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HUD Asks Congress for Deep Cuts


President Donald Trump has released his initial budget request to Congress for fiscal year 2019, including Department of Housing and Urban Development (HUD) funding. After a $2 billion add-in from the spending caps agreement is included, the devastating request would cut HUD funding by more than 14 percent, as compared to fiscal year 2017 enacted levels. As expected, the initial request touts a forthcoming “comprehensive package of rental housing reforms” that would raise rents for all HUD residents, do away with medical expense and other income deductions, and allow housing authorities to impose work requirements for nonelderly, nondisabled residents. Click on the Web Link for more information.
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Industry Trends


"Fannie and Freddie Return"
"Opportunity Zones: What They Are, Why They Matter"

State and Local Activities


"Detroit to Boost Low-Income Housing With $250 Million Fund"
"Could Hilton Head See Affordable Housing Soon? First the Town Wants to Change the Rules"
"Report: Thousands of Affordable Units Could Go Market-Rate as Tax Credit Deals Lapse"

Management and Compliance


"Apartment Life Offers Challenges in Pest Control"

Green Building


"Fort Collins Wins $100K Grant for Low-Income Energy Efficiency Program"

Association News


Save the Date: Online SHCM Course
Save the Date: LeadingAge Annual Meeting and Expo in Philadelphia
Congress Has Until March 23 to Complete HUD Funding
What You Need to Know About the HUD FY 2018 Income Limits
NAHMA Releases 2017 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events

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Industry Trends


Fannie and Freddie Return
Apartment Finance Today (02/26/18) Anderson, Bendix

Fannie Mae and Freddie Mac are once again investing in Low-Income Housing Tax Credits (LIHTCs). The government-sponsored enterprises (GSEs) stopped investing in LIHTCs when they were seized by the government during the financial crisis, but the Federal Housing Finance Agency (FHFA) near the end of 2017 agreed to allow them to return to the market. The LIHTC investment community last year suffered from uncertainty following the presidential election on matters ranging from the likelihood of federal tax reform to rising interest rates. The presence of Fannie Mae and Freddie Mac could help developers who sometimes struggle to attract investors to their plans to build much-needed affordable housing. However, Fannie and Freddie are unlikely to dominate the market for LIHTCs like they did before the financial crisis, when they regularly bought roughly 40 percent of the total LIHTCs available. FHFA is allowing Fannie Mae and Freddie Mac to each invest up to $500 million a year in LIHTCs. Today, the total market for LIHTC investment is about $14 billion a year. The maximum annual investment allowed for the GSEs totals $1 billion, which would be about 7 percent of the total market.
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Opportunity Zones: What They Are, Why They Matter
Affordable Housing Finance (02/26/18) Chatman, Lori

Distressed areas now enjoy a new federal tax incentive designed to drive long-term private investment to them under the Opportunity Zones community development program, which was created by the Tax Cuts and Jobs Act. The source for this investment is the estimated $2.2 trillion of unrealized capital gains in stocks and mutual funds held by individuals and corporations, writes Lori Chatman, president of the Enterprise Community Loan Fund and senior vice president of Enterprise Community Partners. There is no authorized cap on the amount of capital that could be made available through Opportunity Zone investments, unlike with the Low-Income Housing Tax Credit or the New Markets Tax Credit. Investors have a significant incentive in that they are able to defer and even reduce their federal tax liability on the sale of appreciated assets if they place their gains into a new vehicle called an Opportunity Fund, which would then channel pooled capital into equity investments in small businesses and real estate in distressed communities. Optimizing flexibility, the program would allow different types of investments to benefit multiple parts of the community development ecosystem. Impact-motivated Opportunity Funds could help fill a capital gap that has been a barrier to scaling mixed-income and workforce housing. Opportunity Zones still must be identified and the U.S. Treasury Department must establish rules for the program. As a result, the next several months will be critical to the impact of the program, according to Chatman.
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State and Local Activities


Detroit to Boost Low-Income Housing With $250 Million Fund
Detroit News (03/12/18) Terry, Nicquel

The City of Detroit on March 12 released new details of an ambitious plan to establish a $250-million affordable housing fund that will preserve 10,000 existing units in neighborhoods throughout the city and develop 2,000 new units within the next five years. The Affordable Housing Leverage Fund will be funded with $50 million in grants, $150 million in low-interest loans, and $50 million in public funds from expected federal and city funds for affordable housing over the next five years. The Housing and Revitalization Department, along with other city partners such as the Detroit Housing Commission, will lead the effort, starting with the creation of the Office of Policy Development and Implementation. The targeted affordable units for preservation are at risk because of expiring Low-Income Housing Tax Credits (LIHTCs) and deteriorating conditions. According to the city, rents have experienced steep growth, particularly in downtown, where much of Detroit's redevelopment has occurred so far. The plan would preserve units by engaging owners of regulated and "naturally occurring affordable housing" to make sure they are ready to extend their affordability requirements and rehabilitate and extend the life of their existing affordable housing. The city also plans to target about 3,500 units considered to be most at-risk for investment. The city is hoping to partner with a preservation community development financial institution and the Housing and Revitalization Department to outline available incentives, such as LIHTCs, to create a pipeline of preservation units.
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Could Hilton Head See Affordable Housing Soon? First the Town Wants to Change the Rules
Island Packet Online (03/07/18) Kincaid, Alex; Angst, Maggie

In an effort to combat the lack of affordable housing on Hilton Head Island, the Town Council is asking the state to change the way it allocates tax credits so developers have more incentive to build low-income housing. If approved by the State Housing and Development Authority, the changes could lead to more affordable housing developments on the island. The town has received less than four-tenths of one percent of the state's Low-Income Housing Tax Credit (LIHTC) since its inception in 1986, according to the proposed changes authored by mayor David Bennett. The allocation of LIHTC funding tends to favor urban areas, according to Bennett. "With a critical shortage of workforce and affordable housing threatening the economy of this world-renowned destination, the time for change is long overdue," Bennett wrote. "It (the tax credit program) is a very successful tool. It creates that perfect blend of public and private partnership,” he said. “But if you have that resource producing that much of the affordable rental housing and you can’t get it, that’s a big step in the wrong direction." Among the changes the town is suggesting is that the state prioritize housing demand when scoring applications; award points based on access and availability of services rather than physical location; add criteria for growing workforce demand; and award points to municipalities that have not received the tax credit for "some period of time for no reasons other than the preferences" of the program.
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Report: Thousands of Affordable Units Could Go Market-Rate as Tax Credit Deals Lapse
City Limits Weekly (03/01/18) Murphy, Jarrett

A report from the Community Service Society (CSS) says the Trump administration's proposed cuts to New York City's Section 8 program could cost the city tens of thousands of federal vouchers used for affordable housing. In addition, the expiration of affordability agreements connected to Low-Income Housing Tax Credits could push thousands of other units to the open market. Oksana Mironova, housing analyst at CSS, says the root problem of affordable housing is the way the programs were created in the 1970s and 1980s. She says the government decided to subsidize private developments instead of building their own. This leads to problems when subsidies end and building owners leave a program.
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Management and Compliance


Apartment Life Offers Challenges in Pest Control
GoErie.com (02/10/18) Fox, Henry

Some bugs can be a nuisance, but others can result in infestations. It is important for apartment owners and operators to know their bugs before sounding any alarm bells. Many apartment properties have regularly scheduled pest control services to handle such seasonal invaders as ants and spiders. As successful as those treatments are, some pests still persist and have to be dealt with. True and legitimate concern arises when an apartment resident has bed bugs. Such blood feeders will commonly be in search of a new host, particularly when a few factors arise: one, an infested apartment becomes vacant; two, a treatment application pushes the pests to another apartment. Bed bugs prefer to eat regularly, but they can go months without a blood meal. Furthermore, they can sense the carbon dioxide human beings emit from more than 75 feet away. Once a rental unit is vacated, the remaining pests begin "searching for their next nosh" via electrical outlets, along duct work, and through shared plumbing lines. Not only does the empty unit serve as an infestation source, the furniture and possessions of the transient apartment tenant are now relocated to another structure to carry on the tradition of sharing.
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Green Building


Fort Collins Wins $100K Grant for Low-Income Energy Efficiency Program
Fort Collins Coloradoan (CO) (02/21/18) Coltrain, Nick

Fort Collins, Colo., has received a $100,000 grant from Bloomberg Philanthropies for a program to encourage efficiency renovations in low-income homes, which could affect up to 47,000 residents. The city was one of 35 selected to receive grant money and technical assistance in the 2018 U.S. Mayors Challenge. The city's pitch is to help finance efficiency renovations for single- and multi-family rental properties through public-private partnerships, and Mayor Wade Troxell chose a theme of "Climate Economy" for the grant—the concept that high carbon emissions are not required for economic prosperity. "In Fort Collins, we are demonstrating that we can thrive as a community and lower our emissions," Troxell said. "Everyone in our community deserves the chance to improve the energy efficiency in their homes for their well-being and the overall health of the community." The city expects the program to generate $75.8 million in private-sector investments in the next decade and 150 new energy-related jobs throughout the program's lifespan. Fort Collins will have six months to prepare the program and apply for another grant from Bloomberg, which will announce four finalist cities in October. Each finalist will receive $1 million to pursue their projects, and one will win a grand prize of $5 million. Michael R. Bloomberg, founder of Bloomberg Philanthropies, said the 35 cities chosen for the 2018 Mayors Challenge "really stood out for their potential to improve people's lives."
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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 Wednesdays in April with each beginning at 12 p.m. Eastern time.
The course schedule is as follows:
  • April 4: Chapter 1, Program Regulations presented by Anita Moseman
  • April 11, Chapter 2, Unit Eligibility presented by Gwen Volk
  • April 18, Chapter 3, Applicant Eligibility & Certification presented by Dodi Gershen
  • April 25, Chapter 4, Monitoring & Compliance presented by Heather Staggs
The cost for the course, including the SHCM exam and SHCM application fee, is $549 for National Apartment Association Education Institute (NAAEI) and National Affordable Housing Management Association (NAHMA) members and $599 for nonmembers. Individual webinars can be purchased for $109 each. To register, click the Web Link provided below. If you need assistance with the registration process, please contact: Amy Allen, at AAllen@naahq.org.
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Save the Date: LeadingAge Annual Meeting and Expo in Philadelphia

Be part of the nation’s largest annual event for the not-for-profit aging services field. You are sure to find innovative solutions to your challenges, discover new ways to improve operations and quality, and go home better equipped to serve your residents and clients. For more information, click the Web Link provided below.
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Congress Has Until March 23 to Complete HUD Funding

The Feb. 9 agreement to raise federal spending caps has allowed the U.S. House and Senate to proceed on finalizing fiscal year 2018 spending bills, including the appropriations bill that includes funding for Department of Housing and Urban Development (HUD) programs. Congress hopes to do so by its self-imposed March 23 deadline. Click on the Web Link for more information.
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What You Need to Know About the HUD FY 2018 Income Limits

The U.S. Department of Housing and Urban Development (HUD) has set a target release date for new income limits of April 1 of each year. HUD has yet to publish the new income limits for 2018, but this article from Novogradac & Company LLC provides useful reminders and insights into what to expect about the income limits that are now projected to be released on March 30. To read the article, click on the Web Link provided.
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NAHMA Releases 2017 Affordable 100 List

The National Affordable Housing Management Association (NAHMA) announces its 2017 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 NAHMA News, 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.
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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.
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Upcoming Events

LeadingAge 2018 PEAK Leadership Summit
March 18-21, 2018
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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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March 2018