A committee tasked with reviewing concepts for housing development on Old North Main Street heard from Lakes Region Community Developers at their meeting on Tuesday night (April 22).
Carmen Lorentz, executive director, and Kara LaSalle, real estate development director, detailed their conceptual plan for the development of a roughly 10-acre parcel located along Old North Main and Route 106.
The committee was formed to review responses to a request for proposals published by the city last year, which received four letters of interest from various development organizations.
Councilors created the commission — which comprises residents of Laconia, Mayor Andrew Hosmer and Councilors Bruce Cheney (Ward 1) and Eric Hoffman (Ward 3) — and asked them to open and review each of those letters as part of a process to investigate the possibility of developing housing on the city-owned parcel.
Committee members have met three times since March 11.
The letter of interest submitted by Lakes Region Community Developers was the only one of the four which garnered enough support from the committee to schedule a presentation. That presentation occurred Tuesday night in the Meredith Village Savings Bank Winnipesaukee Conference Room at Lakes Region Mental Health Center downtown.
In their letter, LRCD staff detailed their concept for 36 residential apartment units on the land, providing housing for individuals earning a broad range of income. LRCD staffers have developed real estate throughout the Lakes Region for nearly 40 years, and maintain a portfolio of 365 units between Laconia, Ashland, Gilford, Meredith, Tilton and Wolfeboro worth $60 million.
Lorentz described a property in Wolfeboro called Harriman Hill which contains 48 apartments.
“This is the typical product that we build in terms of the market that we’re serving. It’s a mix of working families and retirees,” Lorentz said. “At this property — I’d say maybe 70% families, 30% retirees — it’s housing that is affordable to people with certain levels of income. It’s not subsidized housing, it’s not income-based housing. But it’s restricted to people within certain income levels.”
The main source of funding comes from the Low Income Housing Tax Credit, a federal program run by the Internal Revenue Service created in the 1980s to encourage private investors to prioritize affordable housing. In using public programs to secure funding, LRCD is in essence agreeing to limit themselves in terms of who they can rent to and how much they can charge.
“It’s not really profitable without having some sort of incentive like this,” Lorentz said. “Using that program, in the past has typically generated 60% to 70% of the actual money that we need to build … and then it’s usually supplemented with other grants and funding sources that we pull together.”
Twelve members of the public joined city staff and the review committee at the meeting Tuesday night, expressing concerns regarding possible changes to the neighborhood in terms of quality of life, worries about reduction in property value as a potential side effect, opposition to individuals from lower-income backgrounds living there and also asked questions of Lorentz, LaSalle and municipal leaders.
“This is very conceptual. And if we were to move forward with something like this, any questions about the appearance or the exact site layout are probably best saved for a planning board meeting,” Ward 3 Councilor Eric Hoffman said. “Even developing this property at this point is not set in stone. This committee was formed to hear the concepts of developing it, and then decide if it’s something we want to go forward with.”
“This isn’t subsidized housing that we’re talking about, but it is restricted to people under certain levels of income,” Lorentz said. “The rents that we’re allowed to charge are also restricted to be under certain levels. It’s not conventional market-rate housing in the sense that we can just charge whatever we want and rent to whoever we want.”
In their proposal, LRCD staff included income limits at between 40% and 80% of area median income, which Lorentz said are the limits that could be served by their concept. Those figures come from the United States Department of Housing and Urban Development, and can be accessed on the New Hampshire Housing and Finance Authority website at nhhfa.org/publications-data.
The larger the household, the higher the income you could have while remaining within the limit. When a person applies to live in one of their properties beholden to those restrictions, a property manager reviews the household size and their adjusted gross annual income to determine if it’s under the limit or not in order to verify eligibility.
They’re allowed to charge “fair market rents”, which are determined by HUD, published by NHHFA and updated each spring, Lorentz said.
“If the whole property or a portion of the property used the Low Income Housing Tax Credit program, there is a state-defined assessment,” Lorentz said. “It’s essentially, I think, going to be 10% of the rental income is what the property would pay in property taxes, so that’s defined in state statute. If it was a mix — market rate or employer sponsored — that might have a different assessment.”
LaSalle explained a multi-step process followed by LRCD staff in developing a new property.
First, they conduct a feasibility analysis, to determine if their idea is possible. They look at factors like the zoning ordinance, if there are wetlands and what existing infrastructure is available, among other items. They’re doing that now.
“Will the project pencil?” LaSalle said. “That’s kind of the big thing.”
Staff would then look at conceptual design, a phase which typically takes three to six months and would occur after an agreement with site control is struck with the city. They do site design, look at density, infrastructure layout and archaeological impacts and complete preliminary architectural work, for example. At this point they’d make a preliminary presentation to the city’s Planning Board.
Schematic design, a process which would take six months to a year, is next on the list. This is also the point when they’d start developing a financing structure, putting together a project budget, funding sources and estimating costs.
Following schematic design, they’d submit a site plan application and begin the permitting process, while also submitting funding applications for sources including the Low Income Housing Tax Credit and the Community Block Development Grant, LaSalle said.
“During schematic design, that’s the point in which we would fully conceptualize the project,” LaSalle said. “That’s where architectural plans would be done, the site plans would be done, this is when you would go to planning board so you would have to have a full set of plans to submit to planning board to get your application permitted.”
The pre-construction phase, which typically takes about six months after funding is secured, comes before starting the closing process. Their concept includes 36 units across three buildings: 32 units would be “workforce/affordable”, Low Income Housing Tax Credit funded; four would be market-rate. It could include a mix of six one-bedroom units, 24 two-bedroom units and six three-bedroom units.
One-bedroom units may range between $1,000 and $1,600; two-bedroom units between $1,200 and $1,933; and three-bedrooms between $1,396 and $2,233, depending on family size.
“Typically, we see this is about a two- to three-year process from start to finish,” LaSalle said.
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