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The Current Project

At Home in Summit is currently supporting the nonprofit Summit Affordable Housing Corporation's proposal to build 42 units of rental housing for working families on the old firehouse site and 7 Cedar Street.  The proposal is a practical, actionable plan for Common Council to consider and approve.

Proposal: 

  • Build 42-units of rental housing on the firehouse site and 7 Cedar Street (0.85 acres)

  • 4-story elevator building with ground floor parking (1:1)

  • 45% of lot covered (49 units per acre)

 

Affordability:  

                                                                                        *Area Median Income

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  • 20 units (2-1BR, 14-2BR & 4-3BR) will be available to households making less than $76,000/year (60% of AMI)

  • 16 units (4-1BR, 8-2BR & 4-3BR) will be available to households making less than $63,000/year (50% of AMI)

  • 6 units (2-1BR, 3-2BR & 1-3BR) will be available to households making less than $38,000/year (30% of AMI)  

Project Financing:

* Low Income Housing Tax Credits

** New Jersey Housing Mortgage Finance Agency

***The land price paid to Summit is uncertain until all other financing is determined but could be between $1.5 and $2.5 million.

An illustration of the Financial Structure is presented below.

Project Timeline:

  • 0.85 acre site is optioned to an affordable housing developer via an RFQ

  • Developer secures local approval to construct 42 rental units

  • The City’s Fair Share Plan is modified to include the firehouse site

  • Summit commits to a 30-year Payment in Lieu of Taxes (PILOT) (6.28% of project revenue = $36K/yr)

  • Summit places a “perpetual” affordable housing deed restriction on property

  • Summit Affordable Housing Trust Fund (AHTF), via the Summit Affordable Housing Corp., pledges a “soft” 1%, 30-year loan of $2MM to the project

  • HMFA commits $3.3MM mortgage, $8.4MM LIHTC and $6.3MM AHPF (85% of total development cost)

  • Developer is paid $1.2MM during development and leasing (24 months) and $1.2MM from cash flow over next 15 years

Takeaways:

  • Create OPPPORTUNITY for families and children with 42 new units of affordable rental housing

  • City controls the process – local control

  • Leverage state and federal programs to finance development

  • Manageable investment from the City

  • Full transparency on development fees and financing

  • HMFA and LIHTC guidelines dictate many aspects of the project including rents, tenant incomes, PILOT and developer fees 

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Time is of the essence

HMFA Affordable Housing Production Fund dollars must be committed by 12/31/24 or they expire, so Summit is required to move expeditiously to take advantage of these resources: An RFQ must to be issued and a developer selected, zoning changes to the site need to be made and applications for the various state funding programs should be made as soon as possible.

Site Plan:

Ownership, Financing, and Funding Structure

illustration of funding sources and uses
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