FINANCING EQUITABLE TOD

NALHFA

Dena Belzer May 19, 2011

Quick Introduction

Strategic Economics and the Center for Transit Oriented Development (CTOD)

Housing Affordability

Employment Opportunities

Unlike Other Development Types, TOD is Defined by Multiple Related to “Scales” Related to Transit Connectivity

TOD Is Not Just About Projects, its About Neighborhoods and Districts With a Range of Opportunities and Constraints

Transit Oriented Neighborhoods Need More Than Housing Development/Preservation

Financing TOD Includes Financing a Wide Array of Activities

Any Financing for TOD Must Be Considered in a Broader Context

Difficulty financing long-term, higher risk projects

TOD can take 20 years to build out, and traditional financing is much shorter term

High holding costs for land near transit Costly infrastructure investments often

required up front Few developers are sufficiently experienced

and capitalized

Private Development

Public

Sector

Financing Strategies

Infrastructure and Amenitie

s

Public

Sector

Financing Strategies

Infrastructure and Amenitie

s

Private Development

Financing TOD in Weak Market Areas Can Be Especially Challenging

Financing Strategy in Warm or Hot Market Locations(aka “Value Capture”):

Financing Strategy in Cooler Market Locations(aka “Unlocking Private Capital”):

New and Emerging Strategies for Financing TOD

1. Structured Funds

2. Leveraging Partnerships

3. Tapping Other New Partners

4. Joining with Other Projects

Bay Area Transit Oriented Affordable Housing Fund

$50 million equitable TOD Fund Nine-county Bay area 10 year Fund; 5 year origination period Five loan products for affordable housing,

community facilities and other neighborhood uses

TOAH Fund Priorities

Affordable Housing – 85% of Fund capital is targeted to support the creation and preservation of affordable housingOther Neighborhood Uses – Up to 15% of Fund capital may be used to support community facilities, child care centers, health clinics, fresh food markets and other neighborhood retailGeographic Diversity – The Fund is committed to deploying capital in Priority Development Areas (PDAs) in all nine Bay Area Counties

TOAH Fund Partners

Made possible by: Great Communities Collaborative (GCC) Metropolitan Transportation Commission (MTC)

CDFI Consortium LIIF is Administrative Agent CSH, ECLF, LIIF, LISC, NCCLF and the Opportunity

Fund are the originators Grants provided by three foundations: Ford, Silicon

Valley and San Francisco

TOAH Capital Stack

3. Senior Loans 3. Senior Loans

2. Program-Related Investments and Flexible

Loans

2. Program-Related Investments and Flexible

Loans

1. Equity or Grant $ 1. Equity or Grant $• Public Sector – $10 million

from the MTC

• Philanthropy and CDFIs – $15 million from six CDFIs and Ford, SF Foundation and Living Cities (4 layers here)

• Banks – $25 million from Morgan Stanley and Citi Community Capital

TOAH Loan Products

Acquisition Loans Predevelopment Loans Construction Bridge Loans Construction/Mini-Perm Loans Leveraged Loans for NMTC deals

DHA and Metro West Housing Solutions (Lakewood CO) Assembling Land for TOD

Partnership of:Denver Housing AuthorityLakewood Housing AuthorityCity of DenverCity of LakewoodGeneral Services Administration, Region 8Regional Transportation DistrictDenver Region Council of Governments

Leveraging Over $540 Million in Existing Investments in the Corridor to raise other funds based on shared priorities

Boston Public Health Commission

BPHC $6.4 million ARRA obesity prevention grant will be used to: Decrease consumption of sugar-sweetened

beverages through counter-advertising and policy change

Increase active transit through bike share programs and land-use policies

Improve neighborhood-based food production and distribution through environmental changes that create additional space for community and backyard gardening

Enhance the integration of high-quality and frequent physical activity and education into the school day

In 2005, 26 percent of black adults, 22 percent of Latino adults, and 14 percent of white adults in Boston were considered obese.In a 2010 study, LRT was found to reduce a passenger’s Body Mass Index by 1.18 kg/m2 compared to non-LRT users in the same area over a 12-18 month follow-up period. This is equivalent to a relative weight loss of 6.45 lbs for a person who is 5'5. LRT users were 81% less likely to become obese over time.

Better Denver Bond Measure (2007)

$550 million to fund 211 infrastructure projects including improvements at five transit stations. 

Station; Funds Given

Overall Purpose Cost Breakdown Current Status

Decatur/Federal;

$2.07 million

Provide basic connections to nearby low-income housing and Denver Human Services' offices.

--Police cameras--Xcel lighting--Sidewalk improvements--Yet to determine rest of funds

Construction to start in Q1 2011

In Concluding: Two Key Lessons

1. Need to build “buy in” around the value of transit oriented locations for all income levels (building political will and setting a policy framework)

2. Partnering with a broader array of entities, including the transportation agencies, creates a much larger pool of options and opportunities for financing both housing and other necessarily community facilities.

For More Information

“CDFIS and Transit Oriented Development”

Federal Reserve Bank of San Francisco

Community Investment Center

www.reconnectingamerica.org