HDC completes Washington State Affordable Housing Portfolio Study, presents findings
Portland, OR – April 27, 2015 – (RealEstateRama) — Earlier we reported on work by Housing Development Center’s Asset Management Services team to help Washington State Department of Commerce and Washington State Housing Finance Commission plan for the future capital needs of Washington’s affordable housing portfolio. HDC has since completed a study of the portfolio’s capital needs, and funding strategies available to meet those needs, which we presented to the Washington State Housing Finance Commission, on March 26, and is available for download below.
Study background: HDC partnered with Walsh Construction to develop and implement a model for estimating the capital needs of Washington’s affordable housing portfolio; this process involved reviewing more than 100 CNA studies, collecting surveys from borrowers and using cost estimates from Walsh Construction. With this information HDC estimated the physical condition of 650 properties that were in service for more than 10 years and were funded with Low Income Housing Tax Credits and with the Washington State Housing Trust Fund. Using WBARs financial data from Washington’s electronic property reporting system, HDC estimated the ability of projects to self-fund needed repairs over the next five years, as well as new dollars needed to sustain the properties, which provide affordable homes for roughly 38,000 low-income families and individuals across the state of Washington.
Study findings: In brief, HDC’s study found that Washington will need about $201 million in gap dollars to sustain its affordable housing portfolio over the next five years, with only 4% of the properties in the study universe having adequate replacement reserves to cover costs. Not surprisingly, age of property was the strongest correlation to capital needs, and for each additional bedroom, the average capital needs per unit increased 34%. In addition to estimating the capital needs of the properties studied and the financial capacity of owners to meet those needs, the report addresses strategies for funding the estimated resource gap and preserving the state’s investments in affordable housing. Download PDFs of the report here and the finance commission presentation here.
