Agenda - Council - 06/28/2016 - Laserfiche WebLink

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federal rules pertaining to taxes and program restrictions, and find key equity investors that will bridge the gap between total development costs and what the first and any secondary or tertiary lenders will lend against the project. Not surprisingly, beo8uae0fthedivenahv0ft8SkSth8tneedt0bevveUnn8D8ged,e8oh of which carries its own potential challenges, obstacles, and risks, developers (both for - profit 8ndn0npn0fi#expeo18o0nnpe1itiveredurn0ntheirinveStnnent.Tb8ohievethiS,they must develop on budget and on schedule. For example, if the developer miscalculates or underestimates regulatory, political, or environmental hurdles, the result is time and money lost. When this occurs the viability and feasibility ofthe project auffer,andiftheinnpaotiatoo great, the developer may be forced to turn to another project, possibly in another community Differences between market -rate and affordable housing development Onthe surface, there ialittle difference between "market -rate" and "subsidized" development, as all projects involving construction or rehabilitation involve capital, workforce, guarantees, insurance, and local acceptance and approval. Beneath the surface, however, developers ofaffordable housing often need tobemore creative, persistent, budget-oonaoioua.and relation ahip-foouaed.For example, when compared with market -rate development, affordable projects: * Typically require more financing sources (nonprofit or capital -poor private firms typically must rely on multiple finance sources, including government and private debt, deferred loans, intermediary financing, bridge |08nS, grants, etc.). * May face more local political orcommunity opposition than market -rate projects (costing time and nn0nov). * May have limitations on return imposed by one or more funders or lenders. * May be subject to conflicting public policy objectives and compliance requirements. * Are subject to strict rent limits that affect cash f|ovv, reaervea, debt service oapaoity, and profit. * May trigger mandated capital needs assessments or environmental or feasibility studies. * Incur higher costs in developing master servicing agreements, negotiating aubordinationa, scheduling multi -party inspections, etal. * Require more financial sophistication and specialized industries and niches such as low- income housing tax credit syndicators. HOUSING POLICY PLAN ONE� Hgwsinq formGrowing, mmrivinggeqion