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Register Now for the 2014 NAA Education Conference & Exposition!
The 2014 NAA Education Conference & Exposition at the Colorado Convention Center in Denver, June 18-21 is a meeting of more than 6,600 multifamily housing professionals—the biggest and best event in the industry—and reaches record-breaking attendance numbers year after year. Attendees and suppliers in the rental apartment industry come together to:
• Share new ideas in an interactive and exciting NAA Exposition
• Learn new skills in the education sessions
• Get inspired by world-renowned leaders - this year's keynoter is Michael J. Fox
• Make lasting connections that help enhance their businesses and their careers
Click on the link below to review the entire list of Keynote Sessions, Thought Leaders and Breakout Sessions. Please note that NAHMA will present four informative sessions - see the article below under Association News for more details.
Tax Issues and Tax Reform
"Investors Have Strong Opportunity with Affordable Housing Transactions"
Congress
"Hopes Fade for Housing Finance Reform Bill"
State and Local Activities
"City Readies Plan for Low-Income Housing"
"South Dakota Awards $7.7 Million in Housing Funding"
HUD-Related Activity
"HUD's Shaun Donovan in Line for OMB Director; San Antonio Mayor Julian Castro Reportedly to Lead HUD"
Management and Compliance
"Colorado Non-Profit, Local Utility Partner for Efficiency"
Industry Trends
"Development Challenges for Affordable Housing Stem From Lack Of Capital"
"The Future of Apartment Cap Rates"
Association News
NAAEI Presents Webinar Wednesdays
SHCM Blended Learning Series Coming this Fall!
NAAEI Leadership Experience Powered by: Dale Carnegie
Share Photos of your 4% LIHTC Properties via Pinterest!
NAHMA June Meeting Registration is NOW OPEN!
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Tax Issues and Tax Reform
Investors Have Strong Opportunity with Affordable Housing Transactions
Novogradac Journal of Tax Credits (05/14) Vol. 5, No. 5 Leopold, David
Between now and 2020, half of the 2 million affordable housing units in the United States will reach Year 15, the point when the current low-income housing tax credit (LIHTC) compliance period expires, according to the U.S. Department of Housing and Urban Development. As a result, interest in recapitalizing LIHTC properties will grow, and new capital should benefit both residents and owners of affordable multifamily housing, writes David Leopold, a tax credit equity executive at Bank of America Merrill Lynch. It will also provide new opportunities for investors.
Congress
Hopes Fade for Housing Finance Reform Bill
Washington Post (05/16/14) ElBoghdady, Dina
The Senate Banking Committee on May 15 passed a bill that would dissolve Fannie Mae and Freddie Mac. However, the measure did not attract a large enough majority and is unlikely to reach the Senate floor this year. Proponents failed to win over a key bloc of liberal Democrats, and Senate Majority Leader Harry Reid (D-Nev.) is unlikely to move the measure to the full chamber without their support. Democrats who voted against the bill were concerned about limiting access to affordable housing and enabling a few Wall Street players to dominate the mortgage market, while Republican opponents said it was too complex and still kept taxpayers on the hook. The Obama administration backed the measure. The uncertainty about the future of mortgage finance and the federal role make it harder for lenders to create housing opportunities, and rising rental costs compound the difficulties, particularly for low-income households. Many housing analysts believe the chances of winding down the mortgage finance giants could erode even further next year after the November midterm elections if Democrats lose control of the Senate.
State and Local Activities
City Readies Plan for Low-Income Housing
San Jose Mercury News (05/07/14) Rosen, Carol
The housing department of the city of San Jose, Calif., has made available its 2014-15 action plan for affordable housing to the city council for review and public comment. There was little discussion about the plan, which passed unopposed in early May. The department hopes to provide 233 new rental units that will include 56 special-needs units. Another goal is providing tenant-based rental assistance to 276 homeless households in conjunction with Destination: Home via funding and activities, including the Downtown Homeless Outreach and Engagement program and the Homeless Encampment strategy. The department furthermore seeks to provide housing rehab and minor/emergency repair services to low-income and mobile home owners. Education and outreach are planned, along with fair housing testing in local apartment complexes to ensure local ordinances comply with federal and state fair housing laws. To promote environmental sustainability, the department hopes to install energy and water efficiency actions in 414 new housing units and convert 1,040 streetlights to LEDs. Fewer than half of first-time homebuyers in the city can currently afford a median-priced home, indicating a significant need to preserve affordable housing for lower-income and special-needs households.
South Dakota Awards $7.7 Million in Housing Funding
Affordable Housing Finance (05/15/14)
The South Dakota Housing Development Authority (SDHDA) has approved $2.6 million in low-income housing tax credits (LIHTCs), $3.4 million in HOME funds, and $1.7 million in Housing Opportunity Funds for 22 projects across the state. SDHDA officials note the demand was more than double the available funding. SDHDA received 13 LIHTC applications requesting more than $5.3 million, 11 HOME applications requesting more than $6.2 million, and 24 Housing Opportunity Fund applications requesting more than $3.8 million. South Dakota's Housing Opportunity Fund was created during the 2013 legislative session to promote economic development in the state by expanding the affordable housing supply for low- and moderate-income households. The 22 projects will provide 255 newly constructed and 50 rehabilitated multifamily housing units.
HUD-Related Activity
HUD's Shaun Donovan in Line for OMB Director; San Antonio Mayor Julian Castro Reportedly to Lead HUD
Associated Press (05/19/14) Pace, Julie; Schmal, Emily
Shuffling his second-term Cabinet, President Barack Obama plans to nominate Housing Secretary Shaun Donovan to be budget director and is considering San Antonio Mayor Julian Castro to succeed Donovan, according to people familiar with the selection process. The moves would raise the profile of two men with close ties to the president. "Shaun Donovan going to OMB is perhaps an opportunity to educate the office on how HUD programs work," says Denise Muha, executive director of the National Leased Housing Association, citing the complexities of funding the Section 8 rental assistance program as an example. Donovan would also be in a new position to advocate for the Rental Assistance Demonstration (RAD). The cornerstone of HUD's preservation efforts, RAD allows public housing and other key affordable properties to convert to long-term Section 8 contracts. The first component of the program was capped at 60,000 units, which Donovan has wanted to increase, as there are approximately 115,000 units on a waiting list. However, a recent bill approved by the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies fails to expand the program.
Management and Compliance
Colorado Non-Profit, Local Utility Partner for Efficiency
Intelligent Utility (05/14) Pletcher, Suzanne
Grace Apartments sustainability manager Caitlin Rood applied for financial aid to replace aging, inefficient boilers that supply heat to the community, and she courted Energy Outreach Colorado (EOC), whom she had worked with on previous upgrades. “Energy efficiency upgrades benefit residents and our ability to operate quality properties, but they must be low cost,” Rood notes. “The challenge for managers of low-income housing is that financing is very tight. Without EOC’s help, we may have had to wait until the boilers actually broke down.” An energy audit by EOC also revealed that incandescent and fluorescent lights in the apartments and common areas needed replacing as well, while showerheads required conversion to conserve water. EOC asked a contractor experienced in energy efficiency upgrades via Xcel Energy, Grace’s utility supplier, to bid the work. The contractor submitted the $185,000 upgrade package to Xcel for rebates that would offset the total cost of the project. EOC obtained $50,000 from a municipal partnership and told Rood that Mercy Housing’s estimated share of the project cost would be $65,000, but Mercy's lending partners rejected the project. "The stumbling block was how much money we had available to invest in this, and at Grace we just didn’t have it," Rood says. The Colorado Public Utilities Commission prioritized energy efficiency rebate programs for affordable housing five years ago when they developed energy efficiency goals for shareholder-owned utilities, including Xcel. Xcel has requested that the commission cut its energy savings goals by 28 percent by 2020 in a decision expected by June. If Xcel’s request is granted, it could reduce funding for low-income and other residential energy efficiency programs. Xcel's actual rebate for Grace Apartments came in higher than their initial estimate, and Rood received approval to spend $22,000 for the upgrades, which were completed in February and are expected to save Grace Apartments some $13,000 of its yearly gas and electric costs.
Industry Trends
Development Challenges for Affordable Housing Stem From Lack Of Capital
NuWire Investor (05/20/14) Mattson-Teig, Beth
The National Low Income Housing Preservation Database indicates that the number of units affordable to very low income renters has contracted by 200,000 since 2011, with the current size of the existing subsidized U.S. rental housing market estimated at 4.8 million units. Securing capital is a key obstacle in the development of new subsidized rental housing, and Fannie Mae's Bob Simpson says the Low Income Housing Tax Credit (LIHTC) program, "for all practical purposes, is the only way in which we can build new subsidized units today." Reasons for shrinkage include the fact that the amount of equity coming into the affordable housing market has remained more or less the same for the past 20 years, only now it costs more to construct units. Moreover, there is substantially less gap financing available. Consultant Michael J. Novogradac doubts there will be any significant tax reform until after the next presidential election, but he emphasizes the importance of industry remaining active and engaged in tax reform discussion. The yearly equity raise from LIHTCs comes to approximately $9 billion, and any tax reform would likely contain a lower rate and longer depreciation. Both of those elements could influence pricing and yields, and subsequently impact the sector's ability to draw equity investors. Novogradac sees this leading to 8 to 12 percent less equity raised, amounting to an equity loss of between $700 million and $1 billion per year. "We actually have been trying to push back against this tax reform," he notes. One source of optimism for the industry is that while new construction remains challenging, more attention and more tax credits concentrate on preserving existing subsidized properties. Developers and investors are studying opportunities to obtain or refurbish existing apartments. "We see that as a tremendous opportunity from the debt space and there is ample liquidity in the secondary market to support that need," Simpson says.
The Future of Apartment Cap Rates
Apartment Finance Today (05/14) Severino, Ryan
Valuations for apartments across the U.S. have been rising, driving down cap rates to levels last seen nine years ago. But with construction accelerating, the property market cycle maturing, and interest rates on the rise, many are now wondering if cap rates have bottomed and will climb over the next few years. The cap rate is typically categorized as the ratio of the forecasted annual net operating income (NOI) for a building to the value or price of the building. The numerator of that ratio is usually relatively stable, but the denominator of cap rates, the valuation or price of the building, is more turbulent. The valuation of apartments is based on the discounted cash flows that a building is projected to generate, and the overall expectation is that as interest rates rise and fall, the discount rate applied to apartments rises and falls as well, causing values to behave like most other asset classes. However, empirical analysis shows that this assumption is not explicitly consistent. Examination of the data for the past four to five years indicates poor correlation between apartment cap rates and interest rates. The trajectory of apartment cap rates is determined by the magnitude of interest rate hikes as they pertain to the improvements in fundamentals, compressing risk premiums, and so on. Such market forces are anticipated to be stronger over the next three years than the increase in long-term interest rates that has yet to happen, so the decline of apartment cap rates is expected to continue. However, further out the balance eventually shifts in favor of increasing interest rates, marked by elevated vacancy rates and slowing NOI growth over the next five years.
Association News
NAAEI Presents Webinar Wednesdays
Join NAAEI, Apartment All Stars and Multifamily Insiders for Webinar Wednesdays, the largest premium webinar series in the industry to provide SHCM designates with access to industry thought leaders to discuss innovative ideas, best practices and emerging industry trends. These webinars will give participants the tools they need to become industry superstars in their own right. To review upcoming webinars, click on the link below and scroll down to the 2014 Webinar Wednesday schedule.
SHCM Blended Learning Series Coming this Fall!
Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification. Each webinar will last for approximately two hours, followed by a question-and-answer period for attendees.
• The cost for the course, including the SHCM exam, is $549 for members and $599 for non members.
• Individual Webinars can be purchased at $99 each.
Webinar dates are:
September 4
September 11
September 18
September 24
Each webinar will begin at 12:00 eastern.
To register, click on the link below.
NAAEI Leadership Experience Powered by: Dale Carnegie
Responding to the need for leadership training within the apartment industry, NAAEI has partnered with Dale Carnegie Training to deliver a world-class leadership training program. This program targets regional employees and corporate department heads, helping them make the transition from being a great manager to an effective leader. For more information about this two-day program, click on the link below.
Share Photos of your 4% LIHTC Properties via Pinterest!
NAHMA is inviting its members to share success stories on properties that have used the 4% low-income housing tax credit (LIHTC) for affordable housing construction or acquisition through NAHMA’s new Pinterest webpage.
Pinterest is an excellent resource for sharing photographs and stories instantly. By simply “pinning” a photo of one of your properties to NAHMA's board, you can demonstrate the life changing opportunities that affordable housing presents to low-income Americans. Pinterest offers a dynamic display model for these photos and accompanying text that is both appealing and easy to use. After you create a Pinterest profile, you can begin pinning pictures of you properties to NAHMA's board in a matter of seconds. To create a profile, please visit the main Pinterest page: https://www.pinterest.com/.
To view and post a picture to NAHMA's Featured Low-Income Housing Tax Credit (LIHTC) Properties board, please click on the link below.
When sharing your stories with NAHMA, please include:
• The state(s) in which you have used this credit
• Pictures of affordable housing preservation/construction that have occurred because of the credit
• General information on the property (number of units, construction dates, etc.)
• Information on the value it has provided for the local community
NAHMA June Meeting Registration is NOW OPEN!
The National Affordable Housing Management Association (NAHMA) will again hold its annual summer meeting in conjunction with the National Apartment Association (NAA) Education Conference & Exposition on June 17-21, in Denver, CO.
The 2014 NAA Education Conference & Exposition is the largest event in the multifamily housing industry and includes world-class educators and a star-studded lineup of speakers.
Through this partnership, both conferences will address the critical needs of affordable housing communities and the apartment industry as a whole. Discounts will be available to attendees who register for both conferences. These discounts will provide a cost neutral solution to your training and development needs.
Special note: The Early Bird Registration Deadline for the NAA Education Conference & Exposition is April 18, 2014. Register on or before this date and save on registration fees for the 2014 NAA Education Conference & Exposition. Headline speakers include Michael J Fox actor and activist as the Thursday Keynote speaker; Barbara Corcoran and Draymond John of ABC’s hit show “Shark Tank” as the Friday General Session speakers; and Alex Sheen, Founder of ‘because I said I would’ as a speaker for the Special Saturday session.
At the NAHMA Public Policy Issues Forum, to be held as a full-day meeting on Wednesday, June 18, discussions will focus on public policy related to federal legislative and regulatory initiatives that impact all of the affordable housing programs, from HUD programs (project-based Section, Section 8 tenant vouchers, Section 202 senior housing, and Section 811 special needs housing); to the Low Income Housing Tax Credit program; to Rural Housing Service programs (Sections 515, 538 and the revitalization program). In addition to its full day of meetings on June 18, NAHMA will be providing affordable housing-specific sessions as part of the NAA conference – for details, see below.
On Tuesday, June 17, NAHMA will host a "mini convocation" for AHMA Executive Directors and Presidents from 10 am to 2 pm to share insights and experiences in developing and providing member programs and services.
ALSO, MORE DETAILS COMING SOON on two exciting events that will be held in conjunction with the NAHMA meeting: (separate registrations for both events apply)
• NAHMA Educational Foundation Fundraiser - on Wednesday evening June 18, @ 6pm Kevin Taylors @ The Opera House, reception style event with exciting entertainment
• NAHMA Party @ Suite 200 Nightclub & Bar will be open from 9 pm to 1 am
For registration details, click on the link below.
NAHMA Sessions to be Held During the NAA Conference:
Thurs., June 19, 9 am – 10:30 am
NAHMA Presents: Scenarios for Housing Credit Reform -- Is there Life Afterwards?
The Low Income Housing Tax Credit (LIHTC or Housing Credit) program is the primary and virtually sole source of major funding for development of new and major rehab of existing affordable multifamily housing across the country. As Congress considers substantive reform of the federal tax code in an effort to solve the nation’s fiscal woes, all programs are on the table for possible major change or even elimination. In this session, industry experts will discuss likely scenarios of reform to the Housing Credit program, as well as what forward thinkers may already be contemplating as “Plan B” if the Housing Credit program undergoes major change. Attendees will learn about:
* Possible changes to the Housing Credit program as a result of federal tax reform;
* Possible impacts these changes might have on affordable multifamily housing development and preservation; and
* What steps, if any, affordable housing developers should be considering now for better positioning of their portfolio should the program undergo major reform.
Moderator: Kris Cook, CAE, Executive Director, NAHMA
Speakers: Nicolo Pinoli, Partner, Novogradac & Company LLP; Larry Curtis, President and Managing Partner, WinnDevelopment; Michelle Norris, Senior Vice President Acquisitions & Development and Public Policy, National Church Residences
Thurs., June 19, 10:45 am – Noon
NAHMA Presents: Cutting-Edge Energy-Saving Solutions Designed to Pay for Themselves
In mid-2013, the Department of Housing and Urban Development awarded nearly $23 million from its Energy Innovation Fund to organizations leading the way in bringing energy-saving solutions to affordable multifamily housing. A year later, attendees will learn from grant recipients about the programs they launched and the successes they achieved, including:
* A pilot program to finance energy-efficient retrofits designed to pay for themselves through reduced energy costs;
* Development of innovative and replicable strategies designed to set new industry standards for energy efficiency; and
* Creation of new financing tools designed to facilitate significant reductions in energy consumption, operating costs, and the carbon footprint of affordable multifamily housing.
Moderator: Kris Cook, CAE, Executive Director, NAHMA
Speakers: Darien Crimmin, Vice President of Energy and Sustainability, WinnDevelopment; Jeffrey Greenberger, Chief Operating Officer, Affordable Community Energy; Richard Samson, President, SAHF Energy, a Division of Stewards of Affordable Housing for the Future
Fri., June 20, 8 am – 9:30 am
NAHMA Presents: The Clipboard is Dead Even in Affordable Housing –
Long Live the Tablet!
Most of existing daily and weekly maintenance processes are confined to the flat and lifeless world of a clipboard, pencil and paper. The information gathered and recorded on daily system checks is static, never shared, does not have comparative performance measurement, and little, if any, oversight or accountability. Paper-based work order systems are labor intensive – valuable time is consumed in constant movement to and from the office to pick-up and drop off work orders. Technician’s notes are absent, or unreadable, and important information on troubleshooting and solutions is lost. Without real system knowledge, troubleshooting our increasingly sophisticated building systems is difficult at best. The best-intentioned staff may upset controls that have impact on our residents or system components. In this session, attendees learn how to say goodbye to the clipboard, and welcome new maintenance tools – bring on the tablets to optimize site staff time and efficiency, lower utility and operations costs, be persistent with performance checks and realize all the savings promised by sophisticated systems. Specifically, attendees will be guided through the process of evaluating and implementing affordable mobile maintenance technology that will:
* Bring daily/weekly logs and checks to life;
* Provide accountability and global oversight to maintenance activities;
* Save energy through proper system operation;
* Allow for accurate on-the-spot trouble shooting;
* Save labor time and cost through mobile work order systems;
* Empower site staff to run buildings more effectively; and
* Capture institutional knowledge required to operate a comfortable, efficient, and healthy building.
Moderator: Michelle Kitchen, Director of Government Affairs, NAHMA
Speakers: Michael Ferguson, VP Facilities Management, Peabody Properties; Matthew Holden, President, Sparhawk Group
Fri., June 20, 2:15 pm – 3:45 pm
NAHMA Presents: Key Federal Legislative and Regulatory Issues Impacting Affordable Multifamily Housing
The world of affordable multifamily housing is not only highly regulated by three federal agencies, but also highly dependent on the ability of Congress to pass timely and sufficient annual funding bills. This session will focus on key current federal legislative and regulatory issues facing providers of multifamily affordable housing participating in HUD, rural housing and Housing Credit programs. Attendees will learn about -
* The impact of federal budget appropriations, sequestration and the deficit on funding for affordable multifamily programs now and into the future;
* The latest regulatory initiatives impacting the Housing Credit, HUD and rural housing programs; and
* Real-world impacts on communities, management companies and owners.
Moderator: Michelle Kitchen, Director of Government Affairs, NAHMA
Speakers: Gianna Solari, President, NAHMA, Vice President/COO, Solari Enterprises; Kris Cook, Executive Director, NAHMA; Greg Brown, Senior Vice President of Government Affairs, NAA
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The three national associations sponsoring the Specialist in Housing Credit Management® certification program invite your company to become a Specialist in Housing Credit Management® (SHCM®) 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 (formerly AAHSA, the American Association of Housing and Services for the Aging).
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 link below.
Abstract News © Copyright 2014 INFORMATION, INC.
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