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HUD to Host Lead Hazard Control NOFAs Webinar
On Feb. 23 at 2 p.m. Eastern, the Department of Housing and Urban Development’s Office of Lead Hazard Control and Healthy Homes will be hosting a webinar on the fiscal year 2017 Lead Hazard Control Notices of Funding Available (NOFAs). The purpose of the presentation is to provide an overview of the FY 2017 Lead-Based Paint Hazard Control and Lead Hazard Reduction Demonstration NOFAs. The presentation is being provided to increase awareness of the funding opportunities available and provide general information on the application process to potential applicants. To register, click on the Web Link below.
Industry Trends
"LIHTC Allocating Agencies Respond to Equity Market Disruption"
"Aging in Place: The Value of Senior Housing"
Tax Issues and Tax Reform
"In the Tax Reform Debate, Congress Must Consider Affordable Housing"
"How Tax Reform Speculation Is Already Hurting Affordable Housing, and How Ben Carson Can Help"
State and Local Activities
"Trump Policies Could Threaten Pittsburgh's Low-Income Housing Efforts"
"Chicago’s Regional Housing Initiative Is Streamlining Affordable Housing Development"
"Scott Walker's Budget Would Limit Low-Income Tax Credits to Those Who Work"
Association News
Save the Date: Online SHCM Course
Register for NAA’s June Conference
‘REWIND’ NAA Educational Sessions
Own Multifamily Housing: The Essential Industry Text
NAHMA Releases 2016 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
LIHTC Allocating Agencies Respond to Equity Market Disruption
Notes from Novogradac (01/23/2017) Shelburne, Mark
In the aftermath of last fall’s presidential election, the low-income housing tax credit (LIHTC) equity market is experiencing significant disruption. While demand for LIHTCs continues to be strong, current concerns involve pricing, delayed closings, and less equity in deals that are closing. Some states' LIHTC allocating authorities are amending qualified allocation plans (QAPs). In California, the state's rules contain penalties when past years' awards do not meet certain benchmarks relating to closing equity. Because of the unpredictable nature of recent delays, the state's LIHTC agency is "extending the readiness deadlines for first and second round projects by three and two months, respectively." Not meeting these extended deadlines will result in losing an allocation, but not being penalized with negative points on future applications. In Massachusetts, the agency is monitoring LIHTC developments with prior awards that now are in the closing process, with several developers experiencing pricing issues. At this point the agency is not planning to set-aside LIHTCs to resolve shortfalls, but rather will work through the developments as investments reach a critical point. Appropriated sources, increased deferred fee, and local funds may be part of the solution. North Carolina's agency has proposed a QAP amendment that, if approved, would allow owners to return their 2016 allocation for more 2017 LIHTCs, and reconsideration will not take into account increased uses. In addition, allocations above the 2016 amount will count towards the developer's 2017 award limit, and the deferred developer fee must remain and be a minimum of 25 percent. Requests submitted "without a firm equity commitment will assume an equity price of $0.90," and the maximum additional allocation will be $100,000 in annual LIHTCs.
Aging in Place: The Value of Senior Housing
Commercial Property Executive (02/01/17) Janisse, Flynann
As baby boomers age, senior housing will continue to be a valuable commercial real estate investment class with significant potential for a high return on investment (ROI). However, developing or owning senior housing facilities requires significant knowledge of housing, seniors’ needs, and the health care industry. Just as the preservation of senior housing is critical, the preservation of quality, affordable senior housing is also crucial. The low-income housing tax credit (LIHTC) is a key program providing funds to senior housing properties. Recently, the U.S. Department of Housing and Urban Development (HUD) announced a $15 million program to select owners of HUD-assisted senior housing to help low-income seniors delay or avoid the need for a nursing facility. HUD's program will cover costs related to connecting the elderly with the supportive services they need to maintain independent living. Much like other multifamily communities, identifying development partners with proven expertise in the asset type can maximize future ROI. This includes identifying property management, on-site staff, and service providers who understand the needs of senior residents. Services provide a value-add to residents, and are often encouraged by state-qualified allocation plans, such as the Missouri Housing Development Commission, for tax credits. Service-enriched housing programs subsequently bring stability to the tenant base, ultimately improving the bottom line and the resulting ROI of the asset.
Tax Issues and Tax Reform
In the Tax Reform Debate, Congress Must Consider Affordable Housing
The Hill (02/06/17) Vogel, John
John Vogel, an adjunct professor at the Tuck School of Business at Dartmouth College and an associate faculty director for the school’s Center for Business, Government & Society, calls on Congress to consider affordable housing as it takes up tax reform. "While lowering tax rates and eliminating tax breaks may be helpful in many areas," he notes, "it does little to help low-income families that need housing." Vogel admits he was initially a skeptic of the low-income housing tax credit (LIHTC), believing this funding mechanism was inefficient and wasteful. However, he says the LIHTC program is delivered efficiently and used effectively. "Today, when these tax credits become available, states receive applications from quality projects for double or triple the amount available," Vogel points out. According to a study published by the Office of the Comptroller of the Currency, for those affordable housing properties placed in service between 1997 and 2010, the foreclosure rate was less than 1 percent. The housing stock funded with the tax credit has also been better built and better maintained than housing financed through other subsidy programs, in part because the returns to investors come over time rather than upfront. "When tax reform starts and this program is analyzed, Congress should carefully consider the hidden cost of replacing LIHTC," concludes Vogel. "It takes significant time and money to build the infrastructure of consultants and specialized companies in order to make a program like this one run smoothly."
How Tax Reform Speculation Is Already Hurting Affordable Housing, and How Ben Carson Can Help
Bisnow (02/09/2017) Banister, Jon
Real estate finance experts say uncertainty over the Trump administration's tax proposals is already hurting affordable housing development. Reducing corporate tax rates would bring down investor demand for the low-income housing tax credit (LIHTC), the main driver of affordable housing development, which would reduce the value of the credits. Speculation around these impending tax cuts has already caused credits to be priced 15 percent to 20 percent lower, DC Housing Finance Agency executive director Todd Lee said, speaking at Bisnow's Sixth Annual DC Region Affordable Housing event. He added, "There have been some deals we’ve been working on for a number of months that post-election didn't work when it used to work. The gap was a little bit wider." Telesis general counsel David Godschalk said this gap makes it harder to finance projects and will have a major impact on affordable housing supply. With fewer deals able to get done, Hunt Mortgage vice president Kristofor Peterson said it becomes important to prioritize the most vital ones. Developers suggested ways to help alleviate this problem. Dantes Partners managing principal Buwa Binitie said the Department of Housing and Urban Development (HUD) should reform how it designates difficult development areas for LIHTC purposes in relation to Qualified Census Tracts. "We're in neighborhoods now where we are no longer in the qualified census tract, which doesn't make sense," Binitie said. "That's one of the big things we've been pushing on a national level, to get HUD to realize this is a simple fix for which they could really help us secure additional resources." Montgomery Housing Partnership president Robert Goldman said HUD nominee Ben Carson "should really be advocating for the [LIHTC] tax credit program."
State and Local Activities
Trump Policies Could Threaten Pittsburgh's Low-Income Housing Efforts
Pittsburgh Post-Gazette (02/14/17) Belko, Mark
Kevin Acklin, chief of staff of Pittsburgh Mayor Bill Peduto and the city's Urban Redevelopment Authority board chairman, says reductions in the low-income housing tax credit (LIHTC) market could hurt plans to create thousands of affordable rental units in the city. "If we don't continue these programs, we're going to see a lot of displacement, a lot of gentrification, and people being pushed out of their communities," Acklin warns. The city is currently looking for ways to finance an affordable housing trust fund to supplement federal investments. In December, city council voted to establish a dedicated trust fund for affordable housing, with a goal of raising $10 million a year to support it. One option under consideration is a proposal to raise the 4 percent deed transfer tax by as much as 1 percentage point. Acklin acknowledges that the fund itself is not going to "make a significant dent" in achieving the investments that the city wants to make. It is intended to supplement the federal investments, not be a substitute for them, he says. Meanwhile, an expectation of reduced corporate taxes has lowered the market value of the tax credits, which could lead to gaps in financing for affordable housing developments, Acklin says. A project that could be affected is the redevelopment of the former Civic Arena site in the lower Hill District. The team and its developer McCormack Baron Salazar have been facing a $5 million funding shortfall in the $45 million first phase. The city has been encouraging them to investigate LIHTCs as a means of filling the gap.
Chicago’s Regional Housing Initiative Is Streamlining Affordable Housing Development
The Architect's Newspaper (02/02/17) Messner, Matthew
Ten housing authorities across the Chicago region and the city's Regional Housing Initiative (RHI) are working to distribute affordable housing vouchers. Also participating in the effort are such administrative bodies as the Metropolitan Planning Council, the Illinois Housing Development Authority, BRicK Partners, and the Chicago Metropolitan Agency for Planning. The Regional Housing Initiative is now actively looking for developers interested in applying for rental assistance vouchers to help finance new projects. By pooling a portion of their allotted federal rental assistance vouchers, the participating housing authorities can better support the changing needs of those in need of affordable housing. Since its founding, the RHI has helped with the development of 500 apartments in 33 developments in 22 different communities. This has been achieved by matching developers with voucher holders to ensure new developments have tenants. One of the main goals of the RHI is to help developers build in low-poverty, high-opportunity communities with a goal of providing tenants with better access to civic amenities and job opportunities. The rental assistance vouchers are part of the federal Housing and Urban Development's Section 8 Housing Choice Voucher Program. These vouchers are distributed to families whose income does not exceed 50 percent of the median income of the area. In Chicago, the vast majority of affordable housing being built is done by private developers as part of mixed-income developments.
Scott Walker's Budget Would Limit Low-Income Tax Credits to Those Who Work
Milwaukee Journal Sentinel (02/13/17) Stein, Jason
Wisconsin Gov. Scott Walker's proposed budget calls for able-bodied adults below age 62 to earn money to claim the state's Homestead Credit, a low-income housing credit, starting in 2018. Seniors and people with disabilities would be exempt from the requirement. The Homestead program is a credit on income tax returns for qualifying homeowners and renters. Walker also would limit the credit so that workers would need to earn a certain level of income to get the full value from it. Those changes would decrease payments under the credit by $12.2 million in the second year of the two-year budget. Walker is also proposing to link the Homestead Credit to inflation so it would rise along with the cost of goods and services. The Homestead Credit gave about $98.4 million to 191,500 low-income claimants in 2015, for an average credit of $514. The budget also would return more than $20 million a year to the Earned Income Tax Credit and prevent people from receiving both the Earned Income or Homestead Credits if they had business losses of larger than $15,000 a year. This change, which would not affect small farms, would reduce the credit by $2.6 million over the next two years. Walker's bill would also place new limits on a tax credit program for developers who renovate historic buildings. Those new requirements would decrease state tax credits by $17.1 million over the next two years.
Association News
Save the Date: Online SHCM Course
Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification in four online sessions, or brush up on your housing credit compliance knowledge. Each webinar will last for approximately two hours, followed by a question-and-answer period for attendees. The webinars take place on consecutive Tuesdays: April 4, 11, 18 and 25, and each begins at 12 p.m. Eastern.
The cost for the course, including the SHCM exam and SHCM application fee, is $599; National Apartment Association Education Institute (NAAEI) designates will receive a $50 discount for the entire course. Individual webinars can be purchased for $109 each. To register, click the Web Link provided below. For more information about the SHCM program, visit https://www.naahq.org/education-careers/credentials/shcm.
Register for NAA’s June Conference
It's time to “Apartmentalize,” which means taking your career, your company and the experience your residents receive to the next level. Achieve greater success in all three areas by joining the National Apartment Association (NAA) in Atlanta to attend the apartment industry's premiere event—the 2017 NAA Education Conference & Exposition. Learn from world-class speakers and industry experts, network with nearly 10,000 of your peers, and get access to innovative products and services from more than 450 top suppliers. For more information clink on the Web Link provided.
‘REWIND’ NAA Educational Sessions
Preorder audio and video recordings for the education sessions from various NAA conferences, such as the Education Conference & Exposition and the Student Housing Conference & Exposition.
REWIND does not include general sessions, Kick Starters or Game Changer sessions. Click on the Web Link for more information.
Own Multifamily Housing: The Essential Industry Text
Multifamily Housing: The Essential Industry Text has been developed as a definitive reference and interactive guide aimed at expanding the knowledge of multifamily professionals and as a complement to “on-the-job” experience for investors, developers, owners, managers, consultants and suppliers. As college students consider the apartment industry as a viable career option or choose to earn degrees in property management or real estate, this text offers a single source with best practices, uniform guidelines and standardized operational procedures, complete with a comprehensive glossary and industry terminology. Click on the Web Link below to purchase a copy.
NAHMA Releases 2016 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its 2016 Affordable 100—a list of the 100 largest affordable multifamily property management companies ranked by affordable unit counts—is available on its website, click Web Link below, as well as in the June issues of Affordable Housing Finance magazine and Units magazine. The NAHMA website version expands the list to the top 120 largest multifamily property management companies. In addition, the online version presents two specialty lists: the 25 largest housing credit (LIHTC) property management companies and the 25 largest Rural Development program property management companies.
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The three national associations sponsoring the Specialist in Housing Credit Management® (SHCM®) certification program invite your company to become a Specialist in Housing Credit Management® Company, a corporate designation created specifically to honor management companies that successfully maintain a significant portion of their properties and staff to the high standards of the SHCM certification program.
The SHCM program, developed especially for management companies involved with properties developed and operated under the Low-Income Tax Credit (LIHTC) program, is sponsored by the National Affordable Housing Management Association (NAHMA), the National Apartment Association Education Institute (NAAEI), and LeadingAge.
Earning the SHCM Company designation publicly demonstrates that a company is among the finest managers of LIHTC housing in the industry.
For more details on how to become a SHCM Company, click on the Web Link below.
Upcoming Events
NAHMA Federal Affairs Issues (Winter) Meeting
March 5-7, 2017
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Leading Age PEAK Leadership Summit
March 19-22, 2017
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NAA Education Conference & Exposition
June 21-24, 2017
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NAA MAXIMIZE: Multifamily Asset Management Conference
October 2-4, 2017
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NAHMA Regulatory Issues (Fall) Meeting
October 22-24, 2017
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LeadingAge 2017 Annual Meeting & EXPO
October 29-November 1
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