Town of Taos Housing Funding and Activation Overview
Town of Taos is implementing Project Moxie to deploy funding for workforce housing, including capital outlay and grants. The manual guides fund deployment, land use code revision, and feasibility studies for housing development. Additional ARPA funds are earmarked for building affordable units, with a focus on Chamisa Verde lots to address the housing affordability gap in Taos.
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Town of Taos Housing Administrative Manual Jenn Lopez, Project Moxie
Why Taos Needs a Housing Manual How it Ties to Funding Agenda Sections of the Manual Possible Next Steps
Hired in January to do the following: Assist with deployment of $2.9 million in Capital Outlay Project Moxie Scope of Work Create a manual/program to guide fund deployment process Support land use code revision, if needed Look at early feasibility around activating Chamisa Verde
Project Moxie has met with Town staff several times since January. Town Capital Outlay and new DFA grant Two specific buckets of funding: $2.9 million capital outlay $1 million DFA/Gov s Office THP facilitated to town These are two distinct funding sources and each have their own complexity. .
This language in 23-H3230 allows for these funds (minus AIPP funds) which is $2,871,000 to plan, design, and construct affordable workforce housing in Taos. These funds have a reversion clause of June 30, 2027 Funds can be used to plan, design, or construct workforce housing. Funds require compliance with anti-donation clause. $2.9 million Best practice: Town procures a partner to build homes, if for-sale, services to prepare buyers and agency to manage resale controls, which have to be decided on by the Town.
Daniel Werwath approached THP to discuss additional funding for Chamisa Verde. THP supported the idea and Daniel facilitated the grant through his role in the Governor s Office working with the Mayor and staff. These are ARPA funds and can only be used for the following: $1 million ARPA fund Grant of Coronavirus State and Local Fiscal Recovery Funds to complete building of infrastructure for 5 housing units that can be sold at less than $300K, which is half the average housing cost in the area; Housing units will include an affordability mechanism that maintains the units as affordable over the next 20 years; phase building of the units will allow for turnaround of funding for ongoing building.
Town should prioritize activation of Chamisa Verde lots as the low lying fruit to develop below market housing. The average gap between what a household in Taos can afford and what is available on the market is 200,000. Chamisa Verde Chamisa Verde lots, with access to some of these funds, could produce homes between $200,000-300,000. In order to activate Chamisa Verde development, the Town will need to RFP lots to builder or builders and will want to have clear goals for home pricing in exchange for lots.
Critical to any Town affordable housing efforts, it is necessary to have an administrative process to deploy public resources and negotiate affordable units through public private partnerships. Housing Manual These processes are complex, and it often takes years for communities to both develop the system and the capacity to administer these programs (Taos started this back in 2010 for Chamisa Verde, and it did not get implemented) This manual, if approved, provides the framework to administer state funds, release an RFP for Chamisa Verde for a development partner, and procure or provide resources for housing projects in the future.
The Town should RFP out for a third-party to administer programs as designed in this manual. These are complex processes to administer, and it s a best practice for local governments to have third-parties manage home buyer readiness programs, financial management of public resources, negotiation of affordable homes with private sector partners, set annual effective home prices, manage second mortgages etc. Housing Manual Program Administration Other communities that contract out services: City of Santa Fe, Santa Fe County, Las Cruces, Albuquerque etc Taos should consider budgeting for services over the next few years to ensure all of your public funding can be successfully deployed and managed ($3.9 million in state and $1.8 million federal)
1. Purpose Housing Manual 2. Authority 3. Definitions 4. Housing Program Client Eligibility Overview 5. Homebuyer Assistance Programs 6. Qualifying Affordable Housing Projects 7. Long-Term Affordability Mechanisms 8. Program Administration and Agreements 9. Administrative Procedure Amendments
Housing Manual Affordable essentially has its own vocabulary. (See pages 2-3 in manual for key definitions) housing work can be complex and Definitions Example: Affordable Housing Unit a unit provided at a price that is affordable to households in Taos County making less than 120% AMI.
Housing Manual Establishes broad client eligibility for assistance through Town programs. Housing Program Client Eligibility These eligibility guidelines were created using best practices from other successful New Mexico housing programs to ensure these guidelines would be accepted by the mortgage industry and funding partners such as the New Mexico Mortgage Finance Authority (MFA). Income based eligible based on AMI (based on Affordable Housing Act)
Housing Manual Create opportunities for low and moderate-income residents of the town of Taos to purchase moderately priced existing housing available in the open market or to qualify for a Town sponsored financial product, like a second mortgage, or to qualify for a discounted home provided through a Town sponsored housing project. Homebuyer Assistance Programs
Housing Manual Homebuyer Assistance Programs Target Market
Example: Town has site it wants to donate to a third-party in exchange for affordable housing. Example of How the Manual is Applied State grants are also available to subsidize this development. In order to provide both resources, the Town has to explain what is required in exchange for the resource. Ensure that the subsidies do not enrich a household but are recaptured (second mortgage model) Ensure to funders that the Town is a good steward of public resources.
Housing Manual 2024 Tiered Pricing
The Town has to be able to, directly, or through a third-party, develop affordable home prices and rents and ensure those units are offered to income qualified households. Housing Manual For instance: If a household of 4 earns 95% of area median income ($67,450) they fall within Tier 2 of the pricing table. As such the price for Tier 2 is $211,200. Setting Price to Match to Household Someone has to determine their income is between 81-100% AMI range. They would then get qualified for a mortgage loan for the purchase price of $211,200 and could then be placed on an interest list for the home.
Housing Manual Town Sponsored Mortgage Assistance Program To recapture the subsidy in an affordable home, the town or its agent will record a second mortgage that is paid back to the Town when the owner sells or refinances the property. Resale Control: Second Mortgage During homeownership, the buyer does not make payments towards this second mortgage, only payments to the first mortgage, and repayment of the second mortgage is only due upon the home s sale, transfer or refinance.
Housing Manual Example: Home Appraised is $300,000 Second Mortgage Example Town s effective sales price is $250,000 Second mortgage = $50,000 As a second mortgage (lien) - it will be tracked by title and repayment required before the home can be sold.
Housing Manual The primary purpose of home pricing guidelines which establishes an effective sales price, allows the town to have a systematic process for determining what qualifies as an affordable housing unit and or project. Qualifying Affordable Housing Projects This process also includes a process to ensure that homebuyers are neither oversubsidized nor put in financially unsustainable housing situations.
Housing Manual This framework creates a standardized pricing methodology for the Town to use for its RFP processes to deploy its grants to develop affordable housing. Qualifying Affordable Housing Projects It is also a way to negotiate a set-aside with a private developer. The Town s agent can use the draft affordable housing proposal form to identify which units would be provided as affordable and a process for pricing and committing units to the Town in exchange for public or private resources.
Housing Manual When a developer is offering units as part of a land use approval process; these affordable housing proposals are converted to legal agreements which may take the form of a development agreement; a loan or other legal document formalizing these commitments. Program Administration and Agreements The agreement form may be dictated by the funding source or by local land use regulations and all will be drafted with the Affordable Housing Act in mind.
Housing Manual Long-Term Affordability Mechanisms Direct housing subsidies are important community assets and should be secured both to grow a long-term asset base for affordable housing, create resources to keep homes affordable long-term, to disincentivize flipping of affordable units and prevent windfall profits for program participants. The amount provided should align with the choice of a second mortgage tool.
Ask questions and clarifications Let Project Moxie know any suggested changes or if a deeper dive is needed Next Steps Goal: approve manual as soon as possible to begin using state resources for various housing projects, including re- activation of Chamisa Verde.
