Agency Requirements
We are familiar with the requirements of the agency to which this document will be submitted. Typically, the agencies include the New York State Division of Housing and Community Renewal (DHCR), Rural Development (RD) or HUD. GAR Associates reviews the requirements of these various agencies on a consistent basis, and we attempt to meet with representatives of each agency in order to obtain an update pertaining to any changes in their underwriting criteria. While we do feel that we understand their goals and guidelines, in no way do the results of our analysis guarantee funding or approval from the agency in question. Even if the capture rates and the demand analysis prepared by GAR Associates is indicative of likely project support, there could be other issues or items that preclude the project from receiving such funding as approval and funding for housing developments of this nature as a highly competitive and complicated process.
Demand Analysis
Our demand model typically accounts for what we call a net demand analysis wherein all existing affordable housing is eliminated from the model prior to establishing capture. In order to do this, it is usually necessary to undertake a two-staged income qualification process. This is necessary in order to properly account for all income qualified households who may be likely candidates for a deep subsidy affordable project (where income qualifications as low as zero can occasionally be utilized), and then subsequently for application to the income band specifically applicable to the project in question.
Other variables that are important to recognize include:
· If this report is being prepared for submission to DHCR for tax credit approval and underwriting, we will utilize their income bands as a guideline. DHCR’s underwriters analyze projects based on an affordability range from 30% (establishes the upper-end maximum) to 48% (establishes low-end minimum affordability requirements), of the gross rent, which is intended. The results of this analysis may differ from tax credit compliance standards, but it will be presented as at least one of the methodologies for tax credit submission.
· It should be noted that we understand that the income bands apply to State Tax Credit as well as Low-Income Housing Tax Credit projects.
· If this is a deep subsidy analysis where project-based assistance, a HAP contract or other types of subsidy are being provided, then we will income qualify those units based on a range extending from zero to the maximum allowable levels (Federal Guidelines at 50% AMI levels).
· The demand analysis will break out household contribution by unit type and appropriate household size. The analysis can account for this type of breakdown based on utilization of the HISTA data previously discussed.
· If this is a senior specific project, the demand analysis will account for all income qualified households aged 55 and above for DHCR compliance. The variables may differ if we are analyzing the development from a market rate perspective, for tax credit purchaser/syndicators, or if a HUD analysis is being applied. When we are analyzing developments with Project Based Section 8 or HUD Funding, the Federal Standards will apply and we would use age 62 and above for senior specific developments.
· In regards to age qualification for family projects, we will account for all renter households up to the age of 62. Contribution of senior households will be considered on a case-by-case basis, but may apply only to the one-bedroom apartments for DHCR demand model.
· In regards to senior specific developments we will account for a contribution from existing renter and income qualified homeowners. However if this is a tax credit specific project for submission to DHCR, we will use the DHCR requirements of a 10% homeowner contribution. If it has been agreed that a separate analysis is necessary for tax credit consideration or the developer’s review, we will provide an alternative demand model.