Council to consider senior housing plan
- Published: September 15, 2011
Over the summer Home, Inc. came to the Village with a plan to develop a senior apartment building on the Barr property, with the help of development partner, Buckeye Community Hope Foundation, based in Columbus. The developers proposed using the housing credit finance model, a housing management team from outside the community, and elibigility standards that were new to the community. Not surprisingly, questions on the details of the project persist.
Village Council will hold a public hearing on Monday, Sept. 19, to consider rezoning the property from residence B to planned unit development, in order to accommodate a higher density on the lot and allow the developers to apply for federal financing. If the PUD is approved, the project would come back to Village Planning Commission and Council for final approval.
Home, Inc., the local sponsor, and Buckeye, the lead developer, are proposing a 37-unit, two-story building on the 1.6-acre Barr property on Limestone Street and Xenia Avenue. The facility includes one- and two-bedroom units that would rent for approximately $560 and $660, respectively, including utilities. The facility will mainly serve seniors age 55 and over with incomes at or below 60 percent of area median income for Greene County, which would equal about $30,000 for a couple. The building is designed to meet Enterprise Foundation’s Green Communities standards and is expected to cost about $6.19 million. Construction would be financed primarily through federal tax credits, which are purchased by Ohio businesses via the Ohio Housing Finance Agency for use in affordable housing projects.
Buckeye has an option to purchase the Barr property from Friends Care Community, who received the property as a gift from the Morgan Family Foundation in 2007. According to Home, Inc. Executive Director Emily Seibel, the option is contingent on receipt of project funding. Developers Seibel and Roy Lowenstein, vice-president of Buckeye Foundation, hope to secure the rezoning by the November finance application date. They would find out in March if the project was funded, according to Lowenstein.
Buckeye Hope Foundation
Buckeye Community Hope Foundation was chartered in 1991 as an affordable housing nonprofit for low-income families. According to the group’s Web site, Buckeye has created, owns, or operates more than 1,500 housing units in Ohio, West Virginia, Indiana, Nebraska, Tennesee and South Carolina, and over 500 additional units of housing are currently under development. Buckeye has also administered over $25 million in federal, state and local grants for housing and other social service projects. In 1994, the organization expanded its mission to include diploma-track education and vocational training programs for at-risk youth in the Columbus area.
Buckeye’s development division has recently helped to complete several affordable housing projects around the state, including one in Mount Vernon called Dogwood Hills, which is somewhat similar to the one proposed for Yellow Springs. Buckeye partnered with LEADS Community Action Agency to develop the 28-unit, single building apartment facility for seniors aged 55 and older. The facility, whose one- and two-bedroom units rent for $425–$495, opened in January 2011, and three months later, it was full, according to LEADS Asset Manager Teresa Groves.
The $3.94 million project was initiated in 2007 with housing tax credit funds, but when the housing market crashed, the credits went with it, Groves said. The project was eventually rescued by federal stimulus money in the form of tax credit exchange funds and a federal housing development assistance loan, according to Lowenstein, who previously worked at Ohio Capital Corporation for Housing, a Columbus-based nonprofit that raises capital and manages tax credit assets for affordable housing projects.
Buckeye also helped to develop Arthur Place in Delaware, Ohio, an 80-unit attached single-family complex for seniors, which also filled within the first four months after the facility opened in 2009. The one- and two-bedroom apartments rent for $610–$725, and, according to maintenance manager Larry Sears, with over 100 people on the waiting list, “the place stays full.”
Steve Torsell, executive director of Homes on the Hill, selected Buckeye to help develop a 30-unit scattered site affordable housing development on the West side of Columbus. As the head of a small, focused nonprofit, working with Buckeye, a large, multipurposed corporation juggling many projects around the state, was complicated and difficult in terms of communication issues, Torsell said. But Buckeye helped Homes on the Hill to bolster its tax credit financing with federal Neighborhood Stabilization loans, which was complex and took longer than expected. The two entities worked hard to define their roles to smooth out the procedure, and the relationship worked out “fine,” Torsell said.
Buckeye often uses RLJ management services in Columbus to manage the properties it develops or helps to develop. Groves is satisfied with the services RLJ provides for Dogwood and three other LEADS housing facilities, where RLJ fills the apartments, collects the rent, maintains the property and also provides some social services and an on-site manager at each of the facilities. While Homes on the Hill chose a more urban-oriented manager for its project, Torsell said that RLJ came highly recommended by Columbus city officials.
Home, Inc. and Buckeye are again proposing to use RLJ to manage the local facility once it is completed.
For the Yellow Springs project, Home, Inc. is the local sponsor that saw evidence for the local need and proposed both the project and its location. Buckeye brings financing experience and often uses the federal government’s housing tax credit program administered by the state because it combines public resources with the discipline of the private sector that invests in it, Lowenstein has said.
According to the Ohio Housing Finance Agency, since 1987 the housing credit (also known as the low-income housing tax credit) program has used federal income tax credits to offset the building acquisition, new construction, or substantial rehabilitation costs for 75,000 rental housing units in Ohio. Because the program relies on private banks and businesses to exchange some of their tax liability for housing investment credits, the price of the credits varies according to the market and investment competition. According to Lowenstein, the current rate of investment exchange for tax credits is $.80–$.90 on the dollar, which varies depending on the regional economy of the proposed project. Based on other rates he has seen, an attractive community in a competitive region such as this is likely to get about $.82–$.85 on the dollar, Lowenstein said, though a more detailed analysis from Ohio Capital is forthcoming. At the top rate, for example, the Yellow Springs project could be completely covered by tax credits, but at the lower rate, the project would likely come up short and would need the income from two to three market rate units to repay the debt, he said.
More housing needed?
The need for senior housing in Yellow Springs was demonstrated by Friends Care Community, when that organization proposed a similar 30-unit, single apartment building for seniors on the Barr property in 2008. Friends abandoned the project last year due to lack of funding, and Home, Inc. currently has an option to purchase the Barr property. Friends had completed a survey of 322 households within two miles of Yellow Springs with residents 55 and older, which concluded that 25 people were potential applicants for their proposed senior independent living units. According to the survey report, over half of the survey respondents indicated they would be “interested in leasing or renting a home or apartment in the future,” and a quarter of them “had plans to move.” While the report anticipated that 37 percent of the Yellow Springs population would be 65 or over (seniors) by 2010, seniors in the village number about 700, or just over 20 percent of the population, according to the census.
To find out more, Home, Inc. and Buckeye looked at demographic data this year including the income levels of the senior population in the Yellow Springs area. According to Lowenstein, there are just under 100 households within five miles of the village whose incomes would qualify them for the proposed facility. Assuming a “capture rate” of 10–20 percent, that wouldn’t be quite enough to fill the project, according to Lowenstein. But there are also about 300 income-eligible homeowner households within the same area (and several thousand more within eight miles) who could also choose to live in the apartments. And with over 20 years of building affordable housing in Ohio, Lowenstein believes that additional applicants will also come from surrounding communities and from some local residents who will bring their family members to the village. Given the size and type of community and the kind of project it is, he anticipates about eight to 10 applicants will come from outside the community.
In addition, the developers are commissioning a full market study, the results of which are pending.
Who is eligible?
Trying to anticipate the number of people who might apply to the facility raises questions about eligibility for the apartments. In order to qualify for Ohio tax credit funding, most of the units will be aimed at residents making 60 percent or less than the area median income (AMI), including both income and assets, according to Seibel. The value of assets, including home, retirement savings, etc., are considered by adding to an applicant’s income level either 2 percent of the total asset value or the annual return from holdings, whichever is bigger. In Greene County 60 percent of AMI would be about $27,000 per year for one person, and $30,000 for two. A retired couple, for example, receiving $24,000 per year in Social Security income with a home valued at $175,000, and a retirement account with $80,000, could qualify to live there.
While the eligible residents must be income-qualified, the facility will be open to those who have had the ability to acquire a savings during their working years, Seibel said.
“What it does is cast a wider net for seniors,” she said, adding that many of those who would qualify now wouldn’t have necessarily qualified while they were working.
The market-rate units wouldn’t be limited by income eligibility requirements. While those units cannot be funded through the tax credit program and would need local funding, the developers are investigating the possibility of including three or four of them to help defray some of the development costs, Lowenstein said last week.
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