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Best laid plansHorrid tales of affordable housing
developmentNational Rural Housing Conference
2012
2003 - It sounded good at the time
O Plentiful resourcesO USDA self-help program running
strong, with administrative and mortgage funding
O Secondary financing availableO Rental housing LIHTC accessibleO Good market outside urbanized area
with high farmworker needs
Parksdale due diligenceO Sewer and water – commitment
letter!O ZoningO EnvironmentalO Eligibility for fundingO Competitive status of areaO MarketO Government requirementsO Offsite requirements
What can go wrong?O Structuring the purchase (when
possible option)O When elephants fight (city v. county)O A recession? Nah, can’t happen.O The American Dream on hiatus
Deal breakersO InfrastructureO Rights to develop / entitlementsO Funding contingenciesO Can you land bank?
TimelineO Option to Purchase agreement
signed – April, 2004O Purchased – June, 2005O HAC land bank loan - 2005O Design – proposed map September,
2006O Entitlements approved – February,
2007
The ProjectO 126 Single family homes in three
phasesO 96 Multifamily rental units in two
phasesO Neighborhood parkO Shared costs through assessment
districtO New water well for communityO New sewer lift station
Promises, promises
If you wish to be a success in the world, promise everything, deliver nothing.Napoleon Bonaparte
Some stuff worksO Rental housing development – better
than hoped forO First project funded – HOME 2008,
LIHTC 2009, placed in service 2010O Second project funded – HOME 2010,
LIHTC 2011, placed in service 2012
Parksdale Village I
Community Room
Some stuff doesn’t work
O Single family first phase – 49 lotsO First self-help group started June,
2010O Second group started October, 2010O Third truncated group started
December, 2011O Currently 23 lots remaining, no new
builders approved
What Happened?O Peak of real estate value in California
– 2006O By 2008, real estate values down at
least 30% from peakO By 2010, at least 50% down
How bad can it get?O Sewer lift station nightmareO AppraisalsO Loss of subsidies (eg. School fees)O New requirements, new costs
(sprinklers, Energy Star)
What have we learned?O Smaller projectsO Promises from local jurisdictions
often mean less than intendedO Beef up your kneepads
Parksdale Village II
The future, brightlyO Allocating costs to future phasesO Building when conditions dictateO Watch for RD eligibility
Why we persevere