To illustrate the unique and often complex process of developing affordable housing, this section provides a brief summary of a multifamily rental development constructed in the City of Moab. Cinema Court, a 60-unit apartment complex, provides housing for very low- and low-income households. Readers should note that this summary is provided by way of example only, and may not characterize the barriers and other conditions facing another project in the Moab Area. Note the number of income sources required to facilitate the Development, and the substantial contribution of financing provided through the low income housing tax credit (LIHTC) awarded by the Utah Housing Corporation and funded by American Express, a global corporation with a charter in Utah. Without the LIHTC, Cinema Court would not have come to fruition. Since the 2012 project, the Moab Area has not seen another LIHTC development. It may take another LIHTC award to fund affordable housing developments as large as Cinema Court or a more complex financing structure that includes additional partners to make any proposal a reality in Grand County. Cooperation, compromise, and trust among partners is an essential ingredient for any project to succeed.
NEED FOR PROJECT
The 2009 Grand County and City of Moab Housing Study and Affordable Housing Plan projected a 2012 total rental deficit of 224 units. While no specific data was analyzed in the year 2012 to determine the actual rental deficit at that time, the projected deficit was likely to be at least as high by the time Cinema Court was completed.
Site and Development Description
HASU endeavored to meet a portion of the rental housing need with the construction of Cinema Court, a new development including 60 multifamily rental housing units built during the summer of 2012. Cinema Court was built on a five acre parcel of land near a variety of amenities including a creek, bike and pedestrian pathways, hiking trails, shopping, and entertainment. Because a significant percentage of the parcel was deemed unbuildable due to the presence of a floodplain, the property was acquired at a favorable price but limited building footprints. Comprised of nine two-story apartment-style residential buildings, one leasing office/clubhouse, and one playground, the Development caters to varying household sizes, from single-person households to families with more than four individuals. Unit amenities include dishwashers, garbage disposals, clothes washers and dryers in each unit, two bathrooms in the two and three bedroom units and comfortable floor-plans. Three of the units are fully accessible; five are set aside for transitional housing for the homeless or near homeless residents and five are designated for those with mental illness.
Unit size, Number, and Income Targeting
The unit mix and target population was determined by a combination of the housing need and operating budget cash flow.
Predevelopment activity began in 2009 and ended with the successful completion of all financial arrangements in fall 2010. Construction began spring 2011 and ended in July 2012.
Since its completion, Cinema Court has remained virtually 100% occupied. At times, there are short gaps between tenants due to the specific eligibility requirements associated with individual units. After a 15-year federal compliance period, American Express will transfer ownership to HASU for the remainder of the project lifetime. Cinema Court has, to date, epitomized a successful affordable housing development.
Through a competitive bidding process, the construction budget was created.
Five different income sources were combined to pay the total development cost. Note that due to low rent levels, project cash flow supported a permanent loan of only $850,000. Local match, grant funds, and investor equity in the form of LIHTCs were used to “fill the gap” between the $850,000 dollar permanent loan and the total $8,718,673 development cost.