California
Tax Credit
Allocation
Committee
Update
William Pavão
Executive Director
Lisa Vergolini
Deputy Director
DC Navarrette
Regional Analyst
1
Topics
 Update of 2014 Results and Trends
 New Construction vs. Rehab Trends
 Updated Credit Pricing
 2015 Regulation Changes and Proposals
 Cost Study
2
2014 Results
 Total awards: 80 after Round 2, plus 4-5
more likely from a waiting list
 49% of applicants (84 awards in 2013)
 ~ $91 million in annual federal credit ($89M in
2013)
 ~$101 million in total state credit ($77.7M in
2013)
3
Trend: Applications and Awards
4
2014 Awards and Waiting List cont.
 Average project size: 58 units (62 in 2013) A
 Average TDC: $19.5M ($18.5M in 2013)
 Average federal credit award: $1.1M ($1M in 2013)
 Average public contribution: $5.7M ($5.7M in 2013)
 29.7% of TDC (30.7% in 2013)
5
2014 Project Size
Units
# of
Projects
% of Total
0 – 24
6
7%
25 – 49
29
34%
50 – 74
30
35%
75 – 99
12
14%
100+
8
10%
6
Trend: Federal Credits Per Unit
7
2014 State Credits
 Available: $105.1 million*
 9% projects: $88.3 million
 4% projects: $15.6 million
 Awarded: $115.5 million
 9% projects: $101 million
 4% projects: $14.5 million
 Reaching into 2015: $10.4 million
8
2014 State and 9% Credits
 2014: 30 awards, $101 million in State credit
 No state credit exchange (SCE)
 2013: 23 awards, $63 million
 7 SCE, $18.7 million
 $77.7 million total
 Average per project award
 2014: $3.3 million (24% increase over 2013 $2.7 million)
9
2014 Special Needs Projects with
State Credits
 Nine of 30 State credit awards are Special Needs
housing type projects
 In 2013, only one of 29 were Special Needs
projects
10
2014 Special Needs Projects with
State Credits cont.
 Twelve Special Needs awards total
 Nine requested State credits
 Six DDA/QCT projects also requested State
credits
 Three non-DDA/QCT projects received 130%
federal basis boost along with State credits
11
2014 4% plus State Credits
 21 four percent-plus-State applications
(8 in 2013)
 $15.6 million available for 2014
 8 awards (7 in 2013)
 $14.5 million in State credit ($9 million
in 2013)
12
2014 Native American Apportionment
 Three applicants (Bishop, Hoopa, and Washoe
tribes)
 Two awards
 R1: Bishop Paiute (New Construction, Large Family)
 R2: Trinity River Elder’s Village (New Construction,
Seniors)
 Points scores: 148, 140 respectively
13
2014 Native American Apportionment
 TDC: $11.9M (30 units) and $4.1M (12 units)
 Public funds: NAHASDA ($1.7M and $915K)
 Federal Credit: $885K and $388K
 State Credit: $3.5M (R1 Bishop Paiute Project)
14
New Construction vs. Rehab
Trends: Projects
15
New Construction vs. Rehab
Trends: Credits
16
Resyndications: Projects
17
Resyndications: Federal Credits
18
Credit Pricing
First Round 2014 Letters of Intent (September 2014)
46 projects total - 9% and 4% + State
 $1.10 - $1.17
14 projects (31%)
 $1.05 - $1.09
6 projects (13%)
 $1 - $1.04
8 projects (18%)
 $0.95 - $0.99
11 projects (25%)
 $0.90 - $0.94
5 projects (11%)
 $0.89*
1 project (2%)
*San Jacinto, CA
19
2014 Regulations Changes for 2015
Accessibility Thresholds
 CBC Chapter 11(B) applicable in 2014
 5% with mobility features, 2% with sensory
features
 2015: 10% with mobility features, 4% with
sensory features
 Lease up priority for accessible units to
households who need them
20
2014 Regulations Changes for 2015
Senior Housing Type
 62+ age standard
 50 percent of all units on an accessible
path must be developed to California
Building Code Chapter 11(B) standards
21
2015 Regulation Change Proposals
 Retain 2008 California Building Code, Title
24, Part 6 calibration
 Add Zero Net Energy (ZNE) option for
scoring and threshold
 Permit larger maximum developer fee in
project cost and basis for 4% new
construction projects of 150 units or more
22
Cost Study: The Sample
Projects Description
995 New construction projects awarded tax credits between 1999-2010
and placed in service by February 2012
430
565 projects were excluded because they did not receive a survey
response from the Developer Survey.
400
30 projects were excluded from the final analysis data set due to
missing or incomplete TCAC files or other data issues.
400
Final analysis data set contained 400 projects.
Costs by Construction Start Date
Completed Affordable Housing Projects, New Construction Only: Avg Cost/Unit
$400 K
$313 K
$327 K
$329 K
$334 K
$302 K
$284 K
$300 K
$273 K
$248 K
$227 K
$226 K
2001
2002
$260 K
$200 K
$100 K
$0 K
2003
2004
2005
2006
2007
2008
2009
2010
2011
Year Construction Started
Dollar values converted to real( 2012) dollars using CCCI (California Construction Cost Index).
24
Key Points
 2011: Only two projects
 Constant dollar expression
 2002-2009: + $108K per unit increase
 2002-2005: + $87K per unit increase
25
Costs by Construction Start Date
Completed Affordable Housing Projects, New Construction Only: Avg Cost/Unit
$400 K
$313 K
$327 K
$329 K
$334 K
$302 K
$284 K
$300 K
$273 K
$248 K
$227 K
$226 K
2001
2002
$260 K
$200 K
$100 K
$0 K
2003
2004
2005
2006
2007
2008
2009
2010
2011
Year Construction Started
Dollar values converted to real( 2012) dollars using CCCI (California Construction Cost Index).
26
Average Cost by Other
Characteristics
Avg Cost/Unit vs. Other Project Characteristics
(Normalized to 2001=100)
300
250
200
150
100
50
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Construction Start Year
Avg Cost/Unit
Pct Units w/Podium Parking
Avg SqFt/Unit
Pct Units > 4 Stories
Pct Units w/ReviewReq
Avg. Quality
Avg BR/Unit
27
Key Findings:
1. Local Factors
 Local reviews and sources added costs:
 Community opposition (5 percent)
 Design review changes (6 percent)
 Redevelopment projects (7 percent)
28
2. Parking
 Podium or subterranean parking
(6 percent)
 Relative to surface or other parking
29
3. Developer Factors
 Larger developers may correlate with cost
efficiency
 Developers with licensed general
contractor on staff may correlate with
cost efficiency
 Quality/durability correlate with cost
(15%)
30
Measuring Quality
 Roofing: 10-; 15-; or 20-year warranty
 92% reported 20-year
 Exteriors: Stained plywood; fiber cement
siding; or stucco
 80% reported stucco
31
Quality cont.
 Windows: Aluminum sliders; vinyl, PVC,
or casement; or wood clad casement
 91% reported vinyl, PVC, or casement
 Flooring: vinyl tile; sheet linoleum; or
ceramic tile
 73% reported sheet linoleum
32
Quality cont.
 Bath tubs: fiberglass; enameled steel; or
enameled cast iron
 92% reported fiberglass
 Counter tops: plastic laminate; synthetic
or ceramic tile; stone
 70% reported plastic laminate
33
4. Economies of Scale
 10% increase in unit count correlates
with a 1.7% decrease in per-unit cost
 Example: Taking 60 units to 66 units
could reduce $300,000 units to $295,000
 $18M becomes a $19.5M cost
34
5. Unit Type
 Smaller units cost less
 Example: SRO units cost 31% less than
large family units
 Senior units cost 18% less than large
family units
 Taller (4+ floors) cost 10% more
 $28K more per unit than 1-3 floor bldgs. 35
6. Land Costs
 Land features affect building height,
parking configurations, staging, as well as
acquisition costs
 Podium parking 6% more expensive per unit
than projects without podium parking
 Approximately $17K/unit additional cost
36
37