HomeMy WebLinkAbout08-09-20 Public Comment - A. Lewendal - Affordable HousingFrom:Chris Mehl
To:Agenda
Subject:FW: Affordable Housing
Date:Sunday, August 9, 2020 7:23:22 AM
Attachments:Affordable Apartment Program .xlsx
Chris Mehl
Mayor, City of Bozeman
cmehl@bozeman.net
406.581.4992
________________________________________
From: Anders Lewendal [anders@lewendal.com]
Sent: Saturday, August 08, 2020 2:07 PM
To: Chris Mehl
Subject: Affordable Housing
Mr. Mayor:
I hope all is well for you and your family.
Since my term at CAHAB ended a few years ago, I have often thought about our community affordable housing
concerns. One of the best programs we have at our disposal is the LIHTC. Unfortunately, getting an allotment for
Bozeman is far and few between. Not to mention the criteria and rules are extensive.
If you would, consider an idea that, I think, is simpler, local, and reproducible. It would also provide the same or
lower cost rentals compared to LIHTC units and provide perpetual affordability.
Please look at the attached spreadsheet. Yes, I know it is very short on detail. I want to propose a plan that is
exceptionally simple to execute and manage.
There are two things that keep us from making affordable housing: land and construction costs. We cannot do much
about construction costs or the cost of regulations, but we can postpone the 20%, or so, wage, profit and overhead
associated with each project. We can also, as a community, provide land that creates perpetual affordability with a
one time investment.
My plan asks the city to provide land and core infrastructure and a builder to postpone all wage/profit/overhead to
lower the principle and interest. The builder would provide all financing and construction. A DNRC loan to the
builder would keep the P&I more affordable. If HRDC managed, for a fee, all of the rental units, we could provide
rents as low as $700 per month for 30 years. The builder would receive a fully paid off project at the end of the 30
year term while paying the city the full future value of the land. The funds would provide the city the opportunity to
start a new similar program. Or, perpetual affordability.
Tell me if you have questions or if you think Bozeman is ready for a public/private partnership that would create
real affordable housing.
Best Regards:
Anders
Anders Lewendal Construction, Inc.
[Picture]
Affordable Apartment Program
100-1000sq.ft., 2bd,2ba apts.100,000 Total square footage
$140/sq.ft. hard costs $140.00
Land paid back at full value at term
Wage/Profit/Overhead paid at term
$14,000,000 Total hard costs
2.5% DNRC 30 yr. loan $55,317 Monthly total P&I
divide by 100 units $553.17 Gross monthly cost/unit
Property taxes based on $14M x 1%$0.00 State deferral
Maintenance $55 Per unit per month
Management fee at 6%$42.00 Base on $700 rent
Insurance $50.00 Per unit per month
Total rent per month per unit $700.17 Rent for 30 yrs. per unit
utilities paid by renters