20140506_Homeless With More_Jerryt Krombeen Part 2 by Jerryt.nl

BUILDING DESIGN SCENARIO 2 Connect with the neighborhood

PROJECT FINANCES

Investment Total Investment Debt to Equity Ratio

Building Square Footage Total Revenue Generating Sq/Ft Total Constructed Sq/Ft Unrented Space Sq/Ft Percentage of unrentable Space

Rent by Square Foot Studio Room per Sq/Ft 1 Bed Room per Sq/Ft 2 Bed Room per Sq/Ft 3 Bed Room per Sq/Ft Leasable Space #1 per Sq/Ft Leasable Space #2 per Sq/Ft Leasable Space #3 per Sq/Ft Leasable Space #4 per Sq/Ft Leasable Space #5 per Sq/Ft Leasable Space #6 per Sq/Ft

Parcel Total Parcel Area Floor to Area Ratio

$897.000 22% 3271,9 3942,5 670,6 17,01% $4,00 $3,50 $3,50 $2,50 $5,50 $4,00 $4,00 $4,00 $4,00 $4,00

Analytics Promised Annual Rate of Return to Investors Annual Payment to Investors Net Present Value (NPV) Proceeds from Sale as Developer Yearly Profit as Developer Net Present Value (NPV) for Developer

Returns Cash-on-Cash Return Return-on-Equity Unlevereged IRR Levereged IRR

10,00% $89.700 -$664.992 $30.375 -$31.798 -$304.990 -4,27% -15,90% 4,03% -42,89%

7.118 0,55

Internal Rate of Return IRR When you have an investment that creates differing amounts of annual cash flow, you need to determine your rate of return using the Internal Rate of Return (IRR). The formula for computing the IRR is very complicated but essentially IRR is the rate needed to convert (or discount or reduce) the sum of the future uneven cash flow to equal your initial investment or down payment. Return on equity (ROE) Measures the rate of return on the ownership interest (shareholders’ equity) of the common stock owners. It measures a firm’s efficiency at generating profits from every unit of shareholders’ equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are generally considered good. Cash-on-cash return In investing, the cash-on-cash return is the ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage. It is often used to evaluate the cash flow from income-producing assets. Generally considered a quick napkin test to determine if the asset qualifies for further review and analysis. Cash on Cash analyses are generally used by investors looking for properties where cash flow is king, however, some use it to determine if a property is underpriced, indicating instant equity in a property. Net Present Value The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

PROJECT FINANCES

1) Project Details

2) Project Financing

Rentable Space

Constuction Cost Cost for Const. Type #1 per Sq/ft Cost for Const. Type #2 per Sq/ft Cost for Const. Type #3 per Sq/ft Cost for Const. Type #4 per Sq/ft

# of Studio Rooms # of 1 Bed Room # of 2 Bed Room # of 4 Bed Room Total Number of Rooms Avg sq/ft of Studio Rooms Avg sq/ft of 1 Bed Room Avg sq/ft of 2 Bed Room Avg sq/ft of 4 Bed Room Total Residential Sq/Ft Restaurant + kitchen #1 (sq/ft) Leasable Space #2 (sq/ft) Leasable Space #3 (sq/ft) Leasable Space #4 (sq/ft) Leasable Space #5 (sq/ft) Leasable Space #6 (sq/ft) Total Non-Res Leasable Space (Sq/ft) Total Revenue Generating Sq/Ft

0 4 7 7 18 0 96 128,4 193,9 2640,1 631,8

0 0 631,8 3271,9

Constuction Sq/ft Shared spaces Type#1 (Sq/ft) Circulation + outdoor Type #2 (Sq/ft) studios Type #3 (Sq/ft) Construction Type #4 (Sq/ft) Total Constructed Sq/Ft Unrented Space Sq/Ft Percentage of unrentable Space rent per Month Studio Room per Sq/Ft 1 Bed Room per Sq/Ft 2 Bed Room per Sq/Ft 3 Bed Room per Sq/Ft Leasable Space #1 per Sq/Ft Leasable Space #2 per Sq/Ft Leasable Space #3 per Sq/Ft Leasable Space #4 per Sq/Ft Leasable Space #5 per Sq/Ft Leasable Space #6 per Sq/Ft Parcel Total Parcel Area Cost per Sq/Ft Land Floor to Area Ratio

Construction Cost Other Soft Costs Cost for Land Total Asset Cost

$690.113 $207.034 $249.130 $1.146.276

Personal Equity

0 3942,5

Debt (Principal Loan) Debt to Equity Ratio

Income (per Month) Studio Rent per Room 1 Bed Rent per Room 2 Bed Rent per Room 4 Bed Rent per Room Leasable Space #1 Rent Leasable Space #2 Rent Leasable Space #3 Rent Leasable Space #4 Leasable Space #5 Leasable Space #6 Gross Potential Income Vacancy Total Revenue

0 336 449,4 484,75 3474,9 0 0 0 0 0 11357,95 0% $11.358

Expenses (per Month) Building Expenses Additional Expenses Replacement Reserves Total Operating Expenses

$3.154 $3.000 $197 6351,125

$200.000

Investor #1 (Ryan) Investor #2 (Shaun) Investor #3 (Tim) Investor #4 (Matt) Investor #5 (Jingwei) Investor #6 (Jerryt) Investor #7 (Sumath) Investor #8 (Sky) Investor #9 (Jasper) Other Investors Total Investment Debt Financing

$4,00 $3,50 $3,50 $2,50 $5,50 $4,00 $4,00 $4,00 $4,00 $4,00

$175 $175 $175 $175

Financing (Equity)

1351,4 2591,1

670,6 17,01%

3) Income and Expenses

$80.000 $60.000 $75.000 $62.000 $100.000 $0 $75.000 $135.000 $110.000 $0 $897.000,00 249276,25

$249.276 22%

897000 Term of Loan in years Yearly Interest Number of Periods (By Month) Interest for Period (By Month) Interest per month over Compounded Debt Service (Monthly Payment to Bank)

30 7% 360 0,56% 7,42 $1.609

Income (per Month) Net Operating Income (NOI) Less Debt Service Before Tax Cash Flow Tax Rate (Simplified) Tax Payment Cash Flow After Taxes

6) Sale of Property at Year 10 Net Book Value Total Development Cost Replacement Reserve (Accumulated Depreciation) Net Book Value Capital Gain on Sale Sale Price Cap. Rate Sale Price (Sale Expenses) (Net Book Value) Capital Gain on Sale Tax Payment Accumulated Depreciation Depreciation Recapture Tax @ 25% Capital Gain in Excess of Depreciation

7.118 $35,00 0,55387 7493677 999

Capital Gains Tax @ 15% Total Tax Payment Net Proceeds from Sale Sale Price (Sale Expenses) (Payback to Investors) (Mortgage Loan Payoff) (Tax Payment) Net Proceeds from Sale

$5.007 $1.609 $3.398 35% $1.189 $2.209

$1.146.276 $23.655 -$250.950 $918.981 8,00% $915.494 -$45.775 -$918.981 -$49.262

$250.950 $62.738 -$300.212

-$45.032 $17.706 $915.494 -$45.775 -$697.000 -$124.638 -$17.706 $30.375

Connect with the neighborhood The density you can add to this neighborhood is limited. Creating a density with people who are all looking for jobopportunities, in a neighborhood where jobs already are limited, means you have to keep the impact of the program low. The program also has to add something to the neighborhood in order to stimulate and spark new initiatives in the neighborhood. Bringing new people to this neighborhood also means you have to attach to the neighborhood identity and the local people. People who, for example, already started urban farming on vacant plots. This temporary phase ic crucial to link this program to the neighborhood and create a small economy or social circle with the people who live there already. The urban farming, done on the plots in phase two, can be done with locals and could help to create a local food story. A story that ends on your plate in the restaurant. You create local grown vegetables, with an added value, because cooks turned it into a dish.

PHASE 3 Invest in public space and efficiency

PROJECT FINANCES

Investment

Total Investment Debt to Equity Ratio

Building Square Footage

Total Revenue Generating Sq/Ft Total Constructed Sq/Ft Unrented Space Sq/Ft Percentage of unrentable Space

Rent by Square Foot

Studio Room per Sq/Ft 1 Bed Room per Sq/Ft 2 Bed Room per Sq/Ft 3 Bed Room per Sq/Ft Leasable Space #1 per Sq/Ft Leasable Space #2 per Sq/Ft Leasable Space #3 per Sq/Ft Leasable Space #4 per Sq/Ft Leasable Space #5 per Sq/Ft Leasable Space #6 per Sq/Ft

Parcel

Total Parcel Area Floor to Area Ratio

$897.000 54% 7479,5 8150,1 670,6 8,23% $4,00 $3,50 $3,50 $2,50 $5,50 $4,00 $4,00 $4,00 $4,00 $4,00

Analytics

Promised Annual Rate of Return to Investors Annual Payment to Investors Net Present Value (NPV) Proceeds from Sale as Developer Yearly Profit as Developer Net Present Value (NPV) for Developer

Returns

Cash-on-Cash Return Return-on-Equity Unlevereged IRR Levereged IRR

10,00% $89.700 -$530.036 $120.217 -$50.347 -$343.954 -3,94% -25,17% 2,97% -31,42%

7.118 1,14

PROJECT FINANCES

1) Project Details

2) Project Financing

Rentable Space

Constuction Cost Cost for Const. Type #1 per Sq/ft Cost for Const. Type #2 per Sq/ft Cost for Const. Type #3 per Sq/ft Cost for Const. Type #4 per Sq/ft

# of Studio Rooms # of 1 Bed Room # of 2 Bed Room # of 4 Bed Room Total Number of Rooms

0 4 7 7 18

Avg sq/ft of Studio Rooms Avg sq/ft of 1 Bed Room Avg sq/ft of 2 Bed Room Avg sq/ft of 4 Bed Room Glasshouse farm area Total Residential Sq/Ft

0 96 128,4 193,9 2584,4 5224,5

Restaurant + kitchen #1 (sq/ft) Glasshouse unleasable#2 (sq/ft)

631,8 1623,2

Total Non-Res Leasable Space (Sq/ft) Total Revenue Generating Sq/Ft

2255 7479,5

Constuction Sq/ft Shared spaces Type#1 (Sq/ft) Circulation + outdoor Type #2 (Sq/ft) Glasshouse Type #3 (Sq/ft) Construction Type #4 (Sq/ft) Total Constructed Sq/Ft

1351,4 2591,1 4207,6 0 8150,1

Unrented Space Sq/Ft Percentage of unrentable Space

670,6 8,23%

rent per Month Studio Room per Sq/Ft 1 Bed Room per Sq/Ft 2 Bed Room per Sq/Ft 3 Bed Room per Sq/Ft Leasable Space #1 per Sq/Ft Leasable Space #2 per Sq/Ft Leasable Space #3 per Sq/Ft Leasable Space #4 per Sq/Ft Leasable Space #5 per Sq/Ft Leasable Space #6 per Sq/Ft Parcel Total Parcel Area Cost per Sq/Ft Land Floor to Area Ratio

$4,00 $3,50 $3,50 $2,50 $5,50 $4,00 $4,00 $4,00 $4,00 $4,00

3) Income and Expenses

Construction Cost Other Soft Costs Cost for Land Total Asset Cost

$175 $175 $150 $175 $1.321.253 $396.376 $249.130 $1.966.758

Financing (Equity)

Personal Equity

0 336 449,4 484,75 3474,9 6492,8 0 0 0 0 17850,75 0% $17.851

$200.000

$80.000 $60.000 $75.000 $62.000 $100.000 $0 $75.000 $135.000 $110.000 $0 $897.000,00 1069758,25

Debt Financing Debt (Principal Loan) Debt to Equity Ratio

$1.069.758 54%

897000 Term of Loan in years Yearly Interest Number of Periods (By Month) Interest for Period (By Month) Interest per month over Compounded Debt Service (Monthly Payment to Bank)

30 7% 360 0,56% 7,42 $6.903

Expenses (per Month) Building Expenses Additional Expenses Replacement Reserves Total Operating Expenses Income (per Month) Net Operating Income (NOI) Less Debt Service Before Tax Cash Flow Tax Rate (Simplified) Tax Payment Cash Flow After Taxes

Net Book Value Total Development Cost Replacement Reserve (Accumulated Depreciation) Net Book Value Capital Gain on Sale Sale Price Cap. Rate Sale Price (Sale Expenses) (Net Book Value) Capital Gain on Sale

Capital Gains Tax @ 15% Total Tax Payment Net Proceeds from Sale Sale Price (Sale Expenses) (Payback to Investors) (Mortgage Loan Payoff) (Tax Payment) Net Proceeds from Sale

$7.923 $6.903 $1.020 35% $357 $663

6) Sale of Property at Year 10

Tax Payment Accumulated Depreciation Depreciation Recapture Tax @ 25% Capital Gain in Excess of Depreciation

7.118 $35,00 1,14499 8595110 99

$6.520 $3.000 $408 9927,585

$1.966.758 $48.901 -$480.455 $1.535.203 8,00% $1.448.744 -$72.437 -$1.535.203 -$158.897

$480.455 $120.114 -$639.352

-$95.903 $24.211 $1.448.744 -$72.437 -$697.000 -$534.879 -$24.211 $120.217

Invest in public space and effciency The last project finalizes the local grown food story by making a glasshouse for foodproduction. The glasshouses will serve the restaurant and provides food for the restaurant throughout the year. The restaurant is not relying on seasonal grown crops only. Besides of that, the glasshouse a perfect way to convert organic waste in energy. Energy that comes from the surrounding plots, sewege and restaurant. The biodigester will create a new small closed economy within the neighborhood and creates an environment to grow crops. Next to the fact that it makes the homeless housing more energy efficient and neutral, the glasshouse also functions as a public garden during the day.

2 3.6

7.8

5.7

5 3.3

5.0

5.3

3.6

5.0

7.2

8.1

N 1:200 0 19

10m

N 1:200 0 21

10m

Plot 4 151,2 m2

Plot 3 162,9 m2

Total 661,2 m2

Plot 2 168,9 m2

Plot 1 178,2 m2

Circulation 47,4 m2

Field 2 214,5 m2

Field 2 25,6 m2

Digester/ installation 14,7 m2

Storage 6,2 m2

Storage 26,60 m2

Stairs 6,75 m2

Bedroom employee 11,8 m2

Toilets 7,5 m2

Kitchen+ storage 11,7 m2

Office 9 m2

240.1 m2 farming 2584.4 sq ft

Circulation 53,5 m2

390.90 m2 4207.60 sq ft

Kitchen 11,5 m2

Circulation 94,5 m2

Office 13,5 m2

Restaurant 34 m2

150.8 m2 public 1623.2 sq ft Circulation 62,5 m2

N 1:200 0 23

10m

EXCHANGE WITH THE NEIGHBORHOOD

low priced food

low priced food work low priced food food education

leisure community center

food for poor and homeless people

glass house

existing urban farming initiatives (seasonal) supply & delivery product sale

supply & delivery product sale

restaurant $

food bank

school

customers

shops

neighborhood customers

Neighborhood economics are essential for the program. The new relations between all the involved actors in the area explained in the graphic above. The restaurant and the glasshouse form a new community center where several things come together. Food connects people in a social way, but in this case the restaurant is also the missing piece in the existing urban farming. A social happening where the biggest profits can be made, especially when you have the food production also in you won hands. School programs, neighborhood programs, shops, community centers can all contribute to this program. Partly educational, partly profitable. Next to this new food economy, the existing environment and buildings can be used more intense. Schools are maybe only used during day times and could provide a perfect study environment after 5 pm. Big businesses and public buildings could exchange heat for instance or donate electricity to the homeless program. Donations can also be done with offering supplies or generating electricity for example. Services and materials is what youngsters really need. Furniture, books, clothing etc. can all help to save money. It could be helpful to think of new smart collectives and connections to save costs and expenses.

OPTIMIZING THE BUILDING AND EFFICIENCY

housing 46 persons

restaurant 20 costumers

kitchen

solar energy

electricity grid green waste sewage

rental housing big institutions business

green waste sewage

heat exchange grid

private owned housing

water grid

green waste

glasshouse school

existing urban farming initiatives (seasonal)

The new building is not only connecting people, but is also creating new collaborations in between several businesses. It creates a new type of economy, the economy of energy and waste. The biodigester is the new epic center of this economy. Neighbors can sell their waste or make a deal with the decentralized power station. When there is an overproduction of electricity, the energy can be sold to the grid. The price of energy differs every day and can even be higher on peak moments during the day. Waste and gas is storable, so when the electricity prize on a certain moment is going up, the energy can be sold for a relatively higher price. During this moment, the own consumption of energy should be reduced.

Restaurant and housing

biodigester

housing 46 persons

kitchen restaurant 20 costumers

MH4

collector

gastank

biodigester

CO 2

An institution that is partly relying on public money, subsidies and donations should use new smart inventions to lower the costs and find a new economy in its own waste. Maybe the direct environment could support the building and youth program not in a financial way only, but also with material donations or smart cooperations like heat exchange. Using existing infrastructure in the neighborhood is crucial to save costs and to transport new energy streams and optimization of exchanges.

2 3.6m

7.5m

0.75m 0.43m

3 7.8m

4 5.7m

5 3.3m

4 3.3m

7.5m

0.75m 0.43m

5.7m

7.8m

3.6m

PROJECT OVERVIEW Impact and social mandate

Phase 0

$70.000

Buy the plot The investment for the first plot will be around the 70.000 dollars. The plot on the corner is probably the plot with the most value because of its position, visibility and accessibility on multiple sides. A possible building on this location has the benefit that it can develop and expand in two directions. It is an interesting corner to make a statement or build a public function. A commercial or public function next to the housing program would fit the location well.

Phase 1

$900.000

Priority

Total costs

$970.000

The first phase of project is to create housing units, a study environment and place to work or generate a basic income. The basic needs of homeless people is to have shelter, safety, sanitation and food. But during the program they will also have opportunities to develop themselves with study and work. They need to work on their education and resumĂŠ in order to make the next step in their life. The program gives the opportunity to make a start in their career and bear the costs of their living expenses.

Phase 2

$180.000

Connect with the neighborhood

Total costs

$1.150.000

The density you can add to this neighborhood is limited. Creating a density with people who are all looking for job opportunities, in a neighborhood where jobs already are limited, means you have to keep the impact of the program low. The program also has to add something to the neighborhood in order to stimulate and spark new initiatives in the neighborhood. Bringing new people to this neighborhood also means you have to attach to the neighborhood identity and the local people. People who, for example, already started urban farming on vacant plots. This temporary phase ic crucial to link this program to the neighborhood and create a small economy or social circle with the people who live there already. The urban farming, done on the plots in phase two, can be done with locals and could help to create a local food story. A story that ends on your plate in the restaurant. You create local grown vegetables, with an added value, because cooks turned it into a dish.

Phase 3

$631.000

Invest in public space and efficiency

Total costs

$1.781.000

The last project finalizes the local grown food story by making a glasshouse for food production. The glasshouses will serve the restaurant and provides food for the restaurant throughout the year. The restaurant is not relying on seasonal grown crops only. Besides of that, the glasshouse a perfect way to convert organic waste in energy. Energy that comes from the surrounding plots, sewage and restaurant. The biodigester will create a new small closed economy within the neighborhood and creates an environment to grow crops. Next to the fact that it makes the homeless housing more energy efficient and neutral, the glasshouse also functions as a public garden during the day. 43

PROJECT IMPACT ON SOCIAL MANDATE

Roxbury On the scale of the neighborhood the impact is of course much bigger. Providing homes for 46 people will solver 19% of the registered homel essness for this specific group in this neighborhood.

Boston This projects provides dormatories for 46 homeless youngsters. But providing homes and maybe jobs for 46 young adults means that just 2% of the whole problem is solved. The program should have a more structural and bigger impact to help help more people.

NEED FOR PROJECTS

Roxbury On the scale of the neighborhood you will need another 10 projects to cover all the homeless people of this specific age in Roxbury.

Boston When this program becomes a standard (not necessarily in the architectural way shown here) the program needs to be multiplied 37 times to help all the registered homeless young adults in the streets of Boston. The public investment for this project will be enormous, 37 million dollars at least, but the public output and value Boston can create with investing in young people will be bigger than 37 million. People will experience a safer public space, people a less vulnerable and the program helps youngster to stand on their own feet instead of living from public money and gifts.

SPREAD AND IMPACT AREAS OF PROJECTS

Boston The diagram shows that every project has its own impact area. An area where new people will live and create a new life. Decentralization is important to cover the whole city with a program like this, and make homeless youngsters able to continue their lives close to where they lived before. Decentralization makes the program accessible throughout the city and contributes to the idea of creating a big campus throughout the city. This project can also contribute to the redistribution of people in the city to lower the impact of creating new densities the city. Upscaling this program and raise the number of people per project would also mean you add more job seekers to a certain area. It will decrease the chance to work and study local because of the competition with more job seekers in the same area. People possibly have to travel farther away for a job, what will impact their living expenses. The impact of this building, with 50 new people, will be bigger in a suburban area than in a more urban neighborhood. The circa 50 jobless people who come to the new neighborhood will influence the availability of jobs in the direct area. That is 48

why it could be smarter to act local in with small manageable numbers not bigger than 50 people per location. In this way the youngsters can attach faster to local initiatives or start their own local initiatives. It increases the chance of creating jobs and connect with local business where homeless could apply for a job. It also creates a diversification and specializations per location in the city. Youngsters can for example pick a location by its business or educational specialism. It makes them able to apply for a location that offers a program close to their personal interest and ambitions. Acting local, and working closely together with local business could be a key to make a to bring the youngsters and this program to a next level. By helping them to build a resume, learning a profession and financing themselves to study. The youngsters will gradually be more responsible for their own living expenses and become self sufficient. It is not a passive homeless housing program, but a proactive program. A program that goes hand in hand with local schools and local businesses. Together all separate buildings will form a big campus the city. A decentralized campus close to the people and always within reach for people who seek help. 49

APPENDIX Studies and

PROGRAM AND TYPOLOGY STUDIES

Boston Architecture College Jerryt Krombeen, urbanism

info@jerryt.nl www.jerryt.nl