Title:
Title
Mortgage Revenue Bond Fee Report for Construction of New Multifamily Affordable Housing
End
FileID
File ID: 2019-01826
Location
Location: Citywide
Recommendation:
Recommendation
Receive and file.
Contact: Christine Weichert, Assistant Director, (916) 440-1353, Sacramento Housing and Redevelopment Agency
Body
Presenter: Susan Salley Veazey, Program Manager, (916) 440-1311, Sacramento Housing and Redevelopment Agency
Attachments:
1-Description/Analysis
2-Mortage Revenue Bond Fee Memorandum - Keyser Marston Associates, Inc.
Description/Analysis
Issue Detail: The City Council (Council) approved a revision to the Sacramento Housing and Redevelopment Agency (SHRA) Multifamily Lending and Mortgage Revenue Bond Policies (Lending Policies) on December 3, 2019. During this discussion, and given the critical need for new affordable housing and the high cost to develop housing, the Council raised concerns about fees associated with the construction of new multifamily housing.
In 2017, SHRA staff conducted a review of the major public-sector Mortgage Revenue Bond (MRB) issuers in the State of California. Based on that analysis, SHRA recommended a reduction in the Bond Issuance Annual Administration Fee that had been in place since 2009. The reduction included reducing the rate from 15 basis points (.15%) to 12.5 basis points (.125%) and introducing a cap of $25,000 per year for bond projects. As an example, the Annual Administration Fee for Lavender Courtyard was lowered by $27,500 as a result of this fee reduction.
As part of the discussion regarding approval of the Lending Policies, SHRA committed to reporting back with additional information regarding MRB Annual Administration Fees for new construction projects. In preparation, SHRA contracted with Keyser Marston Associates, advisors in public/private real estate development. The result of their research is provided as Attachment 2 to this report.
According to the Keyser M...
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