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CDC Eviction Moratorium Still in Effect
According to The Hill, on May 14, U.S. District Court Judge Dabney Friedrich issued a stay for her May 5 ruling striking down the Centers for Disease Control and Prevention (CDC)’s eviction moratorium finding that it was an overreach of the government’s authority. The stay keeps the moratorium in place pending the outcome of the appeal. “In granting the emergency stay, Friedrich said the CDC’s ‘strong interest in controlling the spread of COVID-19 and protecting public health’ outweighed other factors, including the potential loss of revenue to landlords,” according to The Hill article. The government’s appeal of Friedrich’s decision is pending before the U.S. Court of Appeals for the D.C. Circuit Court. In the meantime, the moratorium is currently scheduled to expire at the end of June. To read the judge’s stay, click the Web Link provided.
Tax Issues and Tax Reform
"How the Affordable Housing Tax Credit Improvement Act Would Affect QAPs"
"Extra Credit for Affordable Housing Finance"
Congress
"Financing the Low-Income Housing Tax Credit"
Industry Trends
"Social Impact Investors Target Naturally Occurring Affordable Housing"
"HUD LIHTC Tenant Report Highlights 47 Percent of LIHTC Residents Earn at or Below 30 Percent AMI"
Green Building
"Going Green a Win-Win for Affordable Housing"
"New Energy Efficiency Codes Set Path Toward Green Buildings"
Association News
Register for Emerging Trends in Tax Credit Webinar
Reserve Your Place for NAHMA’s Virtual Leadership Training Series
There’s Still Time to Enter the Vanguard Awards
Time to Start Your COQ Award Application
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Tax Issues and Tax Reform
How the Affordable Housing Tax Credit Improvement Act Would Affect QAPs
Novogradac (04/26/2021) Shelburne, Mark
The proposed Affordable Housing Credit Improvement Act of 2021 (AHCIA) calls for expanding and overhauling the Low-Income Housing Tax Credit (LIHTC). Several provisions of the bill would affect LIHTC allocating agencies’ program administration rules contained in qualified allocation plans (QAPs) or equivalent documents. The AHICA seeks a 50 percent increase in the allocation authority of population-based, competitive LIHTCs (9 percent LIHTCs), phased-in over two years. At present, the amount is $2.8125 per capita (other than small states), although it will decrease to $2.50 in 2022 without any Congressional action. Provisions using percentages, such as 10 percent to preservation, would update automatically. Stated dollar amounts of the LIHTCs available in total and/or in specific set-asides would become obsolete. More LIHTCs could allow the creation of new priorities or practices, for instance a set-aside in a small state or an “innovation round” for applications with unique circumstances. The AHCIA also proposes to provide up to a 50 percent basis boost for developments serving extremely low-income (ELI) households in at least 20 percent of the apartments. The increase applies only to the extent a building contains these units. Agencies should explain how they would implement this provision, but a QAP revision would not be necessary. Many properties would likely generate greater equity, making them better able to serve these populations. Nearly half of LIHTC households already have incomes below 30 percent of the area median, which is lower than ELI.
Extra Credit for Affordable Housing Finance
Multi-Housing News (04/29/21) Gose, Joe
As part of the $1.4 trillion omnibus bill passed in 2020, Congress reset the federal Low-Income Housing Tax Credit (LIHTC) rate to a fixed 4 percent. Previously, the rate varied and had dropped to an unprecedented low of 3.07 percent in 2020, according to the Pillsbury Winthrop Shaw Pittman law firm. Dudley Benoit, executive vice president at Alliant Capital, an LIHTC syndicator based in Woodland Hills, Calif., says the company reported average occupancy of 94 percent throughout 2020 across its portfolio of more than 105,000 subsidized and unsubsidized units. Observers note that investors have dropped the prices they are willing to pay by as much as 5 cents, to about 88 cents per credit. Mansur Abdul-Malik, vice president of development at New York City-based NHP Foundation, an affordable housing developer, points out depreciation and other items that were also used to offset income remain unchanged. He observes, “In order to maintain the balance between the tax credits and fixed losses, investors need to reduce the amount of money they’re putting out per tax credit." The omnibus bill also authorized $1.2 billion worth of disaster LIHTCs for 11 states and Puerto Rico. Together, those two steps have likely added some $3.5 billion in tax credits to the market, estimates Matt Reilein, president and CEO for National Equity Fund, an affordable housing tax credit syndicator and lender.
Congress
Financing the Low-Income Housing Tax Credit
MReport (05/01/21)
The Affordable Housing Credit Improvement Act of 2021 (AHCIA), a bill that would strengthen the Low-Income Housing Tax Credit (LIHTC), was introduced in April with co-sponsors in both chambers of Congress. The AHCIA could finance an additional two million affordable homes over the next decade by expanding and bolstering the LIHTC, the nation’s primary tool to build and preserve affordable housing. The Terner Center for Housing Innovation at UC Berkley recently published a paper entitled, "The Complexity of Financing Low-Income Housing Tax Credit Housing in the United States." As important as the LIHTC has been to building homes, the equity generated from the tax credit is rarely sufficient to close the gap between the costs of development and the payments that would be affordable to households with low to moderate incomes, according to the authors of the paper, Elizabeth Kneebone and Carolina Reid. "In this brief, we draw on multiple sources of project-level data as well as interviews with dozens of stakeholders across the country to better understand financing complexity across different markets and types of properties and to identify challenges associated with the fragmentation of funding," they write. The paper addresses funding complexity that can add to administrative costs and can create other inefficiencies that work against the goals of containing costs and stretching subsidies further to house more people. The research identifies said complexities and offers "promising approaches," according to the authors, to streamlining capital. The entire paper is available at ternercenter.berkeley.edu.
Industry Trends
Social Impact Investors Target Naturally Occurring Affordable Housing
Multi-Housing News (05/17/21) Gose, Joe
Developers that renovate and raise rents at thousands of Class B and C apartment communities represent a major threat to the supply of workforce rental units, referred to as "naturally occurring affordable housing" (NOAH). Social impact funds have emerged in response to compete with value-add investors and preserve affordability for renters typically earning between 60 percent and 120 percent of area median income (AMI). The funds have the ability to quickly strike deals and, in most cases, they generate annual returns of around 8 percent or higher over the long term. Backers acknowledge that is roughly half the return that investors in value-add funds expect to earn, but it is still competitive with core investment strategies. Santa Monica, Calif.-based Turner Impact Capital typically keeps rental rates affordable for residents earning from 60 percent to 100 percent of AMI. Other funds sponsored by the organization invest in charter schools and health care facilities that support its tenants and surrounding communities, which encourages renter satisfaction and helps maintain occupancy. During the pandemic, the company collected 95 percent of its rental income across its portfolio, he adds. In 2017, high-net-worth individuals launched the Austin Housing Conservancy Fund to address the growing housing burden on teachers, first responders, musicians, and others, says David Steinwedell, president and CEO of Affordability Central Texas, the fund's sponsor. From 2012 to 2014 alone, approximately 7,000 NOAH units were taken off the market, according to the Austin Housing Conservancy.
HUD LIHTC Tenant Report Highlights 47 Percent of LIHTC Residents Earn at or Below 30 Percent AMI
Novogradac (04/20/2021) Lawrence, Peter
The Housing Economic and Recovery Act of 2008 requires all state agencies to submit demographic and economic data on Low-Income Housing Tax Credit (LIHTC) tenants to the U.S. Department of Housing and Urban Development. The April 2021 release of LIHTC tenant level data is the sixth data release, and covers resident information of LIHTC properties placed in service (PIS) through Dec. 31, 2018. The 2018 LIHTC tenant data shows that LIHTC serves the most vulnerable populations and families, reporting the percentage of households earning at or below 30 percent area median income (AMI) has gone up from 44.4 percent for properties placed in service as of December 2017 to 47.0 percent for properties placed in service as of December 2018. This increase brings the percentage of extremely low-income households more in line with figures seen in 2013 and 2014, and may be due to a shift in household incomes and/or AMI, the method of collecting and reporting data, and the impact of emerging policies like the National Housing Trust Fund. While the 2018 LIHTC tenant data predates the onset of the pandemic, the affordable housing community needs to counter the notion that LIHTC only serves households earning between 50 percent and 60 percent AMI. The housing policy tools of LIHTC and rental assistance complement each other, but cannot substitute for each other.
Green Building
Going Green a Win-Win for Affordable Housing
Affordable Housing Finance (05/15/21)
North Bethesda, MD-based Housing & Healthcare Finance specializes in commercial lending for affordable, multifamily, health care, and senior housing. The company's director of business development, Tom Peters, says the move toward sustainability is being driven by different factors. He cites improvements in building products, reduction in energy-related costs such as LED bulbs, and building codes that favor the construction of green buildings. Peters also notes that a growing number of affordable housing rely on Department of Housing and Urban Development (HUD) financing, which provides credits that reduce mortgage insurance premiums (MIPs) if green building practices are implemented. Those credits can save developers from 25 to 35 basis points, depending on the loan product, he estimates. Some utilities also give developers financial benefits for energy-efficient upgrades. Meanwhile, HUD's Green MIP Reduction program slashes annual MIP to 25 basis points via certification through an approved green building standard/rating program. Peters says developers should initially target the reduction of utility costs, which could include updating to the latest energy-efficient standards. It is also essential to consider the remaining life of a building and how competitive it would stay in the market to determine if energy-related upgrades are worthwhile.
New Energy Efficiency Codes Set Path Toward Green Buildings
Tech Xplore (03/02/21) Santana, Elsie Puig
Experts at the Pacific Northwest National Laboratory (PNNL), in partnership with the U.S. Department of Energy's Building Technologies Office, have supplied analysis and technical background for highly ambitious building energy efficiency codes proposed for the 2021 International Energy Conservation Code (IECC) updates. PNNL this year endorsed and aided development of an energy credit proposal, creating a new points-based system for implementing the additional efficiency package requirement in IECC Section C406. This code obligates builders to incorporate additional energy efficiency measures for new or existing commercial buildings, which sets up "a more level playing field for energy efficiency," according to PNNL's Reid Hart. The new points-based system optimizes green buildings for energy savings potential by granting points to each measure relative to the edifice's climate zone site or occupancy type. Builders have a list of 14 energy saving measures to choose from, like installing an on-site supply of renewable energy, deploying a dedicated outdoor air system, or reducing lighting by 10 percent. Each 0.25 percent of energy savings equals one point, with the aim of realizing 2.5 percent cost savings overall. Buildings must accumulate at least 10 points to meet the additional efficiency package requirement. "We believe the new points-based approach will signal a big win and put America on a path toward gradually achieving net-zero carbon emissions for commercial buildings," said Hart.
Association News
Register for Emerging Trends in Tax Credit Webinar
Join the experts on May 20, beginning at 2 p.m. Eastern to learn about the emerging trends in tax credits.
The webinar will provide 1.5 hours of instruction, followed by a 30-minute question-and-answer session. It is presented by Gwen Volk, CPO, FHC, SHCM, NAHP-e, president of Gwen Volk Infocus, Inc., and Dodi Gershen, NAHP-e, FHC, SHCM, vice president and director of management for The Gershen Group.
It is free to current SHCM certified professionals and $149 for non-SHCM professionals. Be sure that you renewed your SHCM credential in 2020 to participate in this webinar free of charge.
If you have any questions about your renewal, please contact Natasha Patterson of NAHMA at npatterson@nahma.org or 703-683-8630 ext. 117. For registration issues, please contact Amy Allen at NAAEI at AAllen@naahq.org or by phone at 703-797-0679.
To register for this course, click the Web Link below.
Reserve Your Place for NAHMA’s Virtual Leadership Training Series
In cooperation with Brenda Harrington, founder of Adaptive Leadership Strategies LLC, NAHMA is offering an entirely virtual program that combines small group learning with one-to-one coaching called NAHMA Emerging Leaders Learning Series (NELLS), beginning Aug. 5. It is designed to accelerate professional growth for the next generation of leaders in the affordable housing industry. Register for the program through the NAHMA Online Store at nahma.org today.
The NELLS program is intended to help affordable housing property managers realize their leadership potential while developing the skills necessary for success in an ever-changing business environment. The program is limited to a maximum of 15 participants and the deadline to register is July 7, depending on space availability.
The series will be delivered using three group sessions and two one-to-one coaching sessions, all of which will be conducted using Zoom video conferencing software. Each session is designed to be interactive, engaging participants in discussions, questions and answers. Zoom software is free of charge to participants and is activated with a quick and straightforward download; a smartphone, tablet, or computer with a camera and microphone is required.
For more details or to register, click on the Web Link below.
There’s Still Time to Enter the Vanguard Awards
The deadline to enter NAHMA’s 2021 Affordable Housing Vanguard Awards is June 4. Download the application from the Vanguard Award webpage, https://www.nahma.org/awards-contests/vanguard-awards/ today.
The Vanguard Award recognizes new, quality multifamily affordable housing development. The award pays tribute to developers of high-quality, affordable housing; demonstrates that exceptional new affordable housing is available across the country; reflects the creativity and innovation that must be present to create superior properties given the financing and other challenges to development; highlights results of private-public partnerships required to develop today’s affordable housing; and shares ideas for unique design and financing mechanisms with industry practitioners to further stimulate creative development in the affordable multifamily industry.
Click on the Web Link below for more information.
Time to Start Your COQ Award Application
The submission deadline for entries to NAHMA’s 2021 Communities of Quality Awards program is Nov. 4, 2021. The Communities of Quality (COQ) Awards recognize outstanding property management companies providing the highest quality of safe, affordable multifamily rental housing in communities across the country.
To enter the 2021 COQ Awards competition, a property must first apply for and achieve National Recognition as a NAHMA Community of Quality with a minimum score of 325 points on its National Recognition Application. The deadline for submitting a National COQ Recognition Program application to a local AHMA for consideration in this year’s COQ Awards cycle is Sept. 2, 2021.
The AHMAs will be honoring their local NAHMA Communities of Quality program participants. Please check with your local AHMA for its program details. A directory of the AHMAs is available at http://www.nahma.org/membership/ahma-directory.
For more details about the COQ Awards, click on the Web Link provided.
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The two 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) and the National Apartment Association Education Institute (NAAEI).
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
Apartmentalize+ (Online)
June 16, 2021
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NAAEI Affiliate Education Conference
August 2-4, 2021
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AEX Live
August 4-6, 2021
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Apartmentalize
August 31-September 2, 2021
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NAA Digital Studio
September 14, 2021
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NAHMA Biannual Top Issues in Affordable Housing Virtual Fall Conference
October 20-22, 2021
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NAA Assembly of Delegates
November 2-4, 2021
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NAA Digital
December 7-9, 2021
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News summaries © copyright 2021 SmithBucklin
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