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Making Affordable Housing Work

San Diego County

RSG serves as the primary consultant for the County of San Diego Health & Human Services Agency, Housing and Community Development Services.  Since 2016, RSG has provided the County with the following services:

Underwriting –Since 2016, RSG has conducted the underwriting and complete technical evaluations of multiple development proposals for affordable housing projects located throughout San Diego County. In this capacity, RSG has provided services including:

Developer Reviews – San Diego County retained RSG to review and evaluate responses to multiple NOFAs that the County issued regarding funding available for eligible affordable housing projects. This engagement capitalizes on our experience with the HOME Investment Partnerships Program, Section 8 Rental Assistance Project-Based Vouchers (PBVs), and Project-Based Veterans Affairs Supportive Housing (VASH) Vouchers. For each project, RSG thoroughly reviews the developer’s pro forma, including construction cost estimates, proposed sources and uses of funding, income and expense assumptions, and cash flow projections. 

Subsidy Layering Analyses – For each application, RSG performs a subsidy layering analysis to determine the project’s compliance with the strictest requirements of the various proposed funding sources. For projects proposed to be funded with TCAC   funding, RSG estimates the project’s competitiveness for tax credit funding.

Memorandums – For each development proposal we review, RSG provides the County a memo providing our recommendation regarding the amount of County funding warranted for the project and a summary of the strengths and weakness of the project. Our memo also details the developer’s major pro forma assumptions and whether   each assumption complies with County requirements and TCAC Guidelines (if applicable). 

Ramona Market Study – RSG evaluated a site located in the Ramona community plan area to determine whether it was suitable for the development of an affordable senior group home. RSG conducted a site assessment to identify the parameters by which an affordable senior group home could be developed on the site, as well as a market assessment to determine the level of local demand for this type of development.  Based on our site assessment and market assessment, RSG found the property suitable for an affordable senior group housing development.  RSG estimated that the property could be developed with up to 245 living units, a 60,000-square foot senior center, and a parking lot of about 245 spaces. Based on RSG’s assessment, the County moved forward with issuing an RFP to select a developer for the project.

Homekey Review – RSG is assisting the County with review of a developer’s proposal to acquire a hotel for conversion into housing. The developer proposes to partially fund the Project with HCD Homekey Program funding, as well as County funding. RSG reviewed the developer’s pro forma and provided the County a memo detailing our recommendation regarding the County funding request. The memo also summarized strengths and weaknesses of the project and our review of the pro forma assumptions. RSG highlighted potential changes to the pro forma that could increase the project’s financial feasibility and result in less County funding needed. 

Developer Capacity Evaluation – RSG performed analyses indicating the feasibility of potential projects, highlighting whether any gap financing is needed.  RSG also scrutinized the developer’s assumptions to ensure that the anticipated costs, revenues, and operating and replacement reserves were realistic and not over/understated.  This included a detailed look at developer fees and deferred fees.  Additionally, RSG prepared a long-term cash flow to ensure that prospective developers could remain solvent as an operator throughout the duration of the affordability period. RSG delivered a peer review pro forma analysis, consisting of detailed construction and project phasing assessment, a phasing and post-stabilization 55-year operating forecast, and various measures of return on investment based on the proposed developer’s preferred disposition of the project once developed.