Item 3: Presentation by Mueller Foundation and Community Wheelhouse on Affordable Housing Updates — original pdf

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Affordable Housing Update Mueller Redevelopment Muell RMMA Plan Implementation Advisory Commission November 15, 2022 Agenda Mueller Redevelopment Muell Background • • • Vision and Goals Designing the Program Exceeding Expectations By the Numbers • • Affordable Rental Options Affordable Ownership Options About the Mueller Foundation • Milestones Leadership • Implementation • Financial Stability • • Ownership Figure • Outreach & Marketing Sustainability Retention • Resales • Program Integrity • Equity • Accountability • Property Stewardship • 2 | RMMA PIAC 11/15/22 Background: Vision and Goals Vision Mueller will be an interactive, mixed-use, mixed-income community that will be a model for responsible urban development, offering a compact, pedestrian-oriented alternative to the land-consumptive and automobile-dependent development patterns that could influence the form and pattern of growth within Austin. Goal Redevelopment must offer a wide range of housing choices in order to create a new community of socially and economically diverse residents. 3 | RMMA PIAC 11/15/22 Background: Designing the Program – 2004-2007 • Development with intermixed affordability was a very new concept; it had not been done in Texas before; 25% affordability an ambitious goal. • One-year affordability was the MDA requirement for homeownership; the City and the surrounding community wanted Mueller to go farther. The land trust statute did not yet exist when the Mueller Affordable Homes Program was forming. $165,000 homes were available in the marketplace. • • • • Stapleton (now known as Central Park): 10% affordability; fewer resale protections; less interspersed The team worked with City of Austin and PeopleFund/PeopleTrust to design the affordability preservation program. • Creation of a nonprofit (Mueller Foundation) to steward the housing program and other public goals. 4 | RMMA PIAC 11/15/22 Background: Exceeding Requirements Requirements Beyond Requirements MDA requires 25% affordable housing: For sale requirement = 80% MFI for one year For rent requirement = 60% MFI for five years MDA incorporates Affordable Housing Resolution confirming Catellus commitment to use good-faith efforts to provide longer and deeper affordability City selected Catellus as the master developer Master Development Agreement (MDA) regulates the redevelopment Mueller is a certified S.M.A.R.T. Housing development Longer-term affordability up to 30 years using fixed-appreciation model, renewed upon resale for ownership units Long-term affordability from 40-99 years for all rental apartments Added some new and resale workforce housing at 120% MFI Self-sustaining model to monitor and enforce compliance with affordability restrictions and provide post-ownership support, i.e. stewardship Market-rate rental properties have a minimum of 10% affordable units, with the majority delivering 15% affordable units Predominantly affordable rental developments have reached deeper affordability: some units serve 30- 50% MFI or below Affordable homes integrated throughout 5 | RMMA PIAC 11/15/22 Background: Exceeding Requirements Median Family Income MDA Requirement Current MFI For Sale For Rent Requirement < = 80% MFI < = 60% MFI < 50% to 80% < 30% to 60% Beyond the First Year MDA Requirement Current MFI For Sale For Rent Good-faith effort Good-faith effort Up to 120% Up to 80% MFI of Home Buyers 19% 4% 10% <=50% MFI 50-60% MFI 60-70% MFI 70-80% MFI 80-120% MFI 21% 46% MFI of Affordable Renters 1% 8% 25% <=30% MFI 30-50% MFI 66% 50-60% MFI 60-80% MFI 6 | RMMA PIAC 11/15/22 Background: Diversity of Affordable Rental Options Wildflower Terrace AMLI @ Mueller Sync @ Mueller AMLI @ Aldrich Aldrich 51 Mosaic @ Mueller Overture AMLI Branch Park The Jordan Ryan Companies Project (coming soon) AMLI Ivy (coming soon) 7 | RMMA PIAC 11/15/22 By the Numbers: Affordable Rental Options Number of Apartment Units Community Market Affordable Total % Affordable Years Affordable Mosaic Sync Wildflower Terrace AMLI Mueller Aldrich 51 AMLI Aldrich Overture The Jordan AMLI Branch Park Ryan Co. Project AMLI Ivy CURRENT TOTAL1 397 271 30 237 36 270 171 0 345 293 277 44 30 171 42 204 48 30 132 61 52 49 863 441 301 201 279 240 318 201 132 406 345 326 10% 10% 85% 15% 85% 15% 15% 100% 15% 15% 15% 27.1% 1Does not include more apartments yet-to-be announced 2,327 3,190 50 50 99 50 99 50 50 40 50 50 50 8 | RMMA PIAC 11/15/22 Background: Diversity of Affordable Ownership Options Yard Homes Garden Court Homes Multi-level Condos Mueller House Condos Row Homes Cottage Homes 9 | RMMA PIAC 11/15/22 By the Numbers – Affordable Ownership Options Number of Ownership Units Current Status/Affordability Period Market Home Type TOTAL Affordable (80%) Workforce (120%) Mueller House 109 Garden Court Shop Garden Town Green Paseo Row Cottage Other Yard Other Row Condo 2 58 23 84 52 14 11 808 585 267 0 0 70 120 24 50 17 63 308 52 704 27 0 32 0 0 0 0 0 0 0 59 58 23 154 256 76 96 28 871 893 319 TOTAL 2,011 2,7741 = 25.4% affordable at 80% MFI = 27.5% affordable and 120% MFI 1 This figure includes all homes built, plus homes planned in Section 11 2 This figure does not include Austin Modern Lofts projects 10 | RMMA PIAC 11/15/22 About: Milestones in Affordable Home Ownership Program Housing Summit I • Demonstrate to builders what can be done Interspersed homes • • Ferguson consultant Shift to Group II: • Preserve affordability based on home values • Projections, studies • Legal docs 2005 Mueller Foundation Created • Austin Community Fnd • PeopleTrust consulting • Established board 2013 2007 Expert Consulting: • National consultants • Transition planning • Affirmative marketing • 10-year projections 2019 2020 New, More Staff: • Housing based ED • Ops Manager • Added partners 2021 2008 2021 Housing Summit II • Affordability by design Increased density • • Live-work opportunities 2006 2007 Updated Policies/Programs: • Affirmative marketing • Home rental policies • Restrictive covenant • Listening sessions 2016 2018 TCAD Solutions: • MOU assigns value of home to original affordable price • Share with TCAD annual affordable inventory Design • Shared- Appreciation Model • Pioneer Program • Documentation 2022 More Policies: • Home sustainability • Capital improvement support 11 | RMMA PIAC 11/15/22 About: Mueller Foundation Leadership Purpose: The Mueller Foundation is a 501(c)3 non-profit corporation created by Catellus to support and fund long-term community goals for Mueller with an emphasis on affordable housing Board Members: Suzanna Caballero Rob Repass Kerry Tate Jim Walker Currently recruiting for two more board members Matt Whelan Greg Weaver Leslie Wingo 12 | RMMA PIAC 11/15/22 Support home buyers through process Income certification Education Stewardship of properties and owners Responsibilities • Marketing and outreach • • • • • Affordable resales • Compliance, documents and data • • Reporting to Foundation board, to City Informational resource for homebuilders About: Mueller Foundation Program Implementation Staff Members • • Frances Ferguson, Executive Director Phyllis Greenberg, Operations Manager Memberships • Grounded Solutions Network Partners • Austin Community Foundation • BCL Texas • Brown, Graham & Company • Catellus Development • City of Austin • Community Wheelhouse • Contractors Smith Strategies; MAPA LLC • Hancock, McGill & Bleau • HousingWorks • Matt Malcom, CPA • Mueller’s homebuilders • Mueller Neighborhood Association • Mueller Property Owners Association • Texas ProTax 13 | RMMA PIAC 11/15/22 About: Mueller Foundation Financial Stability Main Revenue Sources: 2020-2021 Audit: • One quarter of one percent (0.0025%) of every property sale in Mueller, including all residential and commercial buildings, even after transition • Transaction fees: stewardship, sales, refinancing • Resales returned to the market when some homes are less sellable or there too many homes entering the market simultaneously or Group I market value is more than the Foundation can afford • • • Financial statement disclosures are neutral, consistent and clear Encountered no significant difficulties in dealing with management relating to the performance of the audit • No uncorrected and/or corrected misstatements identified by us as result of audit procedures were material, either individually or in the aggregate Full audit report available at: muellerfoundation.org/about/audited- financial-statements/ Main Expenses: • Resale home purchases • Salaries and professional services “In our opinion, the accompanying financial statements referred present fairly, in all material respects, the financial position of the Mueller Foundation as of December 31, 2021 and 2020, and the changes in net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.” 14 | RMMA PIAC 11/15/22 Affordable Ownership Through June 1, 2022 Current Status/Affordability Period 746 families served to date: • 595 original new homes (560 in program) o Includes 45 workforce homes at 120% o 35 released to market • 151 resales 560 affordable new and resale homes currently in program as of June 1, 2022 15 | RMMA PIAC 11/15/22 Outreach & Marketing Most Recent Information Sessions To Date: 16 live (Zoom) information sessions Average 80 registrants and 40 participants per session 225+ local organizations contacted • • • Updated marketing materials: • • • Infographic: road to ownership Resource guide FAQs Updated outreach: • • • Emails, calls to interest lists and stakeholder groups Targeted advertising on social media, radio, newspapers Encourage attendance to Zoom info sessions, visit website, contact Wheelhouse; automatically added to interest list Results of Affirmative Marketing (self-reported): Anglo: 43% • Latinx: 25% • Asian: 15% • Black: 13% • • Mixed: 2% • • Native American: 0% Did not disclose: 2% An example of the information session promotion the Mueller Team has shared 16 | RMMA PIAC 11/15/22 Sustainability Retention of Affordability • • • • Legal docs: Original 2nd Lien/Deed of Trust now Restrictive Covenant Legal docs: Purchase Option & Right of First Refusal Agreement with TCAD 30-year: Some owners will live in their homes 30 years and pay off the lien/covenant o Homeowner has option to renew the affordability covenant after 30 years o Must be primary residence o No leasing without Mueller Foundation approval (very limited – e.g. 1 year for health/work/education) Financial Risk for Resales • • • • Funding for Group 1 repurchases Do incomes and appreciation “match” Interest rates Property condition (discussed below) 17 | RMMA PIAC 11/15/22 Sustainability Integrity of Program • Annual compliance letters • Multiple enforcement actions for major defaults (e.g. occupancy) • No foreclosures to date Stewardship of Equity • Updated affirmative marketing program launched 2021 • Down-payment program for lower-wealth prospective buyer pool applicants launched 2022 Long-Term Accountability • Developing plan for ongoing relationship with City • Recruiting additional board members • Annual financial audit • Agreement with TCAD Property Stewardship • • In process: Capital replacements In process: Capital improvements 18 | RMMA PIAC 11/15/22 Thank you. 19 | RMMA PIAC 11/15/22