Special Project Types

If the RCS appraiser uses comparables from project categories that would not typically be suitable for use as comparables for multifamily rental housing, as outlined under Section 910. C.4, the RCS appraiser must consult the guidance provided below.

• A. Cooperative Project (Co-Op): A Co-Op is a multi-unit project in which those who own the project actually own shares in the Ownership of the overall project as a whole. For the purposes of an RCS, the fact that the project is a co-op doesn’t significantly affect the market rental rate of the subject and/or the comparable project. Depending on the market evaluation that is performed by the RCS appraiser, an adjustment may be justified for the Ownership being a co-op but most likely it will have no effect on the concluded market rental rate.

• B. Elderly/Disabled: Housing designated for elderly families or families that include an individual with a disability are different from traditional market rate projects because these projects typically include services offered at no extra cost to the tenant. The mix of these services will vary widely among projects in each market as well as between different markets. Upon identification of housing designated for elderly families or families that include an individual with a disability, the RCS appraiser should determine what extra services are provided (and how they are funded) and during the comparable selection process attempt to identify projects that offer similar services with the same restrictions as well as being in the defined market area. The preference in selection would be to go outside the market area and find comparable projects offering the same or similar services, rather than locating projects within the defined market areas but offering different services. If the property designated for elderly families or families that include an individual with a disability project doesn’t offer any services above and beyond a normal market rate project, then no adjustments would be required and the comparable selection could utilize traditional market rate projects for comparison. However, an adjustment would most likely be required due to the restriction of the tenant pool as compared to a traditional market rate project.

• C. Student Housing: Included as a Special Project due primarily to the growth of these projects, and the “by the bed” rental structure that they often offer. There are two types of projects that fall under the Student Housing category; (1) traditional apartment projects that are rented by the unit, but are restricted to students and (2) “by the bed” projects.

• D. The first project type is one that is similar in operations and rentals to the traditional apartment project, and specifically similar to an elderly or age-restricted project. The tenant rents a studio or larger unit, containing a kitchen, bath, and sleeping quarters.

The second project type is one that has become very popular over the last 10-20 years and that is a project that rents beds, rather than apartment units. Accordingly, there will be two or more tenants sharing a living unit. This concept is similar to a college dorm concept mixed with a traditional apartment project. Commonly, these projects will also offer services that cater to students and student-living and will be located on and very close to campus. As an RCS will in all cases involve estimating market rents for self-

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contained living units rather than bed rentals within shared apartment units, this second project type cannot under any circumstance be used as a rental comparable for the RCS.

• E. Congregate-Care Projects: Included as a Special Project Type due to the amount of extended services available, and the “by the bed” rental structure that they sometimes offer. There are several types of projects that fall under Congregate-Care Housing but all offer some level of home health care services to either the elderly or persons with special needs. The different types could include (1) Assisted-living facilities, (2) senior citizen housing, or (3) other age-restricted retirement communities. Congregate-care housing typically offers enhanced healthcare services for the elderly, whereas the typical elderly housing projects offer only limited services with no specific healthcare applications.

For some care facilities, residents lease a bed rather than a private unit. Typically, that kind of facility will offer skilled nursing, and will require payment on a daily rather than monthly basis. The RCS appraiser will not encounter this type of facility for purposes of estimating rent for a Section 8 project. Accordingly, there is no reason to use projects rented on a daily rather than monthly basis as rental comparables. As an RCS will, in all cases, involve estimating market rents for self-contained living units rented on a monthly basis, rather than daily bed rentals, this project type cannot under any circumstance be used as a rental comparable for the RCS.

• F. After-Rehabilitation: Included as a Special Property Type due to the hypothetical assumption that the proposed renovation has been completed. This requires a dual review of the subject project in its “as is” state, and a “projected” review as though all units and common areas that will be renovated have already been renovated, in accordance with the specifications provided in the renovation scope of work. This then requires the RCS appraiser to include comparables similar to the subject project in its post-renovation condition.

The RCS appraiser should review what if, any repairs are proposed for the subject project. Proposed changes to the subject project other than routine repairs for deferred maintenance may need to be reflected in Form 92273-S8 adjustments to rental comparables. Examples of adjustments that may need to be reflected in the RCS appraiser’s Form 92273-S8 analysis would include changes in utility configuration, such as installing separate living unit meters that effectively convert an Owner-paid utility service to a tenant-paid basis. Another example of possible adjustments would be additions or reductions in the scope of non-shelter services, such as would occur if management were proposing to eliminate an on-site day care facility or other amenity. Even if no specific change is proposed to utility configuration, available amenities, or available non-shelter services, the subject project’s overall condition and appeal may be enhanced by the proposed scope of work. Accordingly, the RCS appraiser needs to consider how adjustments for line items 7 and 8 of the form 92273-S8 (Year built/Yr. Renovated and Condition/Street Appeal) will be affected.

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