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Congress Approves HOTMA


Before leaving for its summer recess, the Senate passed, by unanimous consent, the Housing Opportunity through Modernization Act of 2015, also known as H.R.3700, which would streamline and reform federal housing programs. The House unanimously passed the bill in February. The National Affordable Housing Management Association (NAHMA) advocated in favor of the bill since its introduction by Rep. Blaine Luetkemeyer (R-MO) in October 2015. The act improves the Section 8 Housing Choice Voucher Program for both residents and owners by maximizing the impact of taxpayer dollars and eliminating inefficiencies. Additionally, it encourages efficiency within the Department of Housing and Urban Development’s (HUD) rental housing programs and facilitates greater private sector participation in affordable housing overall. To read the bill, click on the Web Link provided.
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Congress


"Cantwell, Hatch Introduce Second Round of LIHTC Legislation"

State and Local Activities


"New Rule Requires Smoke-Free Policy for Future Low-Income Units"
"New Jersey Court Rejects Retroactive Affordable Housing Rule Enforcement"
"New Fund Seeks to Preserve Affordable Housing in Twin Cities"

Green Building


"Fed Demands for Green Building Initiatives Growing"
"Going Green: Your Guide to Becoming LEED Certified"

Management and Compliance


"Diamonds Are Forever"

Industry Trends


"Growth in Income Lags Very Far Behind Rises in Rent: Report"
"When Will Affordable Housing Advocates Push for More Supply, Fewer Rules?"

Association News


NAHMA Names Winnie Mei Poster Contest Winner
Initiative to Preserve Multifamily Field Offices
HUD Publishes New Proposed HCV Administrative Fee Formula Rule
NAHMA Honors Vanguard Excellence
HUD, Comcast Partnership to Provide Internet Essentials to Low-Income Families
NAHMA Releases 2016 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Congress


Cantwell, Hatch Introduce Second Round of LIHTC Legislation
Apartment Finance Today (07/14/16) Kimura, Donna

Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah) have introduced legislation to make key changes to the low-income housing tax credit (LIHTC) program. The new legislation builds on their earlier proposal to expand the LIHTC program by 50 percent to help create or preserve approximately 1.3 million affordable homes over a 10-year period, reflecting an increase of 400,000 more units than is possible under the existing program. The first bill, S. 2962, was introduced in May. Affordable housing leaders say it is significant that Hatch is a co-sponsor because he chairs the influential Senate Finance Committee. Another co-sponsor is Sen. Ron Wyden (D-Ore.), ranking member of the committee, on which Cantwell also serves. The proposed Affordable Housing Credit Improvement Act of 2016 would expand the number of credits in addition to making other key changes, such as a purchase option to allow nonprofit and government sponsors to acquire housing credit properties when the current 15-year compliance period expires. There is also an incentive to allow LIHTC properties to claim clean energy credits that were previously unavailable to them, including the energy efficient new homes credit, energy efficient commercial building deduction, and energy investment tax credit. The bill also enacts a permanent 4 percent credit rate floor for acquisition and bond-financed projects, providing more predictability and flexibility in financing these projects.
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State and Local Activities


New Rule Requires Smoke-Free Policy for Future Low-Income Units
New Hampshire Business Review (07/13/16) Feingold, Jeff

The New Hampshire Housing Finance Authority (NHHFA) has ruled that all future units built using the state's Low Income Housing Tax Credit (LIHTC) will be required to be 100 percent smoke-free. The change makes New Hampshire one of only five states in the nation to have such a requirement, and is a result of a recommendation by the Cheshire Coalition for Tobacco-Free Communities. The NHHFA accepted the proposed revision to the tax credit application process, applicable to any new construction or renovation of low-income housing units, and presented it to Gov. Maggie Hassan. She approved the smoke-free requirement in May. In order for developers to qualify for LIHTCs under the new rule, the developer's application must now reflect a smoke-free policy. Hawaii, Maine, Montana, and North Carolina are the other states that require a smoke-free policy as a condition to apply for the tax credit. Kate McNally, program manager of the Cheshire Coalition for Tobacco-Free Communities, says smoke-free apartments cost landlords 5 percent to 10 percent less than units that allow for smoking. Moreover, cigarettes are the main source of fire death in New Hampshire and the cause of multiple fires each year in multi-unit rentals, so "many insurance companies consider a 100 percent smoke-free policy as part of a comprehensive fire-safety policy and will offer policy premium savings for owners."
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New Jersey Court Rejects Retroactive Affordable Housing Rule Enforcement
Construction Dive (07/13/16) Slowey, Kim

Municipalities in New Jersey do not have to comply with affordable housing rules that were not enforced by the Council on Affordable Housing (COAH) for 16 years, according to a ruling by a panel of appeals court judges, The Wall Street Journal reports. The court ruled that city and town officials will only be held to current and future mandates even though housing advocates say hundreds of thousands of units of affordable housing are at stake. Backers of the ruling say it protects municipalities from having to build an unrealistic number of affordable units, but critics said it will prevent the construction of much-needed below-market housing. The state Supreme Court took away the authority of COAH in 2015, reportedly because it became a dysfunctional authority beginning in 1998. COAH's authority was shifted to local courts. Housing advocates were successful in getting a lower trial court to rule their way earlier this year, which would have required cities to fill its affordable housing responsibilities for the 1999-2015 gap. However, roughly 300 New Jersey cities and towns filed an appeal, which resulted in this latest ruling. Federal housing assistance programs currently help 5.5 million renter households, but a National Low Income Housing Coalition report found there are still more than 10 million low-income families who need 7.2 million housing units.
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New Fund Seeks to Preserve Affordable Housing in Twin Cities
Affordable Housing Finance (06/28/16) Kimura, Donna

Officials in the Minneapolis-St. Paul area hope to slow the loss of affordable housing through the new Naturally Occurring Affordable Housing (NOAH) Impact Fund, which anticipates acquiring properties by the end of the year. The fund recently took a major step when Hennepin County agreed to invest $3 million in the fund. "It's cheaper to preserve affordable housing than it is to create it," says county Commissioner Jan Callison. Rents in these naturally occurring affordable housing units average between $550 and $1,200 per month. Created by the Greater Minnesota Housing Fund (GMHF), the NOAH Impact Fund will target at-risk naturally occurring affordable housing comprised of Class B and C rental apartments typically built between the 1950s and 1980s. "The goal will be to keep the properties affordable for 15 to 20 years in order to preserve the affordability and avoid the displacement of tenants in a hot market," says Warren Hanson, GMHF president and CEO. The fund's first phase focuses on the preservation of 1,000 units with $25 million from the fund. If that is successful, officials plan to do a similar second phase. The county's funds join $1 million from the McKnight Foundation and $2.25 million from the Greater Minnesota Housing Fund. Officials overall have "active interest" for all $25 million needed for the first phase, according to Hanson. Cinnaire is serving as the asset manager. The fund will work with high-performing, nonprofit affordable housing developers and socially motivated, for-profit owner-operators.
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Green Building


Fed Demands for Green Building Initiatives Growing
Real Estate Weekly (07/08/16)

Fannie Mae, Freddie Mac, and the U.S. Federal Housing Administration increasingly are calling for green building initiatives from multifamily property investors and lenders, particularly when acquiring or refinancing older properties, according to consultant Randy Ward. As a result, more and more investors and their lenders are asking for a Green Physical Needs Assessment (PNA) from their third-party physical due diligence providers as part of their loan underwriting and property evaluations. A Green PNA is designed to analyze and make recommendations about the physical condition of a multifamily property while stressing energy and water efficiency improvements. “By obtaining Green PNAs and implementing Green property improvements and upgrades, owners and borrowers can take advantage of beneficial loan terms, help provide more affordable housing through lower utility bills, meet federal guidelines for energy efficiency, and participate in nationwide energy and water usage reductions that can conserve our natural resources,” Ward says. The PNA report is the major framework of a Green PNA, and it is usually employed by multifamily lenders or investors in support of loan underwriting, risk management, transaction negotiation, or capital needs planning. The Green PNA's green element is the Energy Audit, which highlights multifamily property energy and water consumption metrics and potential savings and efficiencies for these systems.
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Going Green: Your Guide to Becoming LEED Certified
Business.com (05/06/16)

Green certification is becoming increasingly popular, and the lack of LEED certification may soon become a competitive disadvantage. In addition to its environmental benefits, when a company moves in the direction of LEED certification, it will experience a variety of other advantages. In order to gain LEED certification, the building must be located in a permanent location on existing land, use reasonable LEED boundaries, and comply with all project size requirements. Through the implementation of these requirements, projects should be able to give clear guidance to customers, reduce complications during certification, and protect the integrity of the LEED program. The U.S. Green Building Council has a four-step process for achieving LEED certification. First, the project must be registered by completing the necessary forms and paying required fees. The project must then apply for certification by submitting an application through the LEED online system. Next, the application must be reviewed by Green Business Certification. Finally, the project will receive a certification decision. Organizations applying for LEED certification are required to pay a registration fee, a certification fee, and other fees associated with expedited reviews, possible appeals, and other processes if they are necessary.
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Management and Compliance


Diamonds Are Forever
Affordable Housing Finance (07/11/16) Harris, R. Lee

Conducting market studies is essential for most affordable housing developments. However, mistakes are often made in defining the market area for a specific project. For instance, even expecting that a resident will drive more than three miles to five miles is probably too aggressive of an assumption. Another erroneous belief is that homeowners can be converted to renters, particularly for senior projects. While some traction can be gained by converting homeowners to renters, it is a risky strategy if a property is dependent upon a conversion of this type. In a town of 20,000 people with market-rate rents topping out at $650, for instance, it is questionable whether there is a need to bring low-income housing tax credit (LIHTC) project online at $675 or $700. Rather, it would be better to find a way to bring rents down to at least 10 percent to 15 percent below market. The rent differential between a run-down single-family house and the rate for new LIHTC product can also be problematic. If a substandard single-family home is being rented for $250 per month and LIHTC rent on a new project is $495, it would be challenging to convince someone living on a fixed income that it is worth paying more for better quality housing. Looking carefully at this differential is advised; if it exceeds $75 to $100, it will be difficult for a property to attract renters from this housing stock.
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Industry Trends


Growth in Income Lags Very Far Behind Rises in Rent: Report
The Real Deal (06/29/16) Chen, Cathaleen

Census data from 1960 to the present indicates a noticeable drop in housing affordability nationwide, according to a new report by rental website Apartment List cited by the Wall Street Journal. Although median rents increased by 64 percent between 1960 and 2014, median household incomes grew by only 18 percent in the same time, according to the analysis. That trend is expected to continue. Renters fared the worst between 2000 and 2010, according to the Journal, due to such factors as a recession followed by a housing bust, with inflation-adjusted household incomes declining by 9 percent while rents increased by 18 percent during that period. Other reasons for today's challenging housing situation include land-use restrictions, rising construction costs, and disproportional migration trends. More people are moving to already costly cities like New York and San Francisco. Housing remains expensive because it must rely on domestic resources, according to the Journal. Apartment List cites the worst cities for renters as San Francisco, New York City, Boston, and Washington, D.C. Cost-effective options exist, however, such as Austin, where income growth has matched that of rent in recent years. A report by property management software maker RealPage found that the trend of rising rents and diminishing housing supply has little negative impact on mid- and high-earning renters. It is primarily low-income households that suffer the most from the affordable housing crisis.
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When Will Affordable Housing Advocates Push for More Supply, Fewer Rules?
Forbes (07/12/16) Valdez, Roger

Affordable housing is usually designed for people who earn 60 percent of Area Median Income or less and is paid for through the Low Income Housing Tax Credit program and various other local subsidies. The threshold for affordability has been arbitrarily set by the Department of Housing and Urban Development according to a standard that a unit is affordable if it is priced at 30 percent of a household's gross monthly income or less. The National Low Income Housing Coalition wants the federal government to "increase its investment in housing in order to produce, rehabilitate, and/or subsidize at least 3,500,000 units of housing." This would require $300 billion in a decade. A recent report in California found that neighborhood opposition, design review, and parking requirements drove up costs and limited production. The study also found that dense projects with more and smaller units are also less costly per unit to build. Subsidized projects also suffer when there are specialized, burdensome rules to follow, such as Mandatory Inclusionary Zoning (MIZ). MIZ allows some increases in square footage for market rate housing but with fees or the requirement to forgo rent revenue in some units. Ideally, there should be a collaborative effort among all housing producers to increase the production of all housing by lowering regulatory barriers, not adding more.
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Association News


NAHMA Names Winnie Mei Poster Contest Winner

Winnie Mei, a 10th-grader from Brighton, Mass., has been named the grand prizewinner in NAHMA’s annual AHMA Drug-Free Kids poster and art contest. Her artwork will appear on the cover of NAHMA’s 2017 calendar. Winnie, 16, also receives an all-expenses-paid trip to Washington, D.C., for NAHMA’s Regulatory Issues fall meeting in October, as well as a scholarship of $2,500 from the NAHMA Educational Foundation.
The poster contest is open to children and senior residents 55 years or older who live in a community of a NAHMA or a local Affordable Housing Management Association (AHMA) member company and residents with special needs who live in a permanent supportive housing community or Section 811 community of a NAHMA or a local AHMA member company. This year’s contest tackled an important issue in many people’s lives with the theme, Words That Heal: Stop Bullying, Spread Kindness.
Each child winner of the NAHMA contest receives a $1,000 educational scholarship from the NAHMA Educational Foundation. A $1,000 cash award is made in the name of the adult winners to their community for use in purchasing or funding a project from which all of the community’s residents will benefit. All winners are also featured in the 2017 calendar, which will be available for purchase in September.
To see the complete list of winners, click on the Web Link provided below.
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Initiative to Preserve Multifamily Field Offices

U.S. Rep. Maxine Waters (D-CA), ranking member of the Committee on Financial Services, introduced legislation with 14 other California Democrats to address concerns with HUD’s initiative to consolidate its multifamily offices, known as the Multifamily Transformation.
The bill, Preserving HUD’s Multifamily Field Offices Act of 2016, seeks to preserve adequate asset management staff in each of HUD’s 54 multifamily field offices across the country. HUD’s Office of Multifamily Housing and its network of field offices oversee nearly 30,000 federally insured multifamily properties, and the asset management staff in particular is responsible for managing this growing and increasingly complex portfolio. Read the bill by clicking on the Web Link.
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HUD Publishes New Proposed HCV Administrative Fee Formula Rule

On July 6, HUD published the Housing Choice Voucher Program—New Administrative Fee Formula Proposed Rule regarding new methodology for determining the amount of funding a public housing agency (PHA) will receive for administering the Housing Choice Voucher (HCV) program. Administrative fees under the HCV program are currently calculated based on the number of vouchers under lease and a percentage of the local fair market rent, with an annual inflation adjustment. The new administrative fee formula proposed by this rule is based on a study that measured the actual costs of operating high-performing and efficient HCV programs. In the rule, HUD proposes to adopt the study’s recommended formula with modifications based largely on public comments. The proposed rule outlines the base fee formula calculation and answers questions that were received as part of a solicitation of public comment. HUD is offering the opportunity for public comment on this proposed rule. Comments are due in October. For more information, use the Web Link below.
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NAHMA Honors Vanguard Excellence

NAHMA recognized newly developed or significantly rehabbed affordable multifamily housing communities that showcase high-quality design and resourceful financing by announcing the winners of its annual Affordable Housing Vanguard Awards in June.
The excellence exhibited throughout these multifamily developments demonstrates that affordable housing can be an asset to any community. Vanguard Award winners deliver powerful proof that affordable housing done well can transform neighborhoods as well as the lives of individual residents.
The 2016 winners are:
  • Vanguard Award for New Construction: Small Property (less than 100 units): Wabash Estates Co-op, Baltimore, Md.; Management Company: CSI Support & Development Services, Inc.; Owner: Arlington II Non-Profit Housing Corporation, Warren, Mich. Large Property (more than 100 units): Bristol Commons/Lenox Green, Taunton, Mass.; Management Company: Trinity Management, LLC; Owner: Trinity Taunton Nine LP, Boston, Mass.
  • Vanguard Award for Major Rehabilitation of an Existing Rental Housing Community: Blue Butterfly Village, San Pedro, Calif.; Management Company: Volunteers of America (VOA) National Housing Corporation; Owner: Navy Village VOA Affordable Housing, LP, Alexandria, Va.
  • Vanguard Award for Major Rehabilitation of a Nonhousing Structure: 777 Main, Hartford, Conn.; Management Company: WinnResidential; Owner: Becker & Becker Associates, Fairfield, Conn.
  • Vanguard Award for Major Rehabilitation of a Historic Structure into Affordable Housing: A-Mill Artist Lofts, Minneapolis, Minn.; Management Company: Dominium; Owner: Dominium, Plymouth, Minn.
For more on the Vanguard Awards or about this year’s winners, click the Web Link provided.
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HUD, Comcast Partnership to Provide Internet Essentials to Low-Income Families

HUD and Comcast have announced that residents living in HUD-assisted housing units within Comcast’s service areas are eligible to apply for Internet Essentials, a high-speed internet adoption program for low-income families.
According to HUD, one in four American households still cannot access the internet at home, particularly lower-income families with children. In the 2013 American Community Survey, less than 43 percent of individuals without a high school diploma or equivalent lack home internet access.
Since 2011, Internet Essentials has connected more than 600,000 low-income families to the internet at home and has invested more than $280 million in cash and in-kind support to help fund digital literacy training and education initiatives. Now with the expansion of Internet Essentials, up to 2 million HUD-assisted homes, including Public Housing, Housing Choice Voucher and Multifamily programs, will have access to low-cost internet service.
For more information on the initiative and the top-10 states and cities with the largest numbers of HUD-assisted households in Comcast’s service area, click on the Web Link provided below.
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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.
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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

NAHMA Regulatory Issues Meeting
October 23-25, 2016
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LeadingAge Annual Meeting & EXPO
October 30-November 2, 2016
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July 2016