miami Lloyd Boggio, CEO of The Carlisle Development Group, is coming off his greatest year as an affordable housing developer.
In 2005, Carlisle had 15 affordable housing projects under development that won an aggregate total of $125.4 million in low-income housing tax credits from the Florida Housing Finance Corp. (one of the projects had a 2005 forward allocation in 2004). That’s a record for the company. Typically, the development firm only wins a third of that many tax credits. The winning projects comprise 1,432 units of housing.
In general, the tax credits sold for $1.03 to $1.07 per dollar of tax credit.
“That year, we were very fortunate,” said Boggio. “We had quite a number of our sites aligned with Florida Housing targets.”
For example, seven of the transactions that won tax credits were located in the hurricane-impacted areas of the state. The outpouring of state and local government funds for hurricane recovery helped make these projects feasible and competitive, said Boggio.
But he may be facing his toughest challenge yet in the eight years since he founded Carlisle, which has developed 30 affordable housing projects totaling 6,000 units.
In each of the past two years, land and construction costs in the state have been increasing 10% to 20%. At the same time, affordable housing and conventional financing have been either flat or increasing only marginally, said Boggio (see Affordable Housing Finance, June 2005, page 35). “Fewer and fewer deals work. There are fewer applications at the state level and fewer units are being built.”
Another problem in a high-growth state like Florida is that there continues to be less land available for multifamily use. The sites are “not just more expensive, they’re fewer in number,” he said.
That means de-velopers have to build taller, high-density buildings, which exacerbates construction costs, he added.
These extreme costs have weakened Florida Housing’s tax-exempt bond program to the point where Carlisle doesn’t plan to submit any project applications this year. “It takes too much subsidy,” he said. “We’re focused on 9% tax credit deals.”
However, if Florida Housing will couple the tax-exempt bond program with a significant amount of subsidy, similar to last year’s Rental Recovery Loan Program, then Boggio said he would reconsider.
Boggio noted that a third of the developers in the state have stopped building affordable housing. “The rest of us are looking at the possibility of doing fewer affordable housing [projects], or at least looking at other kinds of development,” he said.
He is looking at several workforce housing opportunities, which are targeted at people who exceed affordable housing limitations but are also unable to afford market-rate housing.
There is one glimmer of hope: More government leaders here are recognizing the affordable housing crisis. “I see it everywhere in newspapers and in action on every level from the governor and local governments. … Their resolutions, studies and inquiries are all acknowledging affordable housing and growth needs, and they are trying to find a solution,” said Boggio, a member of Gov. Jeb Bush’s Affordable Housing Study Group.
“We need to press federal and state levels for greater resources while taking a more skeptical look at which transactions will work in the future,” he added.
Carlisle has 19 affordable housing projects in the 2006-2008 pipeline, totaling 2,275 units. They are expected to use financing from many sources, including 9% and 4% tax credits, historic tax credits and multiple subsidy programs. Three of the projects, comprising 536 units, are slated to be completed this year.n
miami The Miami-Dade Transit Authority asked a partnership that included The Carlisle Development Group to help increase MetroRail ridership and boost the economic base of the city.
At press time,Carlisle was completing the second phase of the affordable housing component, Santa Clara Apartments, near the Santa Clara Station and the city’s Civic Center. The 204-unit, 17-story highrise was fully preleased, and construction is expected to finish in March.
The project is a success, said Carlisle CEO Lloyd Boggio. The 208-unit, eight-story highrise in the first phase has already helped double ridership on the trains.
The Santa Clara project received a total of $12 million in low-income housing tax credit equity from Related Capital Co. in 2002 and 2003, and received additional subsidies and waivers from the city and county.
All of the units are set aside for families earning no more than 60% of the area median income.
Santa Clara Apartments in Miami.
Apartments boost MetroRail