HomeMy WebLinkAboutIR 24-1818INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 24-1818
� VA
1673
To the Mayor and Members of the City Council
April 2, 2024
Page 1 of 1
SUBJECT: GENERAL OBLIGATION BONDS FOR AFFORDABLE HOUSING
The purpose of this Informal Report (IR) is to explain how peer cities have used municipal general obligation bonds
for the development of affordable housing. General obligation bonds, often called G.O. bonds, provide a way for
local governments to raise money for projects that do not have an existing revenue stream. The bonds are backed
by the "full faith and credit" of the municipality. In Texas, general obligation bonds must be approved by the public
through a bond proposition voted on at a regular election (Texas Government Code Chapter 1331). There is no
prohibition on using G.O. bonds for affordable housing.
Since 2001, as summarized in the attached Table 1, there have been sixteen general obligation bond elections to
develop housing in five large Texas cities: Austin, Dallas, Denton, Houston, and San Antonio. The bond proposals
have had wording as simple as "for affordable housing development" and as explicit as "the purpose of acquiring
land (and interests in land), planning, constructing, renovating, improving, and equipping affordable housing
facilities for low-income and moderate -income persons and families." The funds have been used for grants to
housing developers and community housing development organizations, housing rehabilitation programs,
homelessness/permanent supportive housing initiatives, property acquisition, and rental housing repair. General
obligation bonds have also been used to build infrastructure (water, sewer, streets, sidewalks) for affordable
housing and to provide anti -gentrification funds for programs that prevent residential displacement in low-income
communities. Table 2 summarizes information about housing bond programs in eight other peer cities, including
Albuquerque, Charlotte, Columbus (Ohio), Denver, Durham, Kansas City, Raleigh, and Winston-Salem.
Bond proposals for housing in larger cities have generally been successful. One exception was the 2012 housing
bond in Austin, which was part of a larger bond initiative. After the ballot proposal for housing failed to pass in
2012, the City of Austin determined that the wording on the ballot was too vague and went back to the voters in
2013 with a more specifically worded proposal, which passed.
Austin's Housing Works produced a study in 2022 on the economic impact of the 2013 and 2018 general obligation
bonds for affordable housing. The study found that through 2021, two general bond obligations totaling $138.6
million have enabled developers to leverage an additional $900 million in investement funds to develop 43 housing
projects with a total of 4,372 units, of which 3,707 are affordable to tenants earning 50 percent or less of median
income and owners earning 80 percent or less of median income. The total economic impact of Austin's housing
bonds through 2021 was estimated at more than $1 billion. The ongoing maintenance of these affordable units
produced a further $101 million in annual economic impact (Source: Housing Works & Civic Economics, Economic
Impact of the 2013 and 2018 General Obligation Bonds for Affordable Housing Austin Through 2021). Among the
six largest cities in Texas, none have reported that they had sought or secured pledges of matching funds before
they issued their bonds. Austin has reported, however, that their bonds have leveraged private funds by a 6:1
private/bond ratio and San Antonio has reported a 9:1 leverage ratio, with leverage consisting of private debt, tax
credit equity, philanthropy, and owner's equity.
If you have questions about this information, please contact Christianne Simmons, Director, Fort Worth Lab, at 817-
392-6222, or Victor Turner, Neighborhood Services Director, at 817-392-8187.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
IR General Obligation Bonds for Affordable Housing
Table 1: Texas General Obligation Bond Ballot Propositions for Housing
City
Year
Proposition
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
Amount
Austin
2006
$55M
Unable to locate information
Yes
40% for persons with low wage
. 2,600 affordable rental and homeownership units of
jobs, disabilities, or homeless
which 73% are affordable to households between 30-
25% for first time homeowners
50% MFI (Source: ULI)
35% for low-income seniors,
. Estimate is $22,000/housing unit (Source: Austin
persons with mobility
American Statesman)
impairments, abused/neglected
. GO bonds leveraged $196M and had a $400M
children, and mentally ill
economic impact. (Source City of Austin; Housing
Works
Austin
2012
$78.3M
None
No
N/A
. Polled voters said "not enough information" and "vague
wording" led to lack of votes
The debt service on the
(Source: Austin Chronicle)
bond was expected to be
funded within the current tax
rate, so no property tax
increases were anticipated
as a result of the bond
measure.
Source: City of Austin
Austin
2013
$65M
Yes
Yes
Provided gap financing ranging
. Provided gap funding to 12 affordable housing
from $1 M-3M to private
developments scattered throughout the City
Austin taxpayers will see a
developers leveraging housing
. Created total of 500 affordable housing units
total tax rate increase of
tax credits and other equity
. G.O bonds leveraged $233M
$0.37 per $100 property
sources
(Source: HousingWorks)
valuation once all bonds are
issued. (Source: City of
Austin
Austin
2018
$250M
Yes
Yes
40% land acquisition
. Acquisitions: 60 acres vacant land, three hotels for PSH;
38% rental housing
29 properties to CLT
The 2018 fiscal year O&M
development assistance
. Leveraged $900M in investment funds to create 43
tax rate for the bond is 33.93
11 % owner housing
projects
cents per $100 of taxable
development assistance
. 4,372 Units of which 3707 are affordable to tenants
assessed property
11 % home repair
at/below 50% MFI and owners earning 80% MFI
value.(Source: City of
. $1 B economic impact
Austin)
Sources: Housin Works and City of Austin
Austin
2022
$350M
Yes
Yes
Building new affordable housing
No reports yet available.
Land acquisition
Increase of $0.0132 per
Home Repair
$100 property valuation
once all bonds are issued
(Source: City of Austin)
Page 1
IR General Obligation Bonds for Affordable Housing
City
Year
Proposition
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
Amount
Dallas
2017
$ 20M
None
Yes
100% transitional and
. 5 affordable PSH projects supported
permanent supportive housing
. St. Jude Center Park Center ($3M)
Paying off these bonds will
targeting chronic homeless,
. Acquisition of hotel ($2.3M)
not require a tax -rate
rapid rehousing for elderly,
. Acquisition of referral only shelter (500K)
increase (Source: Dallas
disabled families with children,
. Acquisition of hotel ($5M)
Morning News)
and daycare centers with wrap-
. Acquisition of Hampton Road complex ($6.5M)
around services
Source: City of Dallas
Dallas
2017
$55AM
None
Yes
Proposition I: Economic
. 33 total projects
Development included $6.5M
. Housing bond funds in amount of $6.5M shown as a
Paying off these bonds will
for "Housing bond funds"
project, not yet spent
not require a tax -rate
(Source: City of Dallas)
increase (Source: Dallas
Morning News
Dallas
2024
$61 M
None
Vote
40% infrastructure in ROW for
Bond election on May 4, 2024
There is no recommended
May 4, 2024
affordable housing
increase in the tax rate to
60% for gap financing for
support the bond. (Source:
affordable housing
City of Dallas)
Dallas
2024
$8.5M
None
Vote
100% PSH and homeless
Bond election on May 4, 2024
There is no recommended
May 4, 2024
housing
increase in the tax rate to
support the bond.
Source: City of Dallas
Denton
2023
$15M
Yes
Yes
100% toward affordable
No reports available
The tax rate impact of the
housing; property acquisition,
entire 2023 bond program
grants and low -interest loans,
($309.58M) is estimated to
funding affordable housing
be no more than 0.05764
resources, preserving or
per $100 of valuation
improvements to existing
(Source: City of Denton)
affordable housing facilities
Houston
2001
$20M
Unable to locate information
Yes
Proposition F (Affordable
Unable to locate information
Housing) Cannot find.
Houston
2006
$18M
Unable to locate information
Yes
Proposition F (Housing)
Unable to locate information
Cannot find.
Houston
2012
$15M
Unable to locate information
Yes
For demolition of blighted
Unable to locate information
properties to provide locations
for construction of affordable
housing using federal funds.
Houston
2013
$65M
Unable to locate information
Yes
69% for rental housing
Unable to locate information
5% for permanent supportive
housing
8% for ownership housing
18% for housing repair
Page 2
IR General Obligation Bonds for Affordable Housing
City
Year
Proposition
Amount
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
San Antonio
2017
$20M
None
Yes
In 12 identified Neighborhood
. Provided gap financing for projects in four Council
Improvement areas: purchase
Districts:
No City property tax rate
and prepare sites for private
. 500 affordable apartment units for families
increases (Source: City of
sector development of single-
. 80 PSH units for families
San Antonio)
family or multi -family workforce
. 3 projects complete, one completed December 2025
housing construction. Permitted
expenditures include land
(Source: City of San Antonio)
acquisition, demolition of
dilapidated/unusable structures,
right-of-way improvements,
extension of utilities, and
remediation of environmental
conditions impeding
development.
San Antonio
2022
$150M
None
Yes
30% homeownership
Reports not yet available
rehabilitation and preservation
The bond program is
27% improving rental housing
achievable without a
23% building affordable rental
projected increase in the
17% permanent supportive
City's Ad Valorem Tax Rate.
housing
(Source: City of San
3% building homes to own
Antonio
Page 3
IR General Obligation Bonds for Affordable Housing
Table 2: Other Larqe Citv General Obliqation Bond Ballot Propositions for Housinq
City
Year
Proposition
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
Amount
Albuquerque, NM
2017
$3.788M
No
Yes
Construction and rehabilitation
of high quality, permanently
Approval of projects
affordable housing for low to
contained in the
moderate working families,
2017 G.O. bond
including affordable senior
program will not
rental
require a City
property tax rate
increase.
Albuquerque, NM
2019
$5M
No
Yes
Plan, design, acquire land, and
construct affordable housing
Approval of projects
and homeless facilities
contained in the
2017 G.O. bond
program will not
require a City
property tax rate
increase.
Albuquerque, NM
2021
$3.3M
No
Yes
Plan, design, acquire land and
construct affordable housing
Approval of projects
contained in the
2017 G.O. bond
program will not
require a City
property tax rate
increase.
Charlotte, NC
2020
$50M
No
Yes
Housing bonds fund the city's
Housing Diversity Program to
The financing costs
increase the supply of safe,
for these bonds are
quality and affordable housing
included in the
for low- and moderate -
current city
income residents throughout
budget. No
Charlotte. The Housing
additional property
Diversity Program not only
tax increase will be
addresses the need for new
required to pay for
construction, it also helps
these bonds.
preserve existing housing
(City of Charlotte,
through rehabilitation of both
NC)
single- and multifamily housing
units. This funding leverages
other public, private and
nonprofit dollars to increase
the supply and accessibility of
housing in the community.
Page 4
IR General Obligation Bonds for Affordable Housing
City
Year
Proposition
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
Amount
Charlotte, NC
2022
$50M
No
Funds will go toward the
It is the latest in bond -funded investments in affordable
Housing Trust Fund
housing in Charlotte, which has authorized $180 million in
The financing costs
- New construction of multi-
such spending since 2018. That year, the city created a
for these bonds are
family homes.
fund to encourage investment in affordable housing; over
included in the
- Preserve existing housing
the past five years, Charlotte has added 12,000 affordable
current city
through rehabilitation.
housing units and shelter beds through financing from the
budget. No
- Homeownership in targeted
fund, according to the official statement accompanying the
additional property
neighborhoods.
sale of the bonds. (Source: Munichain News)
tax increase will be
- Housing for seniors, disabled
required to pay for
people, and those
these bonds.
experiencing homelessness.
(City of Charlotte,
NC
Columbus, OH
2O19
$50M
No
Yes
Leveraged $276M in public and private sector support to
create more than 1,300 housing units for individuals
Bonds are repaid
earning less than $49,960 per year or families of four
using a quarter of
making less than $67,050. (Source: Columbia Dispatch)
every income tax
dollar and some of
the utility bills. Since
1956, the City has
never imposed a
property tax to
repay bonds.
Columbus, OH
2O22
$200M
No
Yes
Purpose of promoting
$80 million will be used to supercharge production of new
neighborhood and community
affordable housing units for families earning below 80% of
Bonds are repaid
development and affordable
the area median income
using a quarter of
housing by purchasing,
$50 million will be used to support affordable
every income tax
constructing, demolishing,
homeownership opportunities through the Central Ohio
dollar and some of
renovating, improving,
Community Land Trust
the utility bills. Since
equipping and furnishing
$40 million will be invested to help preserve existing
1956, the City has
residential and commercial
affordability
never imposed a
structures in the City, and
$30 million will be dedicated to permanent supportive
property tax to
acquiring, clearing, testing,
housing and supportive services for individuals earning
repay bonds.
remediating environmental
less than 30% of the area median income
issues, extending utilities, and
otherwise improving residential
and commercial sites in the
City, and providing funds for
grants in connection with the
same in the principal amount
of $200,000,000 to be repaid
annually over a maximum
period of 20 years
Page 5
IR General Obligation Bonds for Affordable Housing
City
Year
Proposition
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
Amount
Denver, CO
2021
$38.6M
No
Yes
Repairs and improvements to
Apart of "RISE Denver" (a $260M G.O. Bond program)
the Denver housing and
Structured within
sheltering system, which may
450 beds: $7.4 million for purchase of the 48th St. Shelter
the existing tax rate
include but are not limited to:
136 beds: $16 million toward the overall project costs to
(6.50 GO Bond mill
Establishing and/or improving
build the Urban Peak youth homelessness shelter
levy)
shelters and facilities to
52 beds: $12.2 million toward the overall reconstruction of
provide services to people
the VOA Family Motel
experiencing homelessness by
purchasing buildings,
converting buildings, and/or
constructing facilities.
Durham, NC
2019
$95M
Yes
Yes
Housing projects for the
Build 1,600 new affordable housing units and preserve
benefit of persons of low
800 affordable rental units
1.38 cents will
income, or moderate income,
Move 1,700 homeless individuals and households into
service the debt for
or low and moderate income,
permanent housing
the $95 million
including construction of
Provide 400 affordable home ownership opportunities for
Affordable Housing
infrastructure improvements
first-time homebuyers
Bond that voters
related thereto and the
passed in 2019
acquisition of land and rights-
Help 3,000 low-income renters and homeowners remain
of -way
in or improve their homes
Kansas City, MO
2022
$50M
Yes
Yes
Affordable housing
Estimated to build 2,000 units of deeply -affordable
rehabilitation, renovations, and
housing.
The bonds would be
construction of houses and
repaid through a
buildings, including blight
modest property tax
removal, to provide affordable
increase. For a
housing for very low- to
household with a
moderate income households
$140,000 home and
a $15,000 car, the
property tax would
average an
additional $8 each
year, rising to an
$160 average
additional payment
in year 20. The
amount is based on
passage of all three
ballot questions.
Raleigh, NC
2020
$80M
Yes
Yes
Community development
Small-scale rental projects Development
programs to provide and
Equitable development around transit
The bond could
rehabilitate multifamily and
King's Ridge
raise Raleigh's
single-family housing for the
Homeless men's facility
property tax rate by
benefit of ersons of low and
Page 6
IR General Obligation Bonds for Affordable Housing
City
Year
Proposition
Amount
Tax Rate Effect
Passed?
Usage of Funds
Outcomes
.78 centers per
moderate income, including,
$100 valuation.
without limitation, (a) the
construction or rehabilitation of
housing or neighborhood
revitalization improvements,
(b) programs to provide loans
and other financial assistance
to such persons and to public
and private providers of
housing and (c) the acquisition
of any related land, rights of
way and equipment,
Winton Salem, NC
2018
$11.7M
Yes
Yes
Acquisition, constructing, and
rehabilitating multifamily
In order to pay for
housing for persons of low and
debt payments on
moderate income and
the 2018 voter
accomplishing the renewal of
approved bonds,
urban residential
the current tax rate
neighborhoods, including the
of 59.74
acquisition of land or rights -of -
cents will be
way in land required
increased by 4
cents to the new
proposed tax rate of
63.74 cents per
$100 of assessed
value.
Page 7