"Affordable Housing"

[bucktalk]

You see/hear the term 'affordable housing' used quite a bit. But it seems that phrase is incredibly vague. Considering the possibility of more apartments/condo's coming online near downtown I wonder if they'll be constructed and promoted as 'affordable housing'. If someone can tighten up the definition for affordable housing, I think it could be helpful.

[Southsider2]

In the commercial real estate industry, "Affordable Housing" refers to Low Income Housing Tax Credit (LIHTC) multifamily properties. These properties receive tax credits at the state or federal level. In turn, they can only charge a capped rental amount based on the agreement with the tax credit provider. The capped rents are income qualified based on a % of the Area Median Income (AMI). The most typical AMI levels are 50% and 60%. These properties are restricted by a 15-year base term and usually features a second 15-30-year extension term. A Land Use Restriction Agreement (LURA) is attached to the land and effectively restricts the use of the site to affordable housing (based on the agreed upon terms.). I'd note that "Affordable Housing" is much different than "Government Subsidized" housing which is typically a known as a Section 8 Property.

[Southsider2]

The Fairground Flats is the most recent LIHTC property I can remember being constructed. I believe those units are restricted at 60% AMI. If memory serves me right, Alley's End will have a wide mix of AMI levels ranging from 30% to 60%. Another nuance is "Workforce Housing" which is typically restricted at 80% AMI.

[oklip955]

Edmond just did a survey on affordable housing. I am not sure what the results of it will be. My guess is people looking for rents lower then the current market ie about $1000 for a 1 bed apt or homes less then $250/$300 K range. My thought is to build smaller homes like what was built in the late 40s/50s. Look around okc or other cities and you will see the 700 to 1200 sq ft homes, 2 or 3 bed 1 to 1 1/2 bath. Maybe even build some 1 bed and 1 bath for empty nest/ older/single people on reasonable sized lots. Maybe even kitchen, living room with a half bath down and 2 beds up. Just a thought. or Maybe 1 bed, kitchen, livinging and bath down and space above for future 1 or 2 bed and a bath that can be finished in a later time. Maybe this could be good for a young couple.

[Teo9969]

In the commercial real estate industry, "Affordable Housing" refers to Low Income Housing Tax Credit (LIHTC) multifamily properties. These properties receive tax credits at the state or federal level. In turn, they can only charge a capped rental amount based on the agreement with the tax credit provider. The capped rents are income qualified based on a % of the Area Median Income (AMI). The most typical AMI levels are 50% and 60%. These properties are restricted by a 15-year base term and usually features a second 15-30-year extension term. A Land Use Restriction Agreement (LURA) is attached to the land and effectively restricts the use of the site to affordable housing (based on the agreed upon terms.). I'd note that "Affordable Housing" is much different than "Government Subsidized" housing which is typically a known as a Section 8 Property.

How is "Area" defined? Household median Income for all of OKC is probably near $65k, but I'd imagine downtown is closer to $90k. How that "area" is defined makes a ton of difference in how actually affordable it is to the area it would theoretically be serving.

[bucktalk]

To clarify -if more apartments come online in downtown OKC, and someone is a waiter/waitress downtown, could their income provide enough to live in 'affordable housing'?

[Rover]

To clarify -if more apartments come online in downtown OKC, and someone is a waiter/waitress downtown, could their income provide enough to live in 'affordable housing'?

In most of the developed city centers they would have to have a roommate or multiple ones. Here, everyone wants to have their own place in premium spots at premium developments for low costs.

[jn1780]

To clarify -if more apartments come online in downtown OKC, and someone is a waiter/waitress downtown, could their income provide enough to live in 'affordable housing'?

Yes, If their Boyfriend/Girlfriend, Husband/Wife, friend is helping to pay the rent and they have a job making more money. If they don't make more money, you probably need a third roommate.

I don't think there are that many places even outside of downtown where someone on a waiter salary can live comfortably by themselves. Unless they like being house broke.

[Southsider2]

How is "Area" defined? Household median Income for all of OKC is probably near $65k, but I'd imagine downtown is closer to $90k. How that "area" is defined makes a ton of difference in how actually affordable it is to the area it would theoretically be serving.

I believe it goes by metro or non-metro so it doesn’t delineate between downtown and a suburb of OKC. At LIHTC properties, tenants almost always pay their own rent unless they have housing vouchers in that case you can sometimes still qualify for a LIHTC unit while the voucher pays your rent.

The math on the rent of the units is AMI x restriction % x 30%. Rent can’t exceed that 30% mark on a gross basis and that’s inclusive of utilities. Often LIHTC properties have a utility allowance. Here are the current OKC restricted rents for 40%, 50% and 60% units.

[Southsider2]

To clarify -if more apartments come online in downtown OKC, and someone is a waiter/waitress downtown, could their income provide enough to live in 'affordable housing'?

The answer is likely yes (assuming the new units are designated % AMI units). However, in my experience I’ve seen first hand an interesting phenomenon in an out of state market where approximately 1/3 of the tenants at a property couldn’t have their leases renewed as the year rolled over because the AMI decreased to a level where they no longer qualified for low income housing in that area. Low income housing significantly eases the burden on the tenant but it’s obviously case by case depending on that persons financial situation.

[Southsider2]

In general, LIHTC properties almost always stay fully occupied with a long waitlist. Demand for units especially in OKC are outpacing supply. There’s is an extensive process regarding the credit allocations and it’s separated between 4% applications and 9% applications. 9% is way more desired thus it’s a hyper competitive process. Due to inflationary issues the last year or two, a ton of credits that had been allocated haven’t gotten off the ground making the supply problem even worse.