A housing authority can utilize up to 20% of its Housing Choice Voucher (HCV) funding to “attach” rent subsidies to specific housing units. The attached subsidy is known as a project-based voucher (PBV). PBVs are a component of the HCV program and share most of the same rules and regulations. PBVs are attached to units via a contract with the owner that requires the units be rented to families eligible for the HCV program. While tenants living in a PBV unit may move with regular voucher assistance, the PBV remains attached to the unit and the owner must select another HCV-eligible tenant for that unit. The advantage of PBVs for owners is that the PBV commitment from a housing authority can be used to leverage financing for the construction, rehabilitation or preservation of housing for low-income families by providing a greater cash-flow than the property would otherwise generate. This is because most funding available to owners of affordable projects restricts the rent that can be collected from tenants to an affordable amount that is usually far less than a comparable unit would merit on the open market.  
  
However, because the HCV program pays market rate rents by subsidizing the difference between an affordable rent for the tenant and the market rate rent for a particular unit, and the PBV program uses this same basic formula, the amount of rent that an owner can collect from a PBV unit is usually significantly higher than otherwise available to the project. This allows the owner to leverage far more financing than if PBVs were not available and thus can be crucial to the success of a given project. The primary advantage of PBVs to a housing authority is that they help increase or preserve the supply of permanent, affordable housing available to both the community and to HCV recipients.  
  
As part of the assumption of the Richmond Housing Authority’s (RHA) Housing Choice Voucher (HCV) Program, HACCC took control of the PBV commitment RHA made to TPC Holdings VI, LLC for 162 units at 2100 - 2300 Nevin Avenue, known as the Terraces. While the other PBV projects assumed by HACCC from RHA were completed and occupied, the Terraces have been under construction for the past two and a half years. HACCC split the project into two properties so that occupancy for one building could happen without holding up occupancy of the other building while it was still under construction. The first completed building was a Senior development that included 127 PBV units. The Board authorized execution of the HAP Contract for Terraces Senior at our May 18th meeting. The second building is a family development that will include 35 PBV units and is now complete. Construction at Terraces Family Apartments is now complete, and the management is ready to proceed with occupancy. This Board order is brought before you to receive authorization to execute the HAP Contract, thus allowing Terraces Family to proceed with lease-up.

Approximately $77,756,934 of funding will be provided to this project over a forty-year span. All funding will be provided as part of HACCC's annual budget from the U. S. Department of Housing and Urban Development (HUD).

Should the Board not authorize the Executive Director to execute the PBV HAP contract for the Terraces Family Apartments located at 2300 Nevin Avenue in Richmond, CA, the project will not be able to house 35 low-income families at the property with rents that will remain affordable due to the PBV assistance. Further, the entire property could be jeopardized as funding relies significantly on the receipt of PBVs.