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Slide 1
Slide 2
California Tax Credit Allocation Committee Update William Pavo
Executive Director Lisa Vergolini Deputy Director DC Navarrette
Regional Analyst 1
Slide 3
Topics Update of 2014 Results and Trends New Construction vs.
Rehab Trends Updated Credit Pricing 2015 Regulation Changes and
Proposals Cost Study 2
Slide 4
3 2014 Results Total awards: 80 after Round 2, plus 4-5 more
likely from a waiting list 49% of applicants (84 awards in 2013) ~
$91 million in annual federal credit ($89M in 2013) ~$101 million
in total state credit ($77.7M in 2013)
Slide 5
Trend: Applications and Awards 4
Slide 6
2014 Awards and Waiting List cont. Average project size: 58
units (62 in 2013) A Average TDC: $19.5M ($18.5M in 2013) A verage
federal credit award: $1.1M ($1M in 2013) Average public
contribution: $5.7M ($5.7M in 2013) 29.7% of TDC (30.7% in 2013)
5
Slide 7
2014 Project Size Units # of Projects % of Total 0 2467% 25
492934% 50 743035% 75 991214% 100+810% 6
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Trend: Federal Credits Per Unit 7
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8 2014 State Credits Available: $105.1 million* 9% projects:
$88.3 million 4% projects: $15.6 million Awarded: $115.5 million 9%
projects: $101 million 4% projects: $14.5 million Reaching into
2015: $10.4 million
Slide 10
9 2014 State and 9% Credits 2014: 30 awards, $101 million in
State credit No state credit exchange (SCE) 2013: 23 awards, $63
million 7 SCE, $18.7 million $77.7 million total Average per
project award 2014: $3.3 million (24% increase over 2013 - $2.7
million)
Slide 11
10 2014 Special Needs Projects with State Credits Nine of 30
State credit awards are Special Needs housing type projects In
2013, only one of 29 were Special Needs projects
Slide 12
11 2014 Special Needs Projects with State Credits cont. Twelve
Special Needs awards total Nine requested State credits Six DDA/QCT
projects also requested State credits Three non-DDA/QCT projects
received 130% federal basis boost along with State credits
Slide 13
12 2014 4% plus State Credits 21 four percent-plus-State
applications (8 in 2013) $15.6 million available for 2014 8 awards
(7 in 2013) $14.5 million in State credit ($9 million in 2013)
Slide 14
13 2014 Native American Apportionment Three applicants (Bishop,
Hoopa, and Washoe tribes) Two awards R1: Bishop Paiute (New
Construction, Large Family) R2: Trinity River Elders Village (New
Construction, Seniors) Points scores: 148, 140 respectively
Slide 15
14 2014 Native American Apportionment TDC: $11.9M (30 units)
and $4.1M (12 units) Public funds: NAHASDA ($1.7M and $915K)
Federal Credit: $885K and $388K State Credit: $3.5M (R1 Bishop
Paiute Project)
Slide 16
15 New Construction vs. Rehab Trends: Projects
Slide 17
16 New Construction vs. Rehab Trends: Credits
Slide 18
17 Resyndications: Projects
Slide 19
18 Resyndications: Federal Credits
Slide 20
Credit Pricing First Round 2014 Letters of Intent (September
2014) 46 projects total - 9% and 4% + State $1.10 - $1.17 14
projects (31%) $1.05 - $1.09 6 projects (13%) $1 - $1.04 8 projects
(18%) $0.95 - $0.99 11 projects (25%) $0.90 - $0.94 5 projects
(11%) $0.89* 1 project (2%) *San Jacinto, CA 19
Slide 21
2014 Regulations Changes for 2015 Accessibility Thresholds CBC
Chapter 11(B) applicable in 2014 5% with mobility features, 2% with
sensory features 2015: 10% with mobility features, 4% with sensory
features Lease up priority for accessible units to households who
need them 20
Slide 22
2014 Regulations Changes for 2015 Senior Housing Type 62+ age
standard 50 percent of all units on an accessible path must be
developed to California Building Code Chapter 11(B) standards
21
Slide 23
2015 Regulation Change Proposals Retain 2008 California
Building Code, Title 24, Part 6 calibration Add Zero Net Energy
(ZNE) option for scoring and threshold Permit larger maximum
developer fee in project cost and basis for 4% new construction
projects of 150 units or more 22
Slide 24
Cost Study: The Sample ProjectsDescription 995New construction
projects awarded tax credits between 1999-2010 and placed in
service by February 2012 430565 projects were excluded because they
did not receive a survey response from the Developer Survey. 40030
projects were excluded from the final analysis data set due to
missing or incomplete TCAC files or other data issues. 400Final
analysis data set contained 400 projects.
Slide 25
Costs by Construction Start Date 24
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Key Points 2011: Only two projects Constant dollar expression
2002-2009: + $108K per unit increase 2002-2005: + $87K per unit
increase 25
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Costs by Construction Start Date 26
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Average Cost by Other Characteristics 27
Slide 29
Key Findings: 1. Local Factors Local reviews and sources added
costs: Community opposition (5 percent) Design review changes (6
percent) Redevelopment projects (7 percent) 28
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2. Parking Podium or subterranean parking (6 percent) Relative
to surface or other parking 29
Slide 31
3. Developer Factors Larger developers may correlate with cost
efficiency Developers with licensed general contractor on staff may
correlate with cost efficiency Quality/durability correlate with
cost (15%) 30
Quality cont. Windows: Aluminum sliders; vinyl, PVC, or
casement; or wood clad casement 91% reported vinyl, PVC, or
casement Flooring: vinyl tile; sheet linoleum; or ceramic tile 73%
reported sheet linoleum 32
Slide 34
Quality cont. Bath tubs: fiberglass; enameled steel; or
enameled cast iron 92% reported fiberglass Counter tops: plastic
laminate; synthetic or ceramic tile; stone 70% reported plastic
laminate 33
Slide 35
4. Economies of Scale 10% increase in unit count correlates
with a 1.7% decrease in per-unit cost Example: Taking 60 units to
66 units could reduce $300,000 units to $295,000 $18M becomes a
$19.5M cost 34
Slide 36
5. Unit Type Smaller units cost less Example: SRO units cost
31% less than large family units Senior units cost 18% less than
large family units Taller (4+ floors) cost 10% more $28K more per
unit than 1-3 floor bldgs. 35
Slide 37
6. Land Costs Land features affect building height, parking
configurations, staging, as well as acquisition costs Podium
parking 6% more expensive per unit than projects without podium
parking Approximately $17K/unit additional cost 36