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HPD OVERVIEW
HPD is the largest municipal affordable housing agency in the nation and our
mission is threefold.
2. To improve and expand our efforts to preserve the quality and stability
of all our housing stock.
HPD both responds to complaints regarding housing conditions (such as
heat or hot water issues) and proactively identifies troubled residential
properties for prevention efforts. Between 2002 and 2013, inspectors made
5.4 million total visits in response to complaints.
3. To use our investments in housing, in code enforcement, and in asset
management strategically to help reinvigorate neighborhoods, while
ensuring the stability and affordability of the neighborhoods’ housing.
In addition to administering numerous affordable housing development
programs, HPD administers the country’s fifth largest Section 8 Housing
Choice Voucher program to provide a rental subsidy to over 32,000 low
income households.
1. To implement Mayor de Blasio’s plan to preserve or develop 300,000
units of affordable housing by 2024.
In 2014, the City launched Housing New York: A Five-Borough, Ten-Year
Plan, the most extensive affordable housing development plan in the
country.
HPD PRESERVATION FINANCE
HPD’s Preservation financing programs typically combine direct subsidy with tax
exemptions/abatements to help with the acquisition, construction / rehabilitation,
refinancing, and / or operations of buildings to ensure long term financial viability
and affordability. In exchange for HPD’s financing, owners enter into long-term
regulatory agreement.
Loans
• Lien Priority: Senior or subordinate loans per terms of HPD programs
• Source: City Capital / City Council Discretionary Funds (Reso A)
• Repayment Terms: Self-amortizing, partially amortizing, balloon, interest only
• Extension or modification of existing City loans
• HDC subsidy and/or bond financing
Regulatory Agreement
• Executed at closing
• Runs with the property (i.e., unaffected by sale)
• Describes requirements for affordability, including term, mix, rent limits, income
limits, and compliance
SUSTAINABILITY IN PRESERVATION FINANCE
Assessment
• All projects receiving HPD subsidy or tax exemption are required to obtain an
Integrated Physical Needs Assessment (IPNA; combines physical needs
assessment and energy audit)
• IPNA used by HPD, HDC, HCR
Energy Efficient Scopes of Work
• Low-cost energy efficiency and water conservation measures (i.e. LED
lighting, low-flow fixtures, efficient appliances)
• On-Site Renewable Energy: Solar PV and Thermal
• Oil to gas or electricity conversion
• High performance HVAC and/or DHW systems
• Insulation (pipe and roof)
IPNA: Scope and Preliminary Cost Estimates
• Efficiency assessors are urged to include both low-cost/no-cost improvements and deeper energy improvements, as well as identify at least 30% in energy savings
• Buildings with an existing EUI below 50 kBtu/SF/year are exempt from the 30% energy savings goal
Potential
Health
Benefit
Impact
SITE WORK Critical /
Short TermUnit Type Qty
Cost Per
Unit
Total
Cost
Incr. Cost
Per Unit
Total
EEWC Incr.
Cost
Cost Per
Unit
Total
EEWC-Only
Cost
TOTAL
COST SIR
Simple
Payback
Projected
Annual Energy
Savings
(kBTU)
Projected
Annual Cost
Savings
($)
High/
Med/
Low/ NA
-$ -$ -$ -$
-$ -$ -$ -$
-$ -$ -$ -$
-$ -$ -$ -$
-$ -$ -$ -$
-$ -$ -$ -$ Total - Site Work -$ -$ -$ -$ 0 -$
BUILDING ENVELOPECritical /
Short TermUnit Type Qty
Cost Per
Unit
Total
Cost
Incr. Cost
Per Unit
Total
EEWC Incr.
Cost
Cost Per
Unit
Total
EEWC-Only
Cost
TOTAL
COST SIR
Simple
Payback
Projected
Annual Energy
Savings
(kBTU)
Projected
Annual Cost
Savings
($)
High/
Med/
Low/ NA
-$ -$ -$
-$
-$
-$ -$ -$ -$
Total - Building Envelope -$ -$ -$ -$ 0 -$
INTERIOR COMMON SPACECritical /
Short TermUnit Type Qty
Cost Per
Unit
Total
Cost
Incr. Cost
Per Unit
Total
EEWC Incr.
Cost
Cost Per
Unit
Total
EEWC-Only
Cost
TOTAL
COST SIR
Simple
Payback
Projected
Annual Energy
Savings
(kBTU)
Projected
Annual Cost
Savings
($)
High/
Med/
Low/ NA
-$ -$ -$
-$ -$ -$
-$ -$ -$
-$ -$ -$
-$ -$ -$
-$ -$ -$ Total - Interior Common Space -$ -$ -$ -$ 0 -$
Capital EEWC Incremental EEWC-Only / Health EEWC Calculations
SUSTAINABILITY IN PRESERVATION FINANCE
Financing
• Green Housing Preservation Program:
• Small-to-mid-size buildings (3-50 units)
• 0% interest, forgivable financing up to threshold amount dependent on building
size for EEWC
• Low-interest, repayable financing (up to 3%) for rehab work
• Access to pre-development loan and technical assistance services
• All Programs:
• Low-interest financing for EEWC and rehab work
• HPD Sole Lender: Underwrite to 50% of savings based on IPNA projections
• HPD Participation Lender: Underwrite to 20-50% of savings based on IPNA
projections and modeling
• Integrate utility incentives
Evaluation
Benchmarking
• Since 2016, all buildings receiving HPD financing required to benchmark during loan
term
HPD SUSTAINABILITY INITIATIVE: LEVERAGING UTILITY INCENTIVES
Reduce HPD subsidy by working with NYSERDA, National Grid and Con Edison
Challenges Strategies
Determining Incentives Calculator determines which and how much of an
incentive a project qualifies for based on the scope
of work for the project
Most incentives are only available to owners after a
system is installed
Bridge Loan issued to cover items that will only be
reimbursed by the utility companies after work is
complete
Incentives only available for calendar year Worked with Con Edison to earmark incentives for
project construction period
Solar incentives are only available to for-profits Worked with NYSERDA to create an additional
incentive for affordable housing projects
Assessing for solar capacity Partnership with Here Comes Solar (part of Solar
One) to conduct free on-site assessment and
provide TA services (provide guidance to owners
on what to look for in a solar contractor and
manage bidding process)
IPNA includes light solar assessment and
calculator to determine financial cost of solar
project
GREEN HOUSING PRESERVATION PROGRAM (GHPP)
Program and Policy Objectives
• Launched in May 2015, the Program stems from two Mayoral commitments: One
City: Built to Last climate plan and the Housing New York plan
• Reduce barriers to entry for small- to mid-size building owners
• Assist small property owners control operating expenses
• Projects required to reduce energy usage by at least 20%
• All participating lenders must underwrite 50% of savings
• Work with Mayor’s Office of Sustainability on dedicated outreach program to
develop pipeline for GHPP
GHPP CASE STUDY
RB HARMAN HDFC
Location: Brooklyn
# of Units: 18
• 2012: Received $332k HPD loan
for mod rehab + Weatherization
Assistance Program (WAP)
funding for EEWC measures
HPD SCOPE
Asbestos abatement
Masonry work
Door replacement
Window replacement
Roof replacement and insulation (on one
building)
WAP SCOPE
Hot water + boiler pipe insulation
Low-flow fixtures
New boiler +TRVs
CFL lighting
Weatherstripping
• 2014: Construction Complete
GHPP CASE STUDY
PROJECTED VS ACTUAL UTILITY EXPENSES
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2016 2017 2018
Projected Actual
HEATING EXPENSES (ON AVERAGE, 68% DECREASE BETWEEN 2016-2018)
2016 2017 2018
Projected $57,827 $59,562 $61,349
Actual $22,300 $17,202 $17,859
ELECTRICITY EXPENSES (ON AVERAGE, 31% DECREASE BETWEEN 2016-2018)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
2016 2017 2018
Projected Actual
2016 2017 2018
Projected $3,786 $3,900 $4,017
Actual $2,402 $2,363 $3,309
GHPP CASE STUDY
2019:• HPD will lend $1.1M for mod rehab + more EEWC measures• A private lender will lend $434k to cover much needed deferred maintenance (i.e.
bathroom upgrades, floor re-tiling, painting)• 20% energy savings modelled• Building projected to save $6,725 in annual utility expenses
73 Linden 251 Harman Projected Annual Cost Savings
% of Total (Annual Cost Savings)
Capital Items
Roof Replacement + Insulation X $277 4.1%
Masonry re-pointing X
Condensing DHW X X $2,453 36.5%
Bathroom Upgrade X X
EEWC Items
Solar PV X X $2,243 33.4%
Low-flow fixtures X X $24 .35%
Pipe insulation X $22 .33%
Weatherstripping doors X X $241 3.6%
Air sealing in basement X X $1,034 15.38%
Clean and tune boilers X X $431 6.4%
Total $6,725 100%
GHPP CASE STUDY
Underwriting Projected Savings
2019 CPC Standard
Underwriting
Modified Underwriting –Incorporating Savings
INCOME
Total Gross Income $268,518 $268,518
Vacancy Loss (8%) -$21,481 -$21,481
Effective Gross Income $247,037 $247,037
EXPENSES
Water & Sewer $16,900 $16,900
Heat $18,200 $14,370
Gas & Electric $7,800 $2,148
Energy Expenses Subtotal $42,900 $33,419
Per Unit $2,383 $1,856
% of EGI 17.36% 13.5%
Other Expenses $142,768 $142,768
TOTAL ANNUAL PROJECT EXPENSES
$185,688 $176,187
NOI $61,349 $70,850
21% below standards
72% below standards
GHPP CASE STUDY
Mortgage Sizing
Private Loan (Leviticus Fund)
Not UW to Savings
Private Loan (Leviticus Fund)
UW to Savings
NOI $61,349 $70,850
Loan Term 10 years 10 years
Amortization Term 10 years 10 years
Repayment Term Self-amortizing Self-amortizing
Interest Rate 5.75% 5.75%
Max. Loan Amount $404,993 $434,392
DSCR 1.20 1.24
Income to Expense 1.08 1.05
• Reduce HPD subsidy by $30k• Able to leverage more private financing to pay for deferred maintenance HPD is
unable to use funds towards