Rapid Response Community Preservation Pilot Program (June 30, 2021)

Summary

The Rapid Response Community Preservation Pilot Program report to the Legislature, dated Nov. 1, 2022, from the Multifamily Housing Unit of the Washington State Department of Commerce, pursuant to Chapter 413, Laws of 2019, Section 1054. It states that the 2019 capital budget appropriated $1 million, a supplemental $1 million followed in the 2020 capital budget, and the program spent all of the $2 million to assist in the cooperative formation and purchase of five communities. The report states that Commerce awarded funds to five communities, helping to acquire 263 units of housing, of which 99 units are restricted for 25 years. Its demographic section lists categories and figures for communities including Evergreen Estates and Hidden Gardens.

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 Rapid Response Community
 Preservation Pilot Program



   Report pursuant to Chapter 413, Laws of 2019, Section 1054




                                              Nov. 1, 2022

       MULTIFAMILY HOUSING UNIT               Report to the Legislature

                                              Director Lisa Brown
V3.1
Acknowledgments
Diane Klontz, deputy director of divisions and program alignment

Corina Grigoras, assistant director, Housing Division

Nathan Lichti, managing director, Multifamily Housing Unit

Mark Kollmansberger, supervisor of asset management

Graham Parrington, policy and communications coordinator

Dave Pringle, policy advisor

Devin Proctor, policy and communication manager

Northwest Cooperative Development Center (ROCNW)
Sam Green, financial officer

Victoria O'Banion, Marketing and Acquisition Specialist


Washington State Department of Commerce
Nathan Lichti, managing director

Nate.Lichti@commerce.wa.gov

Multifamily Housing Unit

1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525

www.commerce.wa.gov

For people with disabilities, this report is available on
request in other formats. To submit a request, please
call 360-725-4000 (TTY 360-586-0772)




 RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM
Table of Contents
Executive summary...................................................................................................................................... 2

Fund distribution process ............................................................................................................................ 3

Purchased parks .......................................................................................................................................... 4

Community demographics ........................................................................................................................... 5




  RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM                                                                                                   1
Executive summary
Overview
The 2019 capital budget (Chapter 413, Laws of 2019) appropriated $1 million for the Washington State
Department of Commerce to implement the following:

    "[A] rapid response manufactured housing community preservation pilot program for the purpose of preserving
    manufactured and mobile home communities. To implement the program, the department of commerce must
    contract directly with the Northwest Cooperative development Center-resident owned communities through a rapid
    contracting process, allowing the contractor to work with the residents of one or more mobile home parks to engage
    in one more purchase and sale agreements, with the purpose of preserving the mobile home community as a
    nonprofit, or co-op run affordable housing project and benefitting people and households at or below eighty percent
    of the area median income. The department of commerce, in collaboration with the contractor, must submit a report
    to the Legislature by June 30, 2021, reporting how the funds were distributed, how many mobile home parks were
    purchased, and the demographics of the residents."

Following a supplemental $1 million award in the 2020 capital budget (Section 1018), Commerce extended the
contract to June 30, 2023. The program spent all of the $2 million to assist in the cooperative formation and
purchase of five communities.

This report responds to the three reporting requirements in the proviso:

1. How Commerce distributed the funds

2. How many mobile home parks were purchased

3. The demographics of the park residents

Program highlights
      Commerce awarded funds to five communities, helping to acquire 263 units of housing (NOAH); 99
      units are restricted for 25 years to remain affordable to low-income households.

      Funds from this program helped close funding gaps for the five communities, averaging 12% of the total
      project cost.

      Purchased parks are located in Eastern and Western Washington and rural and urban areas.

      Residents include high proportions of seniors, Native Americans and Alaska Natives, Hispanics and
      people with disabilities.




 RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM                                                                2
Fund distribution process
Commerce and Northwest Cooperative Development Center (NWCDC) implemented a unique contract
structure for this pilot program. Commerce extended a service contract with the full funding appropriation and
business terms of the partnership. The budget, expectations for affordability and conditions for monitoring
were agreed upon, and the execution of the contract provided NWCDC with confidence that funding would be
available at the time of acquisition. The parties amended the contract when a second appropriation was
added, and business terms needed modifications.

Upon entering into a purchase agreement, NWCDC initiated the establishment of the cooperative, a process
that requires 60 to 90 days and runs in conjunction with its due diligence period. However, documentation of
the purchase was not provided to Commerce until the cooperative was eligible to approve the funding request
as the formal contract applicant. Upon receipt of documentation, Commerce initiated a review of the due
diligence material and prepared a contract and securitization documents in preparation for a closing. The
service contract specified a 30-day contracting process. Some projects experienced closing delays caused by
items found in inspections and other complications.

Commerce and NWCDC worked diligently to resolve issues and made funds available for a timely closing.
Projects initiated by NWCDC closed with HTF funds disbursement to purchase the mobile home parks. In each
closing, there were delays after Commerce funds were delivered to escrow. NWCDC did not withdraw
administrative funds from the contract but received a technical assistance fee separately.




 RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM                                                        3
Purchased parks
The Northwest Cooperative Development Center (NWCDC) completed five mobile home park purchases,
including 263 total lots. Commerce ensured a portion of the lots would be affordable to low-income
households for the contract duration, resulting in the preservation of 99 lots for low-income households
("restricted lots").

Table 1: Details of the purchased communities

                                   Total   Restricted   Total project                    Commerce award
 Community      Address            lots    lots         cost            Debt financing   (% of total project cost)

 Evergreen      1713 Cooks Hill
 Estates H/O    Rd., Centralia,       55            4     $3,991,778        $3,967,000          $275,000 (6.89%)
 Co-Op          WA, 98531

 Hidden         34826 Kinsman
 Gardens        Rd. E., Roy, WA,      23            3     $1,698,357        $1,700,000        $207,000 (12.19%)
 H/O Co-Op      98580

                133 NE Catalpa
 Royal
                Avenue, Royal         56           28     $1,997,578        $1,991,000        $280,000 (14.02%)
 Coachman
                City, WA, 99357

                3057 Rd. H NE,
 Quail Run      Moses Lake,           66           33     $4,789,809        $4,787,000        $990,000 (20.67%)
                WA, 98837

                7110 146 St.
 Bob's and
                SW, Lakewood,         63           31     $5,899,575        $5,898,000          $248,000 (4.20%)
 Jamestown
                WA, 98439

 Totals         N/A                 263            99   $18,377,097        $18,343,000       $2,000,000 (11.6%)




 RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM                                                             4
Community demographics
The Northwest Cooperative Development Center provided demographic categories and figures. The totals
might exceed 100%, as some individuals are counted in multiple categories.

Evergreen Estates:
   Seniors over 55: (54) 98%
   White: (54) 98%
   Disabled: (15) 27%
   American Indian or Alaskan Native: (1) 2%

Hidden Gardens:
   American Indian or Alaskan Native: (17) 78%
   Seniors: (8) 34%
   Disabled: (4) 17%
   Veterans: (4) 17%
   Hispanic: (4) 17%
   Non-Hispanic white: (1) 2%

Royal Coachman:
   Hispanic: (185) 100%
   Seniors over 55: (2) 1%

Quail Run:
   Hispanic: (86) 59%
   White: (60) 41%
   Veteran: (2) 1%

Bob's and Jamestown:
   Hispanic: (103) 59%
   White: (65) 37%
   Seniors: (12) 7%
   Native American: (2) 1%




 RAPID RESPONSE COMMUNITY PRESERVATION PILOT PROGRAM                                                   5


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