Louisville Housing Authority Agenda and Packet 2011 07 26

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The two documents, the report and housing portfolio analysis were presented to staff. Housing Portfolio analysis: Comprehensive data that looks at all the properties. Page 1. Categorized properties: Affordable multi family properties, those that are not tax credits or public housing. Page 3, the objectives of what they understand we are trying to do, identify financial approaches that might be beneficial; including assessed properties that should be sold or included in new development using low income housing tax credits. Page 4, going back over 3 years of financial statements and all of the work papers used for the audits. Louisville Housing Authority report Conclusions and recommendations. Property. Summaries Tab, Steve Clark believes we over stated the interest in the tax credit projects. Generally our conclusions are that you have a relatively small operating set of properties, relative to other housing authorities. It appears you are meeting your mission and doing a good job with how these are operating. The Lilac Place and Regal Court properties have a lot of debt relative to the size of their units. These are the struggling units. Most housing, as long as it is updated, repaired or replaced, has a long life. It's rare to see debt paid off. The reality is you can't keep rents as low if you are playing 20 -15 year debt, rather than 30 year. There is not a lot of deferred maintenance; they have been kept in good shape. Regal Square is the profitable unit. $623,000 due from other funds within the agency to that property. You must guide yourself through the HUD rule as to where you can take that Section 8 earnings and redeploy them to other places. Regal Square is equity that could be utilized to include in another project. Hillside property is public housing. Many housing authorities are disposing of their public housing, particularly small number of units. They have been able to redeploy their assets, combined them for tax credits, and used the voucher income to get some badly needed rehab dollars. East Street does seem to have a high rate of interest. We did not read the note or deed of trust. It's a tough situation with US Bank. The Lydia Morgan property is a year away from the tax credit compliance period. Begin planning, evaluate legal documents, and see what the exit is (2016). You are crossing the tenure period. The credits will be basically earned. There may be value in getting the tax credit investor out. How you redeploy that asset, recapitalize Regal Square or Lydia Morgan, are the strategic questions you have before you. There is no huge overhang of unfunded maintenance or capital investment. There is opportunity. That is a step that he would recommend. Sherry said we are fortunate in that the city boundaries are not very big and nothing can be very far apart. We have been rated the number one city in the United States. Our property values have