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IRS Releases Population Figures
On May 3, the IRS published the 2018 Calendar Year Resident Population Figures, which are used by state and local housing credit agencies that allocate Low-Income Housing Tax Credits and housing bonds to calculate population-based credit ceilings, volume caps and volume limits. For Calendar Year 2018, the amount for calculating the credit ceiling is the greater of $2.70 multiplied by the state population, or $3,105,000. The amount for calculating the volume cap calendar year 2018 is the greater of $105 multiplied by the state population, or $310,710,000. To find the population figures, click on the Web Link below.
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Industry Trends
"LIHTC Property Performance Improves"
Tax Issues and Tax Reform
"Study Examines How Living in LIHTC Properties Impacts Residents"
Congress
"Capitol Hill Insiders: More Work Needed for Affordable Housing"
"From Senators, Pessimism on Housing Reform"
HUD-Related Activity
"What RAD for PRAC Means for Affordable Housing for Older Adults"
State and Local Activities
"To Maximize Affordable Housing, Increase Collaboration Between Public and Private Sectors"
"The Seattle Area Is Solving One of Housing's Biggest Challenges"
Association News
Register for Emerging Trends in Tax Credit Webinar
NAA Apartmentalize Conference in San Diego, June 13-16
NAAEI Offers Updated Fair Housing Course Online
2018 Q1 Apartment Jobs Snapshot
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
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Industry Trends
LIHTC Property Performance Improves
Affordable Housing Finance (05/15/18)
A new report by CohnReznick reveals that Low-Income Housing Tax Credit (LIHTC) properties continue to improve on their performance. LIHTC portfolios, on a median basis, had a 97.9 percent occupancy rate, a 1.40 debt-coverage ratio (DCR), and a $688 per-unit per annum net cash flow in 2016, the firm reports. It recently examined data collected from about 23,000 properties with nearly 1.7 million LIHTC apartments. The strength of LIHTC properties can also been seen in a foreclosure rate that continues to be below 1 percent. CohnReznick has also launched its new LIHTC Interactive Study by County, an online tool to access and compare affordable housing data down to the county level. "With more than 20,000 properties analyzed in an annual report along with an interactive online platform, these tools give significant resources to investors, developers, and others involved with LIHTC properties," says Beth Mullen, partner and leader of CohnReznick's affordable housing practice. The high physical occupancy rate for LIHTC apartments confirms the pent-up demand for affordable housing in virtually all parts of the country, according to the firm. CohnReznick also reported, "National median DCR historically hovered around 1.15 between 2000 and 2008, increased to 1.21 in 2009, and has taken off since then. As a result, the national median DCR was 1.40 in 2016, representing another high-water mark for the asset class."
Tax Issues and Tax Reform
Study Examines How Living in LIHTC Properties Impacts Residents
Apartment Finance Today (05/11/18) Kimura, Donna
Low-Income Housing Tax Credit (LIHTC) residents and their experiences are the focus of new research by the Terner Center for Housing Innovation at the University of California at Berkeley. The Terner Center interviewed and surveyed more than 250 residents living in 18 family properties in lower- and higher-poverty neighborhoods in California. Nearly 90 percent of residents reported that their housing had improved after moving into a LIHTC development. The report reveals that 85.4 percent said that they thought their current rent was affordable, while only 6.9 percent said that they felt their rent was too high. Fifty-eight percent of working-age LIHTC residents were employed, approximately half were working full time and about half of the working residents earned less than $35,000 a year, with 20 percent earning between $35,000 and $50,000, and 10 percent making more than $50,000. “More than a third of respondents had lived in their LIHTC unit for more than nine years, and just over half of respondents (54 percent) were the original residents of the building from when it opened its doors," says Carolina K. Reid, the report's author and faculty research advisor at the Terner Center. “LIHTC is thus providing deep and long-term subsidies to some households, but it is unlikely that these residents will ever have the significant wage growth needed to move out and open up the unit to someone new.” This raises the question how do we ensure there are enough affordable units for new families that need them but also calls attention to the need for more of those middle-rung units, adds Reid.
Congress
Capitol Hill Insiders: More Work Needed for Affordable Housing
Apartment Finance Today (05/02/18) Serlin, Christine
Congress passed an omnibus spending bill in March that included the first expansion of the Low-Income Housing Tax Credit (LIHTC) program in over a decade, increasing the housing tax credit by 12.5 percent over the next four years. The bill also included income-averaging indefinitely to allow for the 60 percent area median income ceiling to apply to the average of LIHTC units in a development. In addition, the Department of Housing and Urban Development saw a 10 percent increase over fiscal 2017 funding and some beneficial policy initiatives, such as the Rental Assistance Demonstration cap being lifted and expanded to Sec. 202 properties with Project Rental Assistance Contracts to preserve elderly housing as well as the extension of the Family Self-Sufficiency Program. However, David Gasson, executive director of the Housing Advisory Group and vice president at Boston Capital, notes, "The omnibus got us 10 percent of what we lost in tax reform." In recent weeks, meanwhile, several new members have joined as co-sponsors of two bills: the Affordable Housing Credit Improvement Act—H.R. 1661 and S. 548, the latter alone having 22 provisions. The industry is still looking for a 50 percent increase in the LIHTC, the 4 percent floor, and other smaller provisions. To update the Community Reinvestment Act (CRA), the Treasury Department has released a set of recommendations to primary regulators addressing banks' assessment areas, improving clarity and flexibility for CRA performance evaluations, improving the process and timeliness of the evaluations, and re-evaluating penalties for nonperformance.
From Senators, Pessimism on Housing Reform
MBA NewsLink (04/25/18) Sorohan, Mike
Senators from both parties are growing increasingly pessimistic over the likelihood that Congress can pass comprehensive housing reform legislation this year. Senate Banking Committee Chairman Mike Crapo (R-Idaho) said the Senate and House are capable of moving "quickly" on housing finance reform, but he warns the slow pace of action in Congress makes it more likely that such legislation continues to face barriers. "I know there is support for Johnson-Crapo," he said, referring to the housing finance reform bill he co-wrote with former Sen. Tim Johnson (D-S.D.) "But the next step is always difficult." Crapo said he is aware of actions the Trump Administration could take to make some broad secondary market reform happen administratively. "And I am open to that," he said. "But I have not seen anything from the Administration that suggests this will happen any time soon." Sen. Bob Menendez (D-N.J.), a member of the Banking Committee, said financial reform faces an "uphill battle" in Congress and expressed concerns over efforts to "take an axe to Fannie Mae and Freddie Mac and to provide no government backstop for conventional loans.
HUD-Related Activity
What RAD for PRAC Means for Affordable Housing for Older Adults
Affordable Housing Finance (05/09/18) Couch, Linda
Preserving existing affordable housing is essential as well as expanding its supply. The Department of Housing and Urban Development’s (HUD) Sec. 202 Supportive Housing for the Elderly homes serves older adults with average incomes of $13,300. Nationwide, just over 130,000 older adults live in Sec. 202 housing built using HUD’s Project Rental Assistance Contracts (PRAC) subsidies, which became available in 1990. As of 2017, there are 125,141 PRAC-subsidized apartments in use, according to HUD. Prior to late March, PRAC-subsidized Sec. 202 property owners had limited options to pay for capital improvements to their buildings, such as a new roof or HVAC system. The enactment of the fiscal 2018 omnibus spending bill on March 23, gave HUD the authority to include PRAC-supported properties in its Rental Assistance Demonstration (RAD) program. Without the ability to recapitalize using Low-Income Housing Tax Credits (LIHTCs) or other traditional types of financing, "we had no long-term preservation strategy," says Megan Kelley, vice president of public policy and government relations at National Church Residences, one of the largest owners and operators of PRAC-subsidized Sec. 202 residences, with just over 5,000 owned and/or managed PRAC apartments around the country. Samantha Pearce, director of housing and sustainability for Selfhelp, says, "Funding through RAD allows us to maintain affordability to our seniors and still operate our property."
State and Local Activities
To Maximize Affordable Housing, Increase Collaboration Between Public and Private Sectors
Gotham Gazette (05/08/18) Milstein, Jolie
New York state's recently-passed budget demonstrates how public officials can advance smart, pro-housing policies, writes Jolie Milstein, president and CEO of the New York State Association for Affordable Housing (NYSAFAH). This approach in crafting public policy was driven by an ongoing dialogue between the public and private sector. In addition to advancing New York state’s multi-billion-dollar commitment to financing affordable housing construction and preservation, the new budget includes case studies that show the benefits of increasing collaboration. The state approved changes that will allow builders of affordable housing to utilize State Low-Income Housing Tax Credits (SLIHTCs) separately from federal LIHTCs. Previously, those credits could only be used together, even after recent federal tax cuts led to a devaluation in federal credits that made it harder to finance low-income housing. The initial state budget proposal included a provision that would have deferred the use of several different credits—which play a crucial role in the production of affordable housing—for at least the next three years, and devalue the credits for a far greater period. NYSAFAH and other stakeholders held conversations with state officials that led to a successful outcome: the tax credits were preserved and the affordable housing pipeline will continue to produce homes for low-income New Yorkers.
The Seattle Area Is Solving One of Housing's Biggest Challenges
Slate (05/15/18) Gale, Rebecca
The King County Housing Authority (KCHA) in Washington is purchasing and rehabilitating properties in higher-opportunity neighborhoods in the Seattle area as a way to sustain affordable housing options for low-income families. The housing authority can afford to purchase homes because it has a top bond rating, it's backed by King County itself, and is part of the "Moving to Work" demonstration program with the U.S. Department of Housing and Urban Development, which provides additional flexibility in spending money and future planning. Higher-opportunity neighborhoods are typically defined as neighborhoods with less poverty. A landmark paper on the "Moving to Opportunity" program in 2015 showed that the economic and social gains are dramatic for children who moved before the age of 13. KCHA, which has more than 5,000 homes in higher-opportunity neighborhoods, is targeting families with children who are 12-years-old and younger. Other housing authorities, like Columbus, Ohio, and San Diego, are also examining the acquisition of properties as a way to maintain long-term affordability, says Sunia Zaterman, executive director of the Council of Large Public Housing Authorities. The National Housing Trust is also purchasing housing in high-opportunity areas to allocate units for voucher holders.
Association News
Register for Emerging Trends in Tax Credit Webinar
Join the experts on May 23 beginning at 2 p.m. Eastern to learn how impressing your investor and monitoring agents will impact the future of your housing credit property.
The webinar will provide 1.5 hours of instruction, followed by a 30-minute question-and-answer session. It is presented by Heather Staggs, CPO, FHC, SHCM, president of S.T.A.R. Momentum Compliance Consulting Inc.; and Deborah Gershen, NAHP-e, FHC, SHCM, vice president of Moderate Income Management Company Inc.
It is free to current SHCM certified professionals and $109 for non-SHCM professionals. Be sure that you renewed your SHCM credential in 2017 in order to participate in this webinar free of charge.
For questions about your renewal, contact Natasha Patterson, ACA, from NAHMA, at npatterson@nahma.org or 703-683-8630, ext. 117. For registration issues, contact Amy Allen, from NAA, at AAllen@naahq.org or by phone 703-797-0608.
To register for this course, click the Web Link below.
NAA Apartmentalize Conference in San Diego, June 13-16
Apartmentalize, the industry's premiere event, is just weeks away. Inspiring speakers, Mike Rowe of Dirty Jobs fame; Alex Rodriguez, three-time New York Yankee Most Valuable Player; and Shabnam Mogharabi, CEO of SoulPancake; along with targeted education sessions and networking opportunities make this a can't miss event. For more information about the event, click on the Web Link below. To register visit, https://www.naahq.org/apartmentalize/register.
NAAEI Offers Updated Fair Housing Course Online
The NAA Education Institute and Institute of Real Estate Management launched an updated Fair Housing and Beyond online course in April. This course offers three continuing education credits.
You will learn about:
- Classes protected under federal anti-discrimination law
- State or local government protections
- Difference between “differential treatment" and "disparate impact"
- Defining “reasonability” for reasonable accommodations
- Latest in fair housing issues including emotional support animals
To purchase, click on the Web Link below.
2018 Q1 Apartment Jobs Snapshot
NAAEI brings you a new monthly product: The Apartment Jobs Snapshot, which highlights labor force trends in the rental housing industry. It examines total job posting trends by position and geography as well as average salaries, time required to fill a position and the top skills found in job postings.
For more information, click on the Web Link.
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
NAA Apartmentalize
June 13-16, 2018
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NAHMA Fall Meeting
October 21-23, 2018
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LeadingAge Annual Meeting and Expo
October 28-31, 2018
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