Housing Credit, Loans Fund Project for Retired Farm Workers

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     Communities, LLC (UHC). Half of its 80 apartments are targeted to retired low-incThe Southern California desert city of Indio has seen its first new
affordable housing development in more than a decade, thanks in part to
the low-income housing tax credit.
   The new project, called Horizons at Indio, was developed by Santa Ana, CA-based United Housingome farm workers, who spent their lives picking crops or working other agricultural jobs throughout the Coachella Valley.
   The development’s total cost of $18.7 million was financed by housing tax credit equity, tax-exempt bond proceeds, a state-funded farm workers housing program loan, and other sources.
   Opened in June 2008 and now 85% occupied, Horizons at Indio is restricted entirely for rental to seniors (55 or older) earning from 40% to 60% of area median income (AMI). Monthly rents range from $463 to $713 for the 47 one-bedroom apartments and from $553 to $852 for the 33 two-bedroom apartments.
   Thirty one units are set aside for tenants earning no more than 40% percent of AMI ($18,640 for one person, $21,320 for two); eight units for tenants at or below 50% of AMI ($23,300 for one person, $26,650 for two); and 40 units for tenants at or below 60% of AMI ($27,960 for one person, $31,980 for two). One apartment is a manager’s unit.
   The remaining units are expected to be leased by the facility’s grand opening event in October.

Need for Housing

   “United Housing Communities was attracted by Indio’s need for affordable senior housing that was safe, clean, supportive, attractive, and well-located,” UHC spokesperson Merilee Langdon told the Tax Credit Advisor. The company bills itself as a “mission driven for-profit” affordable housing development partner of Morgan Stanley that operates in California and Hawaii.
   When Horizons at Indio opened, UHC’s market studies identified the need for at least 172 units of affordable housing for retired, low-income farm workers at 60% of AMI, and 171 units for farm workers earning between 40% and 50% of AMI. It also forecast the number of households in the market area to increase by 4% this year and by 22% by 2012.
   “The farm worker population needs affordable housing because the cost of housing in California is high in relation to their wages,” Langdon said.
   The city of Indio (pop. 80,000) is located in Riverside County, about 127 miles east of Los Angeles and 26 miles east of Palm Springs.
   Indio Mayor Lupe Ramos Watson said Horizons at Indio is not only the first new affordable housing development in the city in recent memory, but also the only such apartment complex with s pecial areas in the units that enable the senior residents to have their caretakers live with them.
   Like other California cities, Indio faces a challenge in attracting and developing affordable housing for its residents, including the large farm worker population that makes up the region’s labor pool, Watson noted. Farm workers maintain fields, harvest crops, pack and sort goods, and perform other tasks.
   “To be able to provide a (housing) product that is affordable, is just a plus for the community,” she said.

Amenities, Services

    Affordability is just one reason why the new development is welcomed by seniors. The 7.78 acre property also includes a 2,100-square-foot community center, computer lab, swimming pool and spa, and 135 parking spaces.
   Green design features include solar panels and a radiant barrier on the community room roof, specialized glass windows, carpeting, and Energy Star appliances.
   Mark Irving, UHC director of land planning and entitlement, said the green features had minimal effective costs but should reduce the property’s ongoing operating expenses.
   The project’s residents have access to a host of low- or no-cost services coordinated by Heritage Community Housing, Inc., UHC’s nonprofit partner. These include quarterly health screenings, twice-weekly prescription deliveries, income tax and immigration services, GED and ESL courses, and employment counseling.

Funding Sources

   The $18.7 million project utilized multiple funding sources. A chief component was $4.9 million in equity generated by the syndication of low-income housing tax credits by Capmark. The credits were allocated by the California Tax Credit Allocation Committee.
   In addition, the project has a $3.3 million permanent mortgage that was funded by the proceeds of tax-exempt bonds issued by the California Statewide Communities Development Authority.
   Another key piece was a $3 million balloon loan (3%, 55 years) from the California Department of Housing and Community Development under its Joe Serna, Jr, Farmworker Housing Grant Program, said program manager Ben Dudek. He noted the Department can extend the loan for another 10 years, if necessary.
   The program offers funding, through a competitive application process, which can be used to help finance owner-occupied or rental housing for agricultural workers. Eligible fund uses include land acquisition, site development, construction, rehabilitation, and design services.
   The Indio Redevelopment Agency made a $3.2 million loan to the project from its Low and Moderate Income Housing Fund, and the Riverside County Economic Development Agency made a $1.4 million loan capitalized by federal HOME Investment Partnership Program dollars. Each of the loans is at 1% for 55 years.
   Finally, the project received $316,000 from the Federal Home Loan Bank of San Francisco through its Affordable Housing Program.
   Dave Bigley, UHC chief financial officer, said that the project was originally going to receive California state housing tax credits, but that an issue arose in the courts about whether state tax credits trigger payment of prevailing wages. As a result, UHC removed the state tax credits from the project and made up the substantial funding gap through a “deferral of developer fees and an additional non-tax credit equity contribution,” Bigley said. Stephen K. Cooper