The URL can be used to link to this page

Home My WebLink AboutH.3.a Condo Research compilation by CAHAB membersCondo Cash in Lieu and other alternatives 1. Cash payment in lieu of constructing Community Housing Units a. Formula for computing the Cash in Lieu amount = the average of the median sales price of condos in Bozeman for the past two fiscal years less the average price of the 10 lowest priced condos advertised on the Bozeman MLS in the last 6 months of the previous fiscal year. i. EXAMPLE: If average sales price was $320,000 and the average income and the average of the 10 lowest prices is $227,000 then the Cash in lieu amount is $93,000.00. 2. Long Term Affordable Rental a. Developer or builder retains title to dwelling unit but must rent or lease it at an affordable rate based on the following table. At the end of the required rental or lease term the developer or builder may increase the rent to market rate as long as the rent increases at no more than 10% per year or may sell the unit with 5% of the sale price being returned to the Community Housing Fund. If the unit is sold before the end of the required number of years that the dwelling unit was to be held at affordable rent then the percentage of the sale price of the unit shown below must be returned to the Community Housing Fund. Type of Unit Number of Years Rent Allowed Early Sale Percentage Studio 25 Years 30% of $20,000 Annual Wage 25% One Bedroom 20 Years 30% of $30,000 annual wage 20% Two or more Bedrooms 15 Years 30% of $40,000 annual wage 15% 3. Cash equivalents – Land, infrastructure or other items of value equal to the cash in lieu amounts described in item 1 above and not otherwise required by the Bozeman Municipal Code, may be accepted in lieu of providing housing units upon approval by the Director of Community Development. Hourly Wage Annual Wage 30% of Annual Wage Monthly Affordable Housing Cost $4.81 $10,000.00 $3,000.00 $250.00 $7.21 $15,000.00 $4,500.00 $375.00 $9.62 $20,000.00 $6,000.00 $500.00 Studio $12.02 $25,000.00 $7,500.00 $625.00 $14.42 $30,000.00 $9,000.00 $750.00 One Bedroom $16.83 $35,000.00 $10,500.00 $875.00 $19.23 $40,000.00 $12,000.00 $1,000.00 Two Bedroom $21.63 $45,000.00 $13,500.00 $1,125.00 $24.04 $50,000.00 $15,000.00 $1,250.00 $26.44 $55,000.00 $16,500.00 $1,375.00 $28.85 $60,000.00 $18,000.00 $1,500.00 $31.25 $65,000.00 $19,500.00 $1,625.00 $33.65 $70,000.00 $21,000.00 $1,750.00 $36.06 $75,000.00 $22,500.00 $1,875.00 Seeburg, Stratton, Wheeler  We met at the Coldsmoke Coffee House at 2051 W Oak St Suite 5, Bozeman, MT 59718 on Wednesday June 24th at 10am.  The meeting was attended by o Noel Seeburg o Greg Stratton o Steve Wheeler.  We called the meeting to order at 10:08 and there was no public comment or changes to the agenda.  At first the discussion centered around the current environment of making condos available to borrowers through existing programs, namely FHA lending. o Greg shared his experience of trying to get a viable condo project through the process of getting it approved for FHA loans and found it to be time consuming. o Noel shared the conversations he had with lenders and property managers about the process where is was determined to be tedious and typically took three weeks. o Steve commented that we may not be able to use existing resources to provide condominium loans to the people that need them.  Steve then proposed approaching some of the local banks about creating an all- inclusive package to builders that would include financing for the construction and lending to new tenants.  We spent the rest of the morning discussing the viability of the proposal: o Location (where to find the land) o Cost to build o Incentives to builders  Impact fees? o Incentives to the bank/lender  CRA Credits o Incentives to borrowers or the buyers of the condos  Down payment assistance and/or interest rate reduction  We then adjourned the meeting at 11:10 with Steve assigned with talking to a couple of local banks and Greg to provide an update to Kevin Thane. I know that Steve was able to talk with a few banks and got some good information, but he did not share any of that information with me before he left. Tengdin: US Affordable Condo Projects CAHAB Meeting 7.8.20 New HUD rules make affordable condos feasible (Oct. 2019) ●Single-unit mortgage approvals make it easier for individual condos to be eligible for FHA-insured financing ●More FHA loans per project by easing restrictions on commercial space, creating more eligibility for those loans by mixed-use projects ●Only 35% required to be owner-occupied (previously 50%) ●Certifications extended from two years to three years, and only new information must be added for recertification ●FHA will now insure 75 percent of mortgages in an individual condo project https://homeownershipmatters.realtor/issues/new-condo-rules-could-create-more-affordable-housing/ Santa Monica, California 2 or 3-unit projects: may pay the Affordable Housing Fee instead of dedicating an onsite or offsite unit as affordable housing. 4 to 15-unit projects: must provide onsite or offsite units: (Developers of condo projects can pay an Affordable Housing Fee based on the Affordable Housing Unit Development Cost if the number of required units is less than 0.75) ●20% of the units onsite as moderate-income ownership housing (see table) ●20% of the units onsite as low-income rental housing ●10% of the units onsite as very low-income rental housing ●5% of the units onsite as extremely low-income rental housing ●if offsite, 25% more units than would have been required onsite Santa Monica, California (Continued) 16+ unit projects: must provide onsite or offsite units ●25% of the units onsite as moderate-income ownership housing (see table) ●25% of the units onsite as low-income rental housing ●15% of the units onsite as very low-income rental housing ●10% of the units onsite as extremely low-income rental housing ●if offsite, 25% more units than would have been required onsite Park City, Utah Housing Assessment and Plan ●Public-Private partnerships are key a.Land and construction costs are too high to provide affordable prices without subsidies b.Current and future housing development agreements are projected to produce 400 units. To achieve the goal of 800 affordable units by 2026, the remaining units will be developed directly by the City, or in partnership with other entities. c.In 2016, Park City committed $19 million in Lower Park Ave RDA bond funds and $5 million in resort community tax revenue to launch a multi-year development pipeline. These funds subsidize land costs and up to 20% of construction costs for affordable units, and eighty percent revolves back to fund future affordable housing projects. https://www.parkcity.org/Home/ShowDocument?id=64943 Berkeley, California ●The City's Inclusionary Housing Ordinance for new ownership/condominium projects requires that 20% of the total units be reserved for purchase by low-income households. ●Qualified buyers are selected by a lottery managed by the developer Bloom Berkeley ●40-unit development includes 6 affordable 1 and 3 bedroom condos ●Preference given for Berkeley residents and workers Next Steps Reach out directly to cities successfully including condos in their affordable housing plans for more detail