Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 4 30% 765 558 46 604 $26,784 1 24 80% 765 719 46 765 $207,072 1 12 Mkt 765 765 N/A 765 $110,160 2 5 30% 921 672 53 725 $40,320 2 30 80% 921 868 53 921 $312,480 2 15 Mkt 921 921 N/A 921 $165,780 3 1 30% 1,054 776 61 837 $9,312 3 6 80% 1,054 993 61 1,054 $71,496 3 3 Mkt 1,054 1,054 N/A 1,054 $37,944 The development will house tenants earning 30%-80% or less of Area Median Income (AMI) and will offer market rate units. Units set aside for tenants earning 30% AMI represent 10% of the units. The rents reflected in the table above are in line with the HUD High HOME Rent Limits. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $36,250.00 8.18% 12.4% 4.22% Management Fee $46,497.35 10.49% 8.2% 2.29% Payroll $109,700.00 24.75% 24.1% 0.65% Repairs & Maint. $65,500.00 14.78% 18.9% 4.12% Utilities $96,300.00 21.73% 14.7% 7.03% Property Insurance $45,000.00 10.15% 7.1% 3.05% Property Tax $44,000.00 9.93% 11.3% 1.37%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 24 <60% $724 $455 $70 $525 $151,200 2 4 <60% $856 $845 $84 $625 $30,000 The rents proposed by the applicant are lower than the HUD High HOME Rent Limits due to the projects goal to provide housing to persons earning 60% or below AMI. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $23,376.00 17.03% 12.4% 4.63% Management Fee $21,504.00 15.66% 8.2% 7.46% Payroll $35,816.00 26.09% 24.1% 1.99% Repairs & Maint. $16,317.00 11.88% 18.9% 7.02% Utilities $16,191.00 11.79% 14.7% 2.91% Property Insurance $14,000.00 10.20% 7.1% 3.10% Property Tax $10,090.00 7.35% 11.3% 3.95% Average Variance 4.44% The table above depicts the proportion of operating expense that each category represents as established by the 2016 Texas Gross Median Operating Expense Distribution published by CohnReznick based on an assessment of multifamily affordable housing properties across Texas. The total average operating expense variance of the proposed development from this established standard is approximately four percent which indicates that the operating expenses are appropriately estimated. As indicated above the following variances are noted:
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 3 30% $765 297 65 $362 $10,685 1 12 80% $765 700 65 $765 $100,771 1 10 Mkt. N/A 875 0 $875 $105,000 2 4 30% $921 359 76 $435 $17,222 2 18 80% $921 845 76 $921 $182,477
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 1 30% $765 $546 $76 $622 $6,552 1 7 80% $765 $546 $76 $622 $45,864 2 2 30% $921 $687 $96 $783 $16,488 2 14 80% $921 $687 $96 $783 $115,416 The rents proposed by the applicant are lower than the HUD High HOME Rent Limits. This scenario is allowable, however reaching the maximum HOME Rent Limit will provide stronger operating cashflow if feasible under current market conditions. Development Expense Analysis Operating Expense Amount Proposed % of Operations 2016 Texas Gross Median Operating Expense Distribution Variance Administrative $ 31,660.00 19.77% 12.4% 7.37% Management Fee $ 18,432.00 11.51% 8.2% 3.31% Payroll $ 47,400.00 29.59% 24.1% 5.49% Repairs & Maint. $ 16,094.00 10.05% 18.9% 8.85% Utilities $ 13,753.00 8.59% 14.7% 6.11% Property Insurance $ 14,669.00 9.16% 7.1% 2.06% Property Tax $ 18,171.00 11.34% 11.3% 0.04%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 3 30% 789 327 46 373 $11,772 1 21 80% 789 704 46 750 $177,408 1 10 Mkt N/A 795 N/A 795 $95,400 2 5 30% 948 394 53 447 $23,640 2 25 80% 948 895 53 948 $268,500 2 12 Mkt N/A 975 N/A 975 $140,400 3 1 30% 1,087 456 61 517 $5,472 3 4 80% 1,087 1,026 61 1,087 $49,248 3 3 Mkt N/A 1,095 N/A 1,095 $39,420 The rents reflected in the table above are in line with the HUD High HOME Rent Limits. The development will provide units for extremely low-income tenants, low-to-moderate income tenants, and market rate tenants. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $36,250.00 8.43% 12.4% 3.97% Management Fee $40,975.10 9.52% 8.2% 1.32% Payroll $101,200.00 23.52% 24.1% 0.58% Repairs & Maint. $65,500.00 15.22% 18.9% 3.68% Utilities $96,300.00 22.38% 14.7% 7.68% Property Insurance $45,000.00 10.46% 7.1% 3.36% Property Tax $45,000.00 10.46% 11.3% 0.84%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 25 80% $744 $665 $79 $744 $199,500 1 15 Mkt. N/A $895 N/A $895 $161,100 2 25 80% $898 $796 $102 $898 $238,800 2 7 Mkt. N/A $995 N/A $995 $83,580 3 6 80% $1,117 $990 $127 $1,117 $71,280 3 2 Mkt. N/A $1,200 N/A $1,200 $28,800 The project will provide units for tenants earning up to 80% AMI and market rate tenants. The rents proposed by the applicant for LMI units are in line with the HUD High HOME Rent Limits. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $34,600.00 8.30% 12.4% 4.10% Management Fee $36,845.00 8.84% 8.2% 0.64% Payroll $101,372.00 24.32% 24.1% 0.22% Repairs & Maint. $65,960.00 15.82% 18.9% 3.08% Utilities $52,800.00 12.67% 14.7% 2.03% Property Insurance $34,280.00 8.22% 7.1% 1.12% Property Tax $91,000.00 21.83% 11.3% 10.53%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 3 40% $765 $175 $156 $331 11,916 1 5 50% $765 $297 $156 $453 27,180 1 8 60% $765 $419 $156 $575 55,200 2 4 40% $921 $229 $178 $407 19,536 2 10 50% $921 $375 $178 $553 66,360 2 18 60% $921 $521 $178 $699 150,984 2 2 MKT N/A $760 N/A $760 18,240 3 1 40% $1,540 $257 $209 $466 5,592 3 4 50% $1,540 $425 $209 $634 30,432 3 15 60% $1,540 $594 $209 $803 144,540 3 6 MKT N/A $860 N/A $860 61,920 The project serves a mixed income population with units set aside for 40% to 60% AMI as well as offering units at the market rate rent. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $ 60,376.00 15.63% 12.4% 3.23% Management Fee $ 36,786.38 9.52% 8.2% 1.32% Payroll $ 85,000.00 22.01% 24.1% 2.09% Repairs & Maint. $ 44,600.00 11.55% 18.9% 7.35% Utilities $ 71,500.00 18.51% 14.7% 3.81% Property Insurance $ 40,000.00 10.36% 7.1% 3.26% Property Tax $ 48,000.00 12.43% 11.3% 1.13% Average Variance 3.17% The table above depicts the proportion of operating expense that each category represents as established by the 2016 Texas Gross Median Operating Expense Distribution published by CohnReznick based on an assessment of multifamily affordable housing properties across Texas. The total average operating expense variance of the proposed development from this established standard is approximately three percent which indicates that the operating expenses are appropriately estimated. As indicated above the following variances are noted:
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 1 30% $524 $420 94 $514 $5,040 1 7 80% $524 $420 94 $514 $35,280 2 3 30% $697 $520 126 $646 $18,720 2 29 80% $697 $520 126 $646 $180,960 The development provides housing for households earning 30%‐80% of AMI. The rents reflected in the table above depict rents that are below the High HOME rent limit in order to serve a very low‐income population. Units designated as 80% AMI reflect rents that are slightly below the High HOME rent limits. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $34,160.00 19.20% 12.4% 6.80% Management Fee $14,771.99 8.94% 8.2% 0.74% Payroll $57,399.62 32.26% 24.1% 8.16% Repairs & Maint. $21,405.00 12.03% 18.9% 6.87% Utilities $27,749.22 15.60% 14.7% 0.90% Property Insurance $8,906.00 5.01% 7.1% 2.09% Property Tax $12,400.00 6.97% 11.3% 4.33%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 1 2 30% $871 270 151 $421 $6,480 1 10 80% $871 630 151 $781 $75,600 1 4 Mkt N/A 700 N/A $700 $33,600 2 2 30% $1,066 302 204 $506 $7,248 2 12 80% $1,066 671 204 $875 $96,552 2 6 Mkt N/A 745 N/A $745 $53,640 3 1 30% $1,304 306 277 $583 $3,672 3 5 80% $1,304 815 277 $1,092 $48,870 3 2 Mkt N/A 905 N/A $905 $21,720 The development provides housing for households earning 30%-80% of AMI as well as providing market rate units. The rents for 30% AMI units are lower than the High HOME rent limits in order to serve a very low-income population. Rents for units designated as 80% AMI and market rate are slightly below the High HOME rent limits. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $26,760.00 13.65% 12.4% 1.25% Management Fee $20,878.00 10.65% 8.2% 2.45% Payroll $58,404.00 29.80% 24.1% 5.70% Repairs & Maint. $27,500.00 14.03% 18.9% 4.87% Utilities $22,704.00 11.58% 14.7% 3.12% Property Insurance $22,132.00 11.29% 7.1% 4.19% Property Tax $17,600.00 8.98% 11.3% 2.32%
Operating Review. Rent Analysis Proposed Rents Bedroom Size Number of Units Set Aside % High HOME Rent Limit Base Rent Utility Allowance TTP Annual Gross Potential Rents 2 12 <80% 856 856 0 856 123,264 3 12 <80% 1,010 1,010 0 1,010 145,440 The rents proposed by the applicant are in line with the HUD High HOME rent limits set by the Affordable Rental Program and the project will serve a population earning 80% AMI or below. The applicant has not provided a utility allowance for the project. The rents received for the property may be offset by a utility allowance which should be developed by the applicant in accordance with the HUD Utility Schedule Model (HUSM) standard. Development Expense Analysis Operating Expense Projected Expense Proposed % of Operations 0000 Xxxxx Xxxxx Median Operating Expense Distribution Variance Administrative $ 36,000.00 28.89% 12.4% 16.49% Management Fee $ 27,135.48 21.77% 8.2% 13.57% Payroll $ - 0.00% 24.1% 24.10% Repairs & Maint. $ 14,500.00 11.64% 18.9% 7.26% Utilities $ 23,051.52 18.50% 14.7% 3.80% Property Insurance $ 14,820.00 11.89% 7.1% 4.79% Property Tax $ 9,116.00 7.31% 11.3% 3.99%
