Feasibility Study Executive Summary

Community Frameworks of Washington 2016

Building Ohana is a non‐profit organization in Spokane, Washington seeking to develop a diverse Village of 120 – 150 people, of different income levels, including individuals with a range of neuro/developmental differences, seniors, and families. The Village will include modest one‐, two‐, three‐, and four‐bedroom homes with shared grounds and a common house.


This project concept is unique, innovative and ground breaking. In our research we found no comparable models, although many groups in the United State and abroad have created communities that Ohana can build upon in terms of design, financing, and self‐government. This feasibility study seeks to blend affordable housing and private development practices for an inclusive community that is supportive of all its residents. The uniqueness poses a challenge to Community Frameworks, a non‐profit low income housing developer, and other partners to think creatively to overcome barriers to combining public and private financing, include mixed income households, and create a range of housing opportunities for disabled and non‐disabled persons.

In September 2015, Building Ohana engaged Community Frameworks, a non‐profit affordable housing developer, to complete a feasibility study. The scope of work is:

  • Refine and develop the project scope.

  • Review land availability for a co‐housing home ownership concept, mixing homeownership with rental, mixing commercial and housing uses.

  • Assess potential financing options including market options, public subsidies, and propose potential financing scenarios.

  • Assess the potential operating budget including analyzing household incomes and rent or mortgage levels for low income residents and possible need for subsidy.

  • Assess the capacity of Ohana to secure financing and operate the project.

  • Provide a risk assessment, comparing risk of development with meeting milestones that mitigate risk.

  • Create a predevelopment timeline, budget, and task list.


Community Frameworks met with a group of stakeholders twice to further understand the goals and to hone the project concept and met frequently with Ohana Board members throughout the process. This input resulted in these parameters for a mixed income and mixed use concept:


  • 20 – 22% of the residents will have developmental disabilities. Some of these residents will be home owners, others will live with their families, and others will be renters, some in group homes.

  • Approximately 40% of the housing units will be occupied by low income households, including individuals with development disabilities, but also low income families and seniors.

  • The market rate units must be reasonably affordable compared to other housing options in the Spokane market. Many of the community members interested in living in the Village are moderate income people working in social services that cannot afford to purchase an expensive home. After much discussion we settled on these price points ‐ $140,000 for a one bedroom, $200,000 for a two‐bedroom, $260,000 for a three‐bedroom, and $335,000 for a four‐bedroom home.

  • Constructing the buildings as a single project with some public funding will trigger public funder requirements that will drive up costs, perhaps as much as 20%. This is an important point and led CF to propose a scenario where the majority of the project is homeownership, with low income people accessing down payment assistance as the primary mechanism to achieve a mixed income community.

  • An affordable rental component is feasible; a market rate rental component does not appear to be feasible at this time. Building Ohana could reserve land for a non‐profit to develop group homes and other rental housing with public subsidies. This land would be sold to the non‐profit, who would use a mix of federal, state and local government subsidies to develop the housing. Market rate rentals would require a private investor to develop a rental component. With low Spokane area market rents and comparatively high construction costs due to the type of community, it is unlikely the investment opportunity would be attractive. However, it is a priority for Ohana to have rental options for non‐low income households and the group should revisit this as the project unfolds.

  • A commercial component to the project should be considered later in the development process. Ideally Building Ohana would like a commercial component , with ‘main street’ style businesses. The feasibility of this component is dependent on having an investor partner and is further complicated by zoning and location. Ohana stakeholders have emphasized the need for a commercial component depends on the location of the site – a site in a developed neighborhood may have other commercial outlets nearby.


Throughout the process of doing the feasibility study there was significant tension between the cost of the project and the affordability of the homes. This led to difficult, but productive, conversations regarding access to home ownership in Ohana Village by moderate income households and the line items expenses in the budget. The tension was felt in land size and location, size of the common house and size of the individual units, energy efficient and sustainable construction, architectural fees, and project management/developer fees.


This feasibility study offers compromises in each of these areas – the architecture costs include specialized site design and common house design, but purchasing and modifying stock home designs; per foot construction costs are at the high end of private market subdivision developer costs, but below highly sustainable construction; the common house is included in the budget at 6,500 square feet, lower than the ideal 7,200 square feet requested. It was very difficult to estimate land and site costs because Building Ohana would consider such a broad range of options from small city to within a developed neighborhood of Spokane. We ultimately included $45,000 per lot for a combination of land acquisition and lot development costs, based on the high end of the typical subdivision developer range. Initially we included a 4% developer fee, assuming that the development services expenses would be lower than a typical affordable housing project because the financing would be simpler and there would be far fewer regulatory requirements to monitor during development.  After the many comments from the draft feasibility study CF raised the fee to 6%. The functions covered by this fee are detailed on page 35.

Ohana is clear and strong in the core goal of building an inclusive and diverse community. These other issues that effect cost are important secondary priorities that should be revisited as the project moves forward.


This is a feasibility study of a concept, not a particular development on a particular site. Given the parameters described above, Community Frameworks believes the following financing scenario is feasible:

  • Predevelopment, land acquisition and site work development costs of approximately $3.2M must be substantially funded through private donations and loans or reservation fees from home purchasers. Approximately 60% of this amount could be borrowed from a CDFI (Community Development Financial Institution) or other non‐traditional lender.

  • Construction financing for the homes could be secured from a bank for units that are pre‐sold, with a loan amount of 75% of the appraised value of each home. The gap in construction financing would be from down payments or the CDFI loan already in the land/lot costs. It is likely that the Village would be constructed in phases with groups of about 15 pre‐sold homes in each phase.

  • The common house would be constructed with donation funding.

  • Low income purchasers would access down payment assistance so that they could afford their

    mortgage payments. Section 8 vouchers may be available to further subsidize the mortgage

    payments for extremely low income buyers.

  • A small, modeled at 2 group homes and 6 other homes, affordable rental project could be

    included, owned and financed separately.


Community Frameworks’ task was to craft a project concept with a feasible financing scenario. As Ohana proceeds with the development, the project scope may be adjusted. For example, the number of units will depend on the site. The success of the capital campaign could provide flexibility in energy efficiency components and the size of the common building, etc.