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Home My WebLink AboutCOM 0302.001 2022-2024 i ......y Phone: 808 323-4277 Michelle 114: Galirnba o � ) ( ) Council District 6 �- - t'` 430-4927 ,. � �- � Cell: 808) Portion N. S. KonalKa`u Nolcano * Fax: (808) 329-4786 Email: Michelle,Galimba@hawaiicounty.gov i I HAWAII COUNTY COUNCIL County of Hawai`i West Hcmai`i Civic Center, Bldg. A 74-5044 Ane Keohokalole Hwy, .t; Kailua-Kona, Hawai`i 96740 4 DATE: June 2, 2023 w TO: Heather Kimball, Chair And Members of the Hawaii County Council FROM: Michelle Galimba, Council Member �ur Council District 6 SUBJECT: Communication No.302 -Presentation on affordable rental housing Attached is a copy of the PowerPoint presentation that Mr. Mohannad M. Mohanna, President High-ridge Costa Development, will be presenting at the CRCOC meeting on June 6, 2023. Please distribute copies for the presentation and discussion regarding Communication No. 302 Thank you MMGldkl Comm. Nom Hawaii County Is an Equal Opportunity Provider And Employer ate 4 HIGHRIDGE COSTA CHbNuIN � 11 'iES LOW INCOME HOUSING TAX CREDITS (LIHTC) IN HAWAII "w. Mid,r M4 in a w tj v� A. ._,� ■■ � � .� iii"1� � `� �� .fir •tl V:' ! .. _ �� R7 �i�� 1 77FW i m TW. ■o w _ II��dldi6 j� a a tau *,� s„. .r”` _ter" .•�� _ - i Vn', - �- .r�r...i k 1II(��HILI[)G1: COSTA Pioneer Plaza —Suite 1140,900 Fort Street Mall, Honolulu, Hawai'i 96813 (424)258-2906 1 moe.mohanna@hcosta.com Recognized as one of the nation's leading developers of affordable housing communities -;*Proven expertise in affordable housing tax credit syndication and asset management 4 . Balanced mix of Family and Senior Housing HIGHRIDGLFinancing expertise, both conventional and tax-exempt Strong relationships with Cities, States, Lenders, and COSTA Corporate Investors Investors — RBC, AEGON, US Bank, FNMA, Bank of America, CN A N G I N G I V E S AMBAC, Union Bank, JP Morgan, Citibank Lenders — Union Bank, Bank of America, Citibank, FNMA, Wells Fargo, California Bank and Trust, PNC, Freddie Mac, Comerica, ATAX, ALIGN, East West Bank Mission Statement — "CHANGING LIVES FOR GENERATIONS OF KAMNAI NA" To apply a long-term business approach to enhancing the lives of lower income family and senior households through the development, preservation, ownership, and operation of affordable housing. Geographic Range & L_npL rctis : L / HIGHRIDGE COSTA OFFICES 900 Fort Street Mall Honolulu,HI 330 West Victoria St.Gardena,CA HIGHRIDGE COSTA HAWAII COMMUNITIES �� am Aftomp s '". HALE MAHAOLU KE KAHUA Waiehu, HI HALE MOENA 120 Units I Family I, II 1% Kapolei, HI 297 Units I Senior/Family —•, ___________ ________ r KOKUA HALE Honolulu, HI LI LOA HALE 224 Units Senior PAHOA RIDGE Kfhei, HI KEAWALAU I, II, III Honolulu, HI 117 Units I Senior Waipahu, HI 211 Units I Workforce 537 Units I Senior/Family r1 l POHUKAINA I, II Total Family: 1,205 Units Honolulu, HI Total Senior: 738 Units KAHOAPILI 632 Units I Workforce/Family PARKER RANCH I, II, III Total Workforce: 645 Units Salt Lake, HI Waimea, HI Total Units: 2,588 Units 190 Units I Family 260 Units I Senior/Family LIHTC HISTORY & OVERVIEW • The Low-Income Housing Tax Credit (LIHTC) program was established by Congress as part of the Tax Reform Act of 1986 and made permanent in 1990. • The LIHTC gives investors a dollar-for-dollar reduction in federal tax liability in exchange for providing financing to develop income-restricted affordable housing. • Financed projects must meet affordability requirements for at 30 years after project completion, or more, as determined by state regulations. • State housing agencies such as Hawaii Housing Finance and Development Corporation (HHFDC) award tax credits to developers through a competitive application process. • The LIHTC program operates under a two-tier credit structure: a 9% credit and a 4% credit THE 4% AND 9% CREDIT 4% 9% • Projects receive tax credits totaling 40% of eligible • Projects receive tax credits totaling 90% of eligible costs. costs. • No cap on allocable credits, however limited by • Highly competitive and limited amounts to allocate. available tax-exempt bonds. • Combined with conventional financing. • Combined with other financing tools, such as tax- exempt bonds, County funds, RHRF, or additional • $3,957,204 of funding available for Hawaii to allocate subsidies to bridge the funding gap. in 2022. • $335,115,000 of tax-exempt bonds allocated to • Can be combined with other financing tools, such as Hawaii in 2022. tax-exempt bonds, County funds, RHRF, or additional subsidies to bridge the funding gap. 4% CREDIT SOURCES EXAMPLE 117-Unit Three-Story Senior Project Construction Sources Permanent Sources CONSTRUCTION LOAN $37,686,520 COSTS PAID AT PERM TAX CREDIT EQUITY (LIMITED PARTNER) $39,031,957 CLOSING 3,618,333 PERMANENT FINANCING 5,767,741 EQUITY 11,710,184 DEVELOPER NOTE 585,339 COUNTY FUNDS 5,800,000 RHRF LOAN 23,930,000 RHRF LOAN 16,300,000 COUNTY FUNDS 5,800,000 TOTAL SOURCES $75,115,037 TOTAL SOURCES $75,115,037 9% CREDIT SOURCES EXAMPLE 24-Unit Two-Story Family Project Construction Sources Permanent Sources CONSTRUCTION LOAN $11,929,000 TAX CREDIT EQUITY (LIMITED PARTNER) 13,103,054 COSTS PAID AT PERM CLOSING 811,750 PERMANENT FINANCING 240,000 EQUITY 707,457 DEVELOPER NOTE 5,153 DHHL FUNDS 31,793 RHRF LOAN 2,628,000 RHRF LOAN 2,528,000 DHHL FUNDS 31,793 TOTAL SOURCES $16,008,000 TOTAL SOURCES $16,008,000 • Operates under the Department of Business, Economic Development, and Tourism (DBEDT) in the state of Hawaii. Finance Primary goal is to address the housing needs of low- ' Housingwaii and moderate-income individuals and families in Development Hawaii by providing affordable housing options. Corporation Administers various housing programs and initiatives, including Low-Income Housing Tax Credits, Rental Housing Revolving Fund, Hula Mae Multi-Family Bonds, and the Dwelling Unit Revolving Fund. • Responsible for ensuring that affordable housing projects meet certain criteria, such as income limits, rental restrictions, and affordability periods. HHFDC AWARD DATA Tota Rental Housing Affordable Private Activity RHRF Infusions Applications for Private Activity Revovling Fund Projects Units Bond Allocation (Legislatively Funding Year Financing Affordable Units Bond$Requested RequestedAvg Cost Per Unit Avg Cost Sq/Ft Awarded Awarded Available PAB Awarded funded) RHRF Awarded 2019 19 2,158 $ 317,305,505 $ 233,600,806 $ 399,965 $ 545.56 12 1,377 $ 149,812,726 $ 286,432,271 $ - $212,544,681 2020 12 843 $ 74,748,964 $ 37,000,000 $ 476,660 $ 534.46 8 688 $ 184,763,205 $ 68,801,450 $ 50,000,000 $ - 2021 28 2,724 $ 554,796,644 $ 351,683,041 $ 459,928 $ 541.63 9 951 $ 300,815,372 $ 234,755,000 $ 50,000,000 $ 159,968,738 2022 28 3,052 $ 741,300,713 $ 355,979,433 $ 519,359 $ 687.39 11 1,397 $ 201,243,046 $ 332,061,150 $ $178,096,793 2022 RHRF Tier 2 11 1,416 N/A" $ 330,564,994 $ 575,592 $ 697.55 4 755 N/A' $ 150,000,000 $ 142,367,752 2023 31 3,562 $ 868,347,948 $ 450,990,196 $ 569,664 $ 684.78 T80 $ 150,000,000 2024 10010001000" 2015 1 1 $I80,000,000" 'RHRF Tier 2 M UNTC Or PAS OVa WIC •+023 Ne3m;pending oavemor signature Housing Finance Manager, Hawaii Housing Finance & Development Corporation (H H FDC) D: (808) 587-0574 E: david .t.oi@hawaii.gov AIL tHIGH:Wtill CHANGING LIVES FOR GENERATIONS OF KAMA`AINA RIDGE STA IIIIS