Michael Staton presentation for missing-middle housing session at Redevelopment Forum 2019.

1. UNCOMMON EXPERTISE.
UNMATCHED IMPACT.
Creative Small Building Financing Initiatives for
New Jersey
March 8, 2019

2. CPC HAS UNMATCHED EXPERIENCE IN SMALL BUILDING FINANCE
Since our founding in 1974, CPC has built strong and productive
relationships with key housing finance agencies and entities across the
Northeast, and helped to implement preservation programs and tools
which simplify the financing process for small multifamily building
owners
Drawing on our experience, we have compiled a high-level overview of
low-cost initiatives other jurisdictions have successfully
implemented to support small buildings owners with their financing and
development needs
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3. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS
CPC has helped other jurisdictions execute on initiatives which simplify and
ease the ownership and financing process for small buildings, including:
1. New York State partners with private lenders, such as CPC, who
specialize in small buildings to seek out financing opportunities for
its Housing Funds and Pension Funds
• The State targets its existing public resources to support small buildings,
through proactively providing direct financing and mortgage insurance
through a private, on-the-ground lender.
• CPC is already on the ground in NJ, building relationships and providing
expertise to small building owners, and could partner with the Neighborhood
Preservation Balanced Housing program to facilitate targeted financing
2. CPC works with New York State and other jurisdictions to identify
opportunities for regulatory relief and technical assistance for small
building owners
• Based on our deep experience in the space, CPC has written and published a
“Small Buildings Guide” to help small building owners through the financing
and development process
• Other solutions include regulatory waivers, landlord training, or designating an
office for small building owners” to reach out for technical assistance for
financing or regulatory concerns
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4. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS
3. Many cities, such as Erie, PA, are proactively marketing and
promoting the upside potential of investments located in
“Opportunity Zones”
• New Jersey could serve as a “one-stop shop” to 1) connect property owners
in need of financing with investors looking for deals, and 2) provide technical
assistance for small building owners seeking investors
• Some states are also directing resources to opportunity zones to support the
program to further attract investment where needed (may require legislation
or executive order)
4. Many States have facilitated and supported low-cost financing
programs for energy efficiency capital improvements, which
require no upfront investment from the owner
• A nationwide financing market exists for Energy Performance Contracting
(EPC), where debt service is made only to the extent of utilities savings
• Several states have implemented Property Assessed Clean Energy
(PACE) Financing programs for multifamily buildings – requires passing
already proposed legislation in NJ State legislature
• These programs impose no budgetary impact on the State as they are
funded by private lenders
• CPC has published a guide on underwriting energy efficiency investments,
which could help guide financing activity
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5. DRAWING ON SUCCESS FROM PROGRAMS IN OTHER JURISDCTIONS
5. New York, along with 34 other States, has implemented Historic
Preservation tax credits and Brownfield tax credits to help
revitalize older properties and distressed downtowns
• Tax credits can offset from the upfront redevelopment costs for historic
sites or remediation of environmentally hazardous properties; owners can
use credits to finance upfront capital costs
• CPC has had great success in working with borrowers to generate financing
using these credits across New York State
• This type of credit would require passing legislation already proposed in
NJ State Legislature, entitled “The Historic Property Reinvestment Act”
6. Jurisdictions frequently use Tax Increment Finance districts to
earmark funding for development and rehab
• Localities could earmark future property tax increases specifically for loans
and grants for small building owners
• New Jersey could gear funding towards particularly blighted real estate in the
district in need of severe development or rehabilitation
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