Seniors Housing Business

FEB-MAR 2017

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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36 www.seniorshousingbusiness.com Seniors Housing Business n February/March 2017 Partnership With Us National Seniors Housing Group 800 858 5904 nshg@colliers.com Colliers National Seniors Housing Group We know how to align our clients' real estate decisions with their core business goals, customer needs and government regulations. Seize the opportunity. Collaborate with a team that is experienced, qualified, and knows the differences between a seniors housing asset and traditional commercial space. even if they are healthy enough to drive it." Housing officials hold the key Although the LIHTC program distributes federal tax credits, the program is largely administered at the state level, according to ChangeLab Solutions, a nonprofit organization that provides legal information on matters relating to public health. States have broad discretion in how they shape the program and distribute tax credits to projects based on local needs and priorities. More specifically, states develop qualified allocation plans (QAPs), published documents that out- line their eligibility requirements for LIHTC tax credits. QAPs include a scoring system, and pro- posed development projects earn points based on how many of the QAP's itemized criteria they sat- isfy. Tax credits are subsequently awarded to projects that score the most points, explains ChangeLab Solutions. Many adaptive reuse projects involving former school buildings often earn extra points in the QAP process because they tend to be located in highly desirable areas. "It makes so much more sense to have affordable housing located near transit and services," says Fitzgerald. "Policy makers are much more aware of this impor- tance now, and state QAPs and other funding sources prioritize investing in affordable housing that has transit access and is in, or near, communities and services." Spring Garden scored quite well in the Pennsylvania Hous- ing Finance Agency's tax credit competition, gaining points for its location and other factors. "It was a seniors and special needs project in a hard-to-develop, low-income area," says Cruz. Local officials are invested Municipal and housing officials are also motivated to make these adaptive reuse projects work because the alternative of letting a building continue to stand vacant can have a corrosive effect on the value of properties nearby. "Local governments have a lot of interest in figuring out what to do with these old schools," says Woda. Demolition is often the least attractive option, even if old school buildings are not protected landmarks with defenders in the community. These buildings are so solidly constructed — all masonry and thick concrete — that demoli- tion is generally considered to be cost-prohibitive. "It would have cost millions just to tear it down," says Cleghorn of HELP USA. Politicians and community lead- ers typically want to help save old schools because they believe it's the right thing to do and they get credit for saving a cherished landmark. Cities and towns often bolster redevelopment plans with grants and soft financing. Spring Garden, for example, received a 10-year tax abatement from the City of Philadelphia. "When you take an iconic build- ing and revitalize it, you see neigh- borhoods really come together. Cities can really back these proj- ects," says J.J. Amos, vice presi- dent of national field operations for Enterprise Community Asset Management, whose portfolio of affordable housing proper- ties includes several redeveloped schools. Most importantly, redevelop- ment projects involving landmark school buildings are eligible for federal historical rehabilitation tax credits that can bring millions of dollars of equity to a project. Many states also have their own historic rehab tax credit programs that augment the federal program, and these rehabilitation projects are much more common in states that offer that subsidy. The extra financing is especially important to cover the extra cost that comes with historic rehabilita- tion. Many projects cost in excess of $300,000 per unit in total devel- opment costs. Tailor-made transformation Old school buildings typically feature floor plans that are rela- tively easy to convert to housing. Classrooms are often 600 to 1,000 square feet in size, about right for a one- or two-bedroom apartment. Large windows can make for attractive living spaces. Even the hallways are the right size. "The wide hallways and com- mon spaces of schools can be well- suited to the mobility needs of seniors," says Fitzgerald. By comparison, other types of historic buildings may require The Woda Group redeveloped this former school in Washington Court House, Ohio, a rural suburb midway between Columbus and Cincinnati. The property now offers affordable seniors housing.

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