|
Post by Guest 912 on Aug 15, 2024 14:35:19 GMT
1. We feel the $230 cost per square foot should be re-examined due to continued rising construction costs, in both metro & rural areas. 2. Contractor fee percentages should be adjusted to 3% overhead and 3% requirements. 3. Contingency for new construction needs to be increased to 7% for the rising construction costs and unexpected items. 4. Reconsider allowing state credits for 9% deals to increase projects in rural areas that aren't feasible in the first round.
|
|
|
Post by Jeff Hall on Aug 19, 2024 12:58:55 GMT
Total Development Costs should be increased in the 2025 QAP. It has been over 5 years since the TDC limits were changed. During that time, interest rates have increased by over 300 bps, and inflationary costs have increased by over 40%. While I would recommend eliminating a TDC cap for 9% applications - if a developer can evidence a balanced S/U, noting credit awards capped anyway - there is little risk in the current environment in substantially increasing TDC limits for 4% transactions. The state remains undersubscribed and is facing a housing crisis in both rural and urban areas. An increased TDC limit will permit more transactions to occur at the level of quality and finish that should be expected in Oklahoma. To avoid this issue arising in subsequent QAP revisions, I recommend TDC limits are tied to the annual CPI rate, resulting in predictable, and fair, adjustments annually.
|
|
|
Post by Erinn Roos-Brown on Aug 20, 2024 0:02:19 GMT
August 19, 2024
Deborah Jenkins Oklahoma Housing Finance Agency 100 NW 63rd Street Oklahoma City, OK 73116
Re: Travois Comments on 2025 QAP
Dear Ms. Jenkins,
Thank you for the opportunity to provide feedback during the development of OHFA’s draft 2025 Qualified Allocation Plan (QAP). Since its establishment in 1995, Travois, Inc. has consulted on 225 LIHTC projects totaling over 6,400 homes with Indigenous Nations and Tribally Designated Housing Entities (TDHE) across the country including 9% LIHTC projects with the Quapaw Tribe, Seminole Nation of Oklahoma, and Wichita and Affiliated Tribes. Travois assists Tribal LIHTC developers at every stage of development and operations – from LIHTC application and equity closing to architectural design to ongoing compliance.
Set-Asides Travois understands that the 2025 QAP is set to be finalized next month, but we want to encourage OHFA to consider the creation of a Tribal Set-Aside now and for the future. Currently, there are 38 federally recognized Native American Tribes in Oklahoma. Oklahoma has the largest American Indian population in the United States, making up over 14% of the state’s entire population. This is a significant portion of your community, and they deserve a set-aside to address specific Tribal housing needs. Eight states with large Tribal populations including Arizona, California, Oregon, North Dakota, South Dakota, Michigan, Nevada, and New Mexico have already implemented Tribal Set-Asides. These set-asides were created in recognition of the significant challenges of housing development on Tribal land and to ensure that the housing needs of this population are met.
We request that OHFA add a Tribal Set-Aside or award points to projects sponsored by a Tribe or TDHE that are intended to serve Tribal members. We ask that OHFA recognize the large Tribal population in the state, the unique complexities Tribal projects face, and reward those types of projects accordingly. We want to point out that there should be a requirement under this set-aside or scoring category, if adopted, that the project is both Tribally sponsored, and the intended renters are also Tribal members.
Scoring
3. Development Location: Proximity to Amenities Travois requests that OHFA expand the radius for amenities in rural areas. Four miles is incredibly restrictive in any rural area, but especially on Tribal land. Tribes have limited land options and unlike other housing developers, they cannot select alternative sites that will score better for the LIHTC application. Instead, they must work with the land that they have, which may or may not be within four miles of schools, grocery stores, parks, hospitals, libraries, banks, or the other locations on the list of amenities provided in the QAP. With 10 points available in this category, a project’s fundability is severely hurt by this scoring criterion alone.
We request that OHFA expand the Proximity to Amenities radius for rural areas to 10 miles.
Development Amenities (Attachment #13)
It is unnecessarily burdensome to require that a general contractor sign the Attachment #13 form. At the time of application, when only preliminary plans are available, entities that are required to publicly bid construction documents in all likelihood are not in a position to know who the contractor may be. We suggest making the required form signed by the contractor a later milestone like equity closing, 10% test, or issuance of 8609s. Having the form signed by a representative of the ownership entity and the architect at the time of application is reasonable and more feasible for all applicants.
10. Development Cost Efficiency This category is by far the largest points category with 29 points possible and it heavily favors projects with a higher number of units. Tribal projects are typically smaller scale with only 20 to 30 units and rehab projects can be even smaller depending on the needs of the community.
We see this scoring category as problematic because it eliminates any opportunity for projects that meet specific policy objectives and to be able to compete based on merit versus just project size/number of units or credit request. This is extremely unfair to non-profit and Tribal projects which operate in constrained geographies and cannot support massive amounts of debt from cash flow from higher-income tenants. Instead, Tribal applicants and non-profits have been pushed out of being able to compete for the very reason that the QAP should be showing preference—serving the lowest-income tenants for the longest period of time.
The reality is that projects with lower incomes are less financially viable using hard debt to fill the gap when the incomes of tenants residing in those projects is significantly lower. That is certainly true for the vast majority of Tribal projects trying to be developed in Oklahoma. Indirectly, OHFA continues to penalize projects that need more tax credits which simply cannot support a higher level of debt. The current process unfairly rewards for-profit developers that can charge higher (or maximum) rents (which cash flow in turn can be used to support a much higher level of debt). This is not an equitable system where preference is supposed to be provided to projects serving the lowest income under Section 42.
Thank you for the opportunity to provide comments on the 2025 QAP documents. If you have any questions regarding the suggestions above, please do not hesitate to contact me.
Sincerely,
Erinn Roos-Brown Project Manager Travois, Inc.
|
|
OCAH Membership Comment
Guest
|
Post by OCAH Membership Comment on Aug 21, 2024 21:21:40 GMT
PAGE 77, at the bottom of the page “singed” spelled incorrectly, change to “signed”.
PAGE 78, the next to last bullet “copes” spelled incorrectly, change to “copies”.
Posted by Andrea Householter, ED
|
|