit organizations.

• No income or purchase price limits 
• Available to first time homebuyers AND people who have owned a house 
• Any 1-4 unit property in Burlington is eligible 
• Must be owner-occupied 
• $500 down payment for 1 unit 
• 5% down for 2 units (3% from borrower, 2% from other source) 
• 10% down for 3-4 units (5% from borrower, 5% from other source) 
• Maximum debt to income ratio: 1 unit = 42%; 2-4 unit = 43%

The features of Burlington's HomeOwnership Program includes: 

• Energy efficient mortgage (EEM) options that consider the projected energy savings a borrower may realize by purchasing or renovating a home to energy efficient standards. The EEM option provides an adjustment to the loan-to-value and qualifying ratios that favor the borrower. To qualify, the home must be rated energy efficient under guidelines issued by a residential energy service network (RESNET); 
• Employer assisted housing, an employee benefit and recruitment and retention tool that employers can use to help employees achieve homeownership through grants, forgivable loans, deferred or repayable loans, matched savings, interest-rate buydowns, and/or home-buyer education.

Transit Oriented Development

King County, Washington built the nation's first multi-family housing development over a park-and-ride lot and bus transit center. Created through partnership between County (housing trust fund), City of Redmond and Federal Transit Administration, it contains 308 units of workforce housing, 4500 square foot daycare facility, and a Metro park-and-ride transit center. All units are set aside for households with 60% or less area median income. Other King County transit-related affordable housing developments are underway in Renton, Seattle and Shoreline.

Alameda County, CA Affordable Housing Trust Fund--Using fees from market-rate developments, Alameda County and BRIDGE Housing, Inc. created 99 units of low and very low income housing and a community center near a BART station and ACTransit. The housing trust fund contributed to a funding package that includes HOME Partnership funds, Community Development Block Grant funds, Low Income Housing Tax Credits and private financing.

Other Model Programs

Howard University and Fannie Mae LeDroit Park Initiative-Provides down payment and closing cost assistance to university employees, police officers, firefighters, teachers and LeDroit Park residents.

Baltimore Employee Home-Ownership Program-Provides matching down payment funds up to $2500 and $7500 as a deferred 10 year loan. City uses CDBG, HOME and UDAG payments to fund this program.

Santa Fe Teacher Home Fund-Provides down payment, closing costs and low interest purchase loans for homebuyers with funds derived from the Land Title Trust Fund, companies placing escrow funds into interest bearing accounts, with the interest accrued then used to support community-housing programs.

Greater Minnesota Housing Fund-Spends $5 million annually on Employer Assisted Housing, including single family and multifamily projects. Funding comes from state, federal and local governments, foundations, nonprofits and employers. Examples of housing created: Pelican Rapids Townhomes, a 40 unit development. The employer purchased the development's Low Income Housing Tax Credits for 79 cents each, generating over $1.5 million in equity for the project. GMHF provided a $270,000 1% interest deferred loan.

Cambridge, Massachusetts-Requires commercial, hotel, retail and institutional development to pay a linkage fee of $3 per square foot to fund affordable housing programs.

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03.27.03