Item 4. Presentation by Catellus, Mueller Foundation and HomeBase on Mueller Affordable Housing Updates. — original pdf

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Affordable Housing Update Mueller Redevelopment Muell Robert Mueller Municipal Airport Plan Implementation Advisory Commission November 12, 2024 Agenda Mueller Redevelopment Background • • Designing the Program Vision and Goal Affordable Rental Update • Affordable Rental Options • Exceeding MDA Requirements • By the Numbers Affordable Ownership Update • Affordable Ownership Options • Exceeding MDA Requirements • By the Numbers Purpose and Leadership Program Partners Program Implementation About the Mueller Foundation • • • • Milestones • Financial Stability • Outreach & Marketing Transition • • Retention Accountability Muell 2 | RMMA PIAC 11/12/24 Background: Vision, Goal & Requirements 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. Vision Goal Redevelopment must offer a wide range of housing choices to create a new community of socially and economically diverse residents. MDA Requirements MDA requires 25% of all housing to be affordable For ownership requirement = 80% MFI for one year For rental 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 3 | RMMA PIAC 11/12/24 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 nationally. • One-year affordability was the MDA requirement for homeownership and 5-year affordability requirement for rental; 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 11/12/24 Background: HomeBase Collaboration • HomeBase is a 501(c)3 nonprofit sister to Austin Habitat for Humanity that provides affordable housing consulting services. In March 2023, the Mueller Foundation hired HomeBase to manage Mueller’s affordable re-sale program. • • In July 2023, Catellus also hired HomeBase to: o Manage income qualification for all affordable homebuyers and renters o Guide buyers under contract through the affordable home closing process o Help confirm Mueller’s apartment communities are complying with their affordable housing rental agreements o Support the overall marketing of the Mueller Affordable Homes Program o More information available at www.homebasetexas.org/ 5 | RMMA PIAC 11/12/24 Affordable Rental: Diversity of Options Mosaic @ Mueller Sync @ Mueller Wildflower Terrace AMLI @ Mueller Aldrich 51 AMLI on Aldrich Overture The Jordan AMLI Branch Park Rivette Tower (leasing) AMLI North Park (leasing) AMLI’s Next Community (construction) 6 | RMMA PIAC 11/12/24 Affordable Rental: Exceeding MDA Requirements Mueller has 25% all current and upcoming rental units as affordable to those who qualify Market-rate rental properties have a minimum of 10% affordable units, with the majority delivering 15% affordable units Long-term affordability from 40-99 years for all rental apartments Predominantly affordable rental developments have reached deeper affordability: some units serve 30-50% MFI and The Jordan provides some transitional housing for those who had experienced homelessness Mueller is a certified S.M.A.R.T. Housing development MFI of Affordable Renters 8% 1% 24% 67% <=30% MFI 30-50% MFI 50-60% MFI 60-80% MFI 7 | RMMA PIAC 11/12/24 Affordable Rental: By the Numbers Number of Apartment Units Completed, Constructed & Contracted Community Market Affordable Total % Affordable Years Affordable Mosaic Sync Wildflower Terrace AMLI Mueller Aldrich 51 AMLI Aldrich Overture The Jordan AMLI Branch Park Rivette AMLI North Park AMLI Next Community 397 271 30 237 36 270 171 0 345 293 277 550 44 30 171 42 204 48 30 132 61 52 49 98 441 301 201 279 240 318 201 132 406 345 326 648 10% 10% 85% 15% 85% 15% 15% 15% 15% 15% 15% 25% 100% 50 50 99 50 99 50 50 40 50 50 50 50 CURRENT TOTAL 2,877 961 3,838 8 | RMMA PIAC 11/12/24 Affordable Rental: Auditing Tax-credit projects • Audit and compliance performed by the State of Texas for Wildflower Terrace, Aldrich 51 and The Jordan • Catellus also monitors unit designation between MFI percentages (e.g. 30%, 60%, 80%, etc.) Income Verification: • To be completed by a third-party for all market rate developments • Currently conducted by HomeBase with any concerns sent to Catellus Monitoring • Market-rate developments submit monthly rent rolls to HomeBase for high-level review of vacancies and rental rates • Any concerns with the information provided are shared with Catellus Auditing • City of Austin audits for S.M.A.R.T. Housing multifamily developments • Mueller MDA – annual audit on both sale and rental housing Reporting • Per the Mueller MDA: Catellus provides two semi- annual affordable housing reports (June and December) The Mueller Project Team and City Housing staff are working together to determine the City’s role and oversight of multi- family developments post-MDA. 9 | RMMA PIAC 11/12/24 Affordable Ownership: Diversity of Options Yard Homes Garden Court Homes Multi-level Condos Mueller House Condos Row Homes Cottage Homes 10 | RMMA PIAC 11/12/24 Affordable Ownership: Exceeding MDA Requirements Mueller has 25% all current and upcoming ownership units as affordable to those who qualify Longer-term affordability: 30 years using fixed-appreciation model, renewed upon resale for ownership units Self-sustaining model to monitor and enforce compliance with affordability restrictions and provide post-ownership support, i.e. stewardship Affordable homes integrated throughout and indistinguishable from market rate housing Added some new and resale workforce housing at 120% MFI 47% MFI of Affordable Owners 7% 15% 10% 21% < 50% 50%-59% 60%-69% 70%-80% 81%-120% 11 | RMMA PIAC 11/12/24 Affordable Ownership: By the Numbers Number of Ownership Units Completed, Constructed & Contracted Home Type Market Affordable (80%) Workforce (120%) TOTAL Mueller House 109 Garden Court Shop Garden Town Green Paseo Row Cottage Other Yard Other Row Condo TOTAL 58 27 84 52 14 11 797 555 262 1,969 0 0 70 120 24 50 17 63 308 52 704 0 0 0 27 0 32 0 0 4 5 68 58 27 154 256 76 96 28 858 867 319 2,7411 = 25.7% affordable at 80% MFI = 28.2% affordable and 120% MFI 1 This figure includes homes and condos built or under construction, including Section 11 and Mueller’s three condo projects: Pearlstone’s Parkside and Austin Modern Loft’s Iris and Concourse 12 | RMMA PIAC 11/12/24 Affordable Ownership: Retention All 639 69 132 362 59 17 Group 1 Group 2 84 10 11 29 34 0 555 59 121 333 25 17 Current Status/Affordability Period TOTAL Garden Home Mueller Home Row Home Yard Home Cottage Home 864 families served to date: • • 43 released to market 682 original new homes, including 45 “workforce” at 120% MFI o Some homes are less sellable or there too many homes entering the market simultaneously or o Group I market value is more than the Foundation can afford • 182 resales 639 affordable new and resale homes currently in program as of June 1, 2024 13 | RMMA PIAC 11/12/24 Mueller Foundation: Outreach & Marketing Most Recent Information Sessions To Date: • 30 live (Zoom) information sessions • Average 160 registrants and 60 participants per session • 245+ 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 HomeBase; automatically added to interest list Results of Affirmative Marketing (self-reported thru 8-14-24): • Anglo: 47% • Latinx: 28% • Asian: 11% • Black: 11% • Multi: 2% • Native American: 1% An example of the information session promotion the Mueller Team has shared 14 | RMMA PIAC 11/12/24 Mueller Foundation: Leadership Purpose: Board Members: 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 Suzanna Caballero Rob Repass Kerry Tate Jim Walker Matt Whelan Greg Weaver Leslie Wingo 15 | RMMA PIAC 11/12/24 Mueller Foundation: Program Partners Team Members • • • • Frances Ferguson, Executive Director Phyllis Greenberg, Operations Manager Sophia Shaney, Document & Data Management Lindsay Smith, Outreach Support Operating Partners • HomeBase • Texas ProTax • Matt Malcom, CPA • Mueller Property Owners Association • Winstead Austin Community Foundation BCL Texas Brown, Graham & Company Catellus Development City of Austin Additional Partners • • • • • • Grounded Solutions Network • HousingWorks • Mueller’s homebuilders 16 | RMMA PIAC 11/12/24 Mueller Foundation: Program Implementation Home Sales Information sessions and materials • • Answer questions • Refer first-time homebuyer to learn more • Refer some to credit counseling • Conduct income certification • Equity stewardship: o Updated affirmative marketing program o Down-payment program for lower- wealth prospective buyers • Report info to homebuilders, Catellus, City Home Resales • Foundation has recorded Purchase Option; thus has first right to purchase the home • HomeBase manages resale process: o Determine home price o Market to pre-qualified affordable buyers on waiting list o Manage sale transaction • Report info to Catellus, City Ongoing Stewardship • Compliance management: o Ensure owners living in property or require them to sell o Annual compliance letters o Allow temporary rental opportunities • Maintain working relationship with TCAD • Work closely with POA: o Assessment increases o Check for property sales within Mueller to confirm funding source o Educate owners about stewardship, future maintenance costs 17 | RMMA PIAC 11/12/24 Mueller Foundation: Milestones 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 New, More Staff: • Housing based Exec Dir • Ops Manager • Added partners Expert Consulting: • National consultants • Transition planning • Affirmative marketing • 10-year projections 2021 2007 2019 2020 Transition Prep: • Hired HomeBase • Stronger POA relationship • Home maintenance stewardship 2023 2008 2021 2024 Housing Summit II • Affordability by design • Increased density • Live-work opportunities 2006 2007 Design • Shared- Appreciation Model • Pioneer Program • Documentation 2016 2018 TCAD Solutions: • MOU assigns value of home to original affordable price • Share with TCAD annual affordable inventory Updated Policies/Programs: • More Affirmative marketing • Home rental policies • Restrictive covenant • Listening sessions Expanded Compliance: • Updated policies • Developing 2022 MOU with POA More Policies: • Home sustainability • Capital replacement support • Enforcement 18 | RMMA PIAC 11/12/24 Mueller Foundation: Financial Stability Main Revenue Sources: • One quarter of one percent (0.0025) of every property sale in Mueller, including all residential and commercial buildings • Stewardship fee to help cover admin costs • Resales returned to the market, when necessary Main Expenses: • Resale home purchases Salaries and professional services • • • 2023 Mueller Foundation Audit: Should be ready by December 2024 • Anticipate another clean audit with neutral, consistent financial statement 2021-2022 Full audit report available at: muellerfoundation.org/about/audited-financial- statements/ 19 | RMMA PIAC 09/12/23 Transition: Retention Retention of Affordability • • • • Legal docs: Original 2nd Lien/Deed of Trust now Restrictive Covenant - recorded Legal docs: Purchase Option & Right of First Refusal - recorded 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 • Property condition • Funding for Group 1 repurchases • Do incomes and appreciation “match” • Interest rates 20 | RMMA PIAC 11/12/24 Transition: Accountability Goal: to retain as many affordable homes as possible, but there will be attrition: • • • • Outside factors like interest rates or economy After 30 years, some homeowners may not want to stay in the program, despite tax increases Some Group 1 homes may be too expensive for Foundation to purchase Some home layouts may be less desirable for affordable households to want to purchase Mueller Foundation operates like any 501c3 nonprofit organization: • Experienced board of directors who review facts, figures and financials • Considering to bring on new board members • Standard accounting principles and annual audit • Experienced executive director • HomeBase as institutional partner Mueller Foundation & Property Owner Association Operating MOU: • • • Residential resale certificates Commercial sales Compliance support Planning to develop a future report to the community: • • Posted online for all to see post-MDA To be shared with: o City of Austin o POA o Affordable homeowners o Mueller’s apartment managers o Other relevant stakeholders 21 | RMMA PIAC 11/12/24 Thank you. Latest section of Mueller’s affordable and market-rate homes, April 2024 22 | RMMA PIAC 11/12/24