Agenda - 11-15-2016 - 6-a - Minutes

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14 1 the HOME Consortium are Orange County and the Towns of Carrboro, Chapel Hill, and 2 Hillsborough. Under the HOME Program Design, funds in the amount of$154,500 were 3 approved for the Downtown Housing Improvement Corporation, Inc. (DHIC) to support the new 4 construction of eighty (80) apartment homes known as Greenfield Place for households at less 5 than sixty percent (60%) area median income (AMI). This is a Low Income Housing Tax Credit 6 (tax credits) development and will be located on Legion Road in Chapel Hill on land to be 7 donated by the Town of Chapel Hill. 8 9 The County's Long Term Housing Affordability Policy establishes the acceptable strategies for 10 ensuring long term affordability in affordable housing programs supported by County financial 11 resources. Housing projects that are funded with Orange County HOME Program funds have 12 been subject to the County's 99-year long-term affordability period that includes recorded deed 13 restrictions. 14 15 DHIC has requested that the County reduce the 99-year affordability period to 40 years for the 16 Greenfield Place development. DHIC has expressed that the 99 year requirement makes 17 financing challenging and creates issues for the tax credit investor in how it models the project 18 for tax purposes. According to the agency, the 99-year affordability period may cause 19 challenges in getting the equity closed in as timely a manner as needed. DHIC also stated that 20 the 99-year affordability period could also create problems in the future when DHIC will need to 21 get new financing to make capital improvements to the buildings to keep them in high quality 22 condition for tenants. DHIC noted that the affordability requirement for the federal tax credits 23 used in this project is 30 years. The Town of Chapel Hill, which is also a partner in this project, 24 is requiring a 32-year affordability period. 25 26 Audrey Spencer Horsley said this item is a request from the DHIC to reduce the 99- 27 year affordable period to a 40-year affordability period, because of their concern that it would 28 affect investors, and pose challenges to close the project on time. She said this was part of the 29 HOME program design in 2015. 30 Audrey Spencer Horsley said this project is being completed in part by the Town of 31 Chapel Hill and they donated the land. She said Chapel Hill is requiring a 30-year affordability 32 period. She said Gregg Warren from DHIC is here to answer any questions. 33 Gregg Warren, President and Executive Director of DHIC, said the concerns are those 34 of their lenders and investors with a long-term affordability period, especially if a project 35 foreclosed. He said having a 40-year period of affordability is consistent with the 40-year loan 36 period with Orange County. 37 38 A motion was made by Commissioner Dorosin, seconded by Commissioner Price for the 39 Board to approve a 40-year housing affordability period for the DHIC, Inc. Greenfield Place 40 project. 41 42 Commissioner Jacobs said he will vote in favor of this motion, but he does not think it 43 best to view these ad hoc changes intermittently, and at the last minute. 44 John Roberts said the motion this evening sets aside the County policy, and he 45 recommended that the Board either amend the policy in the near future to establish criteria for 46 project requests like these, or amend the policy as a whole to permanently change the 47 affordability period. 48 Commissioner Dorosin amended his motion to: approve the 40-year housing 49 affordability period for the DHIC in Greenfield Place project, because the project is designed to 50 serve in part, residents making 30% or less of area median income, and 60% or less of area 51 median income, which are targeted demographics that this Board has made a commitment to