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Multifamily Tax Exemption Program
Applications
Vancouver City Council Workshop
August 1, 2016
Peggy Sheehan, CED Program Manager
• Rental Market Update
• Multifamily Tax Exemption Program
• Proposed Projects
• Block 6 at the Waterfront
• Hutton Block
• Discussion/Next Steps
Presentation Overview
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Rental Market Update
Source: Runstad Center for Real Estate Studies Spring 2016 Apartment Report
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Clark County Apartment Market Survey – Spring 2016
Rental Market Update
The September 2015 report reflects a large increase in units from the March 2015 report; the presumption is that these are new units not yet fully leased
1-Person Household 2-Person Household 4-Person Household
Income
Level Annual Income
Max. Affordable
Rent Annual Income
Max. Affordable
Rent Annual Income
Max. Affordable
Rent
115% AMI $59,225 $1,481 $67,620 $1,691 $84,525 $2,113
100% AMI $51,500 $1,288 $58,800 $1,470 $73,500 $1,838
80% AMI $41,200 $1,030 $47,040 $1,176 $58,800 $1,470
60% AMI $30,900 $773 $35,280 $882 $44,100 $1,103
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Income and Affordable Rents (HUD)
Multifamily Tax Exemption Program Overview
• Defers placement of new residential construction value on
tax roll
• New non-residential construction added as usual and land
value remains on tax roll
• Two options:
• 8-year exemption with no affordability component
• 12-year exemption with affordability component (20%
of units for tenants earning up to 115% AMI)
• Available in City Center and Fourth Plain areas
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Multifamily Tax Exemption Project Pipeline
• 14 completed or approved developments (more than 1,400
units total)
• 2 applications
• Among the 16 total projects, 4 target 20%+ of units to tenants
at/below 115% AMI
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7
Multifamily Tax Exemption Project Pipeline
New Application: Block 6
Developer: Gramor Development
Project location: 655 W Columbia
Way (one block east of Grant Street)
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− 53 units plus commercial
space
− 53 on-site parking spaces
− $22.2 million development cost
− 8-year exemption requested
New Application: Hutton Block
Developer: Master Development
Project location: 1506 Main Street
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− 108 units plus commercial
space
− 42 on-site parking spaces
− $13.4 million development cost
− 12-year exemption requested
Overview of Proposed Projects
Block 6 Hutton Block
Total Development Cost
(excluding land) $22,243,173 $13,398,587
Lot Size (sq. ft.) 34,205 43,930
Total Development Area (sq. ft.) 72,948 66,960
Number of Stories 6 4
Floor Area Ratio 2.13 1.52
Commercial Area (sq. ft.) 6,564 2,000
Number of Residential Units 53 108
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Proposed Rents and Unit Mix
Block 6 Hutton Block
Unit Types Proposed Rents # Units Proposed Rents # Units
Studio - - $565 - $710 44
1-Bedroom $1,726 - $2,167 22 $990 - $1,130 42
2-Bedroom $2,925 20 $2,070 - $2,460 20
3-Bedroom $3,709 9 - -
Penthouse $3,641 2 - -
Live/Work - - $1,950 2
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Rent Comparisons
Project 1 BR Rent Rent $/SF
Runstad Survey
(spring 2016)
$837 $1.31
The Uptown $1,335 $1.62
Broadway and 19th - $1.74
500 E 16th Street $1,100 $1.75
Our Heroes Place $1,650 $2.00
Block 6 $1,726 - $2,167 $2.67
Hutton Block $990 - $1,130 $1.95
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Financial Analysis
• Fiscal Benefit to City
• Both projects provide a positive net present value (NPV) fiscal
benefit over 20 years
• The NPV of new property, construction sales tax & utility taxes
exceeds the NPV of the property tax exemption by a factor of 1.5 to
2.8 over 20 years
• Developer Return
• Developer returns on projects are not high relative to a risk
adjusted/market return
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Financial Analysis – Tax Revenue and Jobs Estimates
Block 6 Hutton Block
Net Present Value of City Tax
Revenue (over 20 Years) $671,793 $761,580
Net Present Value of Tax Exemption
(over 20 Years) $435,891 $270,613
Construction Jobs 202 103
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Project Design: Block 6
15
Project Design: Block 6
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Project Design: Hutton Block
17
NW 16th St
NW 15th St
Was
hing
ton
St.
Mai
n S
t.
Project Design: Hutton Block
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Project Design: Hutton Block
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• CCRA reviewed applications July 21, 2016
• City Council public hearing and consideration of tax exemption
agreements August 15, 2016
• Multifamily Tax Exemption Program to be reviewed for possible
changes this year
• August 22, 2016 workshop
• Proposed public hearing September 12, 2016
Next Steps/Timeline
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Peggy Sheehan, Program Manager
Community and Economic Development
Questions and Discussion