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Home My WebLink About04-20-2022 Housing in South Bend PresentationHousing in South Bend Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Segments of housing _______________________________________________________________ For a housing project you need: Market-rate rental Market owner occupied Affordable rental Affordable owner occupied Renter vs Owner Market vs AffordableLand Regulatory Finance Contractors and Material Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Financials For a Single -Family House (2BR) ~1,100 SQFT Costs Land Acquisition*: ~5-10% Materials: 40-50% Labor: 25-35% Arch. and Eng.: 8-15% Developer fee: 8-10% Total:~ $200,000 Funding Equity (private money): 10 -30% Private Loan: 50 -70% Gap (City): ~ 10-40% Total: ~ $200,000 Costs are roughly equal (except for less expensive finishes and furnishings) for “affordable” and “market” rate housing However, affordable housing needs to be further subsidized covering either part of a mortgage or loan or rent discount Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT •Cost of construction exceeds the appraised value (what the house will be worth after construction) almost everywhere in the City. •This is true both for affordable and market rate housing. •Without support on the gap of construction projects cannot move forward, but if we cover too big of a gap there are less projects we can support. Economics of Housing Draft analysis from Rice University Housing Economics Analysis to be released summer of 2022 Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Timeline for projects Housing projects are always developed by private groups: e.g. non-profits, for-profit, or individuals –the City does not develop , it supports development. Project Concept Site Selection and Acquisition Architectural Design Zoning Financing Building and Construction Permits Bidding and Sourcing Site improvements Construction Inspections Rent/Sale to Occupant Developer Contractor City Bank Resident 3 mo –1 yr 3 mo –6 mo 1 mo –3 mo ~ 1 mo 1 mo –3 mo 1 wk –3 wks 1 mo –2 mo 2 wk –1 mo 4 mo –10 mo 1 wk –2 wk Total: 15 –40 months Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Land •Provide city-owned land for projects. •Support site improvements. •Demolished blighted properties that cannot be recovered. How the City Helps Zoning •Zoning Ordinance Update which went into effect Jan. 2020. •Allows for additional housing types and flexibility in our neighborhoods. •Simpler language and processes that are easier to understand and are more inclusive. Financing •Tax-abatements. •Gap construction grants. •Repair and restoration. •Support tax credits. •Housing Counseling. •CHC –subsidized mortgages. Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Pre-Approved Plans •Saves ~$5,000 -$8,000 in soft costs and time. •Provides multiple options and choices in size. •Focuses on missing middle/ incremental development to build wealth and alternative income streams. To be released Q3 of 2022 Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 5-Year Project highlights (non-exhaustive list) Project Partner Impact Gemini Apartments South Bend Heritage Foundation 30 units, 6 reserved for homeless NNN Near Northwest Neighborhood 22 units completed or under construction 466 Works 466 Works 13 units completed or under construction South Bend Heritage Home Construction South Bend Heritage Foundation 21 units completed or under construction Miami Hills Infinity Real Estate 150 units retained and improved South Bend Avenue Homes South Bend Housing Authority 20 units under construction for remodel Hope Avenue Homes South Bend Heritage Foundation 22 units under construction Oliver Apartments South Bend Heritage Foundation 32 units completed Ivy at Berlin Place Heading For Home LLC 121 units completed 300 E. LaSalle Matthews LLC 144 units under construction Studebaker Lofts Great Lakes Capital 150 units completed Habitat Homes Habitat for Humanity 3 units completed Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Housing Programs with American Rescue Plan Act Funds Program ARP Budgeted Status Home Repair Assistance Programs $2.5 million 1st Phase (~$1 million) Public feedback opportunities in-person and online on the scope of programming. Team is working to develop parameters and announce target areas this summer Q3 2nd Phase TBD Housing Financing $2.5 million 1st Phase (up to $2.5 million) Solicitation development of single - family and multi -family housing,potentially remodels, Q3 Home Buying Assistance $1 million Lack of staff has made this more difficult to move forward Land Bank $250,000 Development of a business and operational plan with partners. Draft –for discussion purposes only CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Housing and Community Development Plan (2020 -2024) The Housing and Community Development Plan is not a breakdown of actual housing projects. This is a required document that specifies eligible expenses for Federal Funding In order to gain flexibility to support projects, as they are requested on an annual basis, we have a broad plan As part of the application for HUD Community Development Block Grant (CDBG) funding, the City team must submit a 5 -year Development Plan which outlines how the City may consider using CDBG funds in the future •Plan covers possible uses for CDBG, ESG, and HOME Investment Partnership Funds from HUD Further Resources •IHCDA Dashboard -https://indianahousingdashboard.com/ •Residential Market Potential Reports –Zimmerman/Volk Associates •https://southbendin.gov/department/community -investment/planning- community-resources/plans -studies/