Title
Housing Trust Fund Support Request
Action
Action:
Approve a $2,425,000 Housing Trust Fund allocation to Ascent Real Estate Capital for the acquisition of the Lake Mist Apartments.
Body
Staff Resource(s):
Pamela Wideman, Housing and Neighborhood Services
Miles Vaughn, Housing and Neighborhood Services
Explanation
§ Ascent Real Estate Capital is requesting a Housing Trust Fund (HTF) allocation of $2,425,000 for the acquisition of Lake Mist Apartments, located at 1100 Lake Mist Drive in Council District 3.
§ Lake Mist Apartments meets the city’s Naturally Occuring Affordable Housing (NOAH) criteria which include:
- The property’s age is greater than 15 years;
- Rents are in the area median income (AMI) range that are at risk due to surrounding neighborhood dynamics;
- The property can be rehabilitated to maintain a good quality of life for residents for the next 20 years or more;
- The property is located in an area with close proximity to quality jobs, schools, and transportation infrastructure; and
- The property is located in an area experiencing transformative change and property appreciation.
§ The total development budget is $20,084,000, which amounts to a 1:7 leverage ratio of HTF financing. The investment also includes a 20-year deed restriction for the preservation of 144 units at the following AMI levels:
- 43 units at 30 percent AMI,
- 7 units at 41 percent to 50 percent AMI,
- 65 units at 51 percent to 60 percent AMI, and
- 29 units at 61 percent to 80 percent AMI.
§ A third-party inspection has been performed on the property to determine the existing property conditions.
§ The proposed rehabilitation consists of the followng:
- Railing replacements;
- Exterior lighting and safety improvements;
- Site work and drainage improvements;
- Heating, ventilation, and air conditioning unit and water heater replacements;
- Appliance and lighting replacements; and
- Flooring replacements.
Background
§ In August 2018, City Council adopted the Housing Charlotte Framework which recommends:
- Prioritizing large-scale NOAH properties, and
- Establishing a preservation fund to subsidize acquisition of NOAH properties, which is noted as a national best practice for preserving existing affordable and workforce housing.
§ On March 25, 2019, City Council adopted Guidelines for Preserving Naturally Occurring Affordable Housing (guidelines). The goals of the guidelines include:
- Limiting displacement of current residents by preserving existing affordability;
- Preserving quality affordable and workforce housing by increasing the number of available deed-restricted units and the physical structure of the units;
- Providing low-interest loans so that high-performing for-profit and non-profit owner operators can purchase and/or upfit NOAH properties and preserve them as affordable;
- Allowing existing owners to participate in return for deed restrictions and demonstrated management and maintenance history; and
- Aligning guidelines with other city policies.
Charlotte Business INClusion
§ All HTF funded projects and their developers are subject to MWSBE goals determined based on the amount of the HTF allocations received.
Fiscal Note
Funding: Housing Trust Fund