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Release of TRACS Revision Delayed
The Tenant Rental Assistance Certification System (TRACS) Release 2.0.3.A has been delayed to 2018. It was previously scheduled for completion Oct. 31, 2017, but the transition will now begin in February 2018. To read the updated timeline, click the Web Link below.
Industry Trends
"A Surprising Way to Increase Property Values: Build Affordable Housing"
"LIHTC Market Gets 'Back to Equilibrium' After 'Intense' 2016"
"Smart Home Services Are Expanding Into Entire Apartment Complexes"
Tax Issues and Tax Reform
"Affordable Housing Market Hurt by Tax Overhaul Uncertainty"
Management and Compliance
"3 Strategies for Maximizing Resident Satisfaction"
"Tips for Implementing Low-Flow Fixtures"
Association News
HUD Issues Guidance on VAWA
Register for Special NAHMA Webinar
IRS Releases Low-Income Housing Tax Credit Rates for July
HUD Updates FY 2017 Funding Provisions for the HCV program
Rural Development Releases FY 2018 Management Fees
NAHMA Releases 2017 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
A Surprising Way to Increase Property Values: Build Affordable Housing
Washington Post (07/06/17) Jan, Tracy
New research by Stanford economists indicates that affordable housing developments built in poor, heavily black communities can lead to greater racial and income integration. "When a corporate developer comes in and builds nicer, new housing, it makes the neighborhood more desirable as a potential place to live," explains Rebecca Diamond, a professor at Stanford’s Graduate School of Business who authored the study with her colleague Tim McQuade. The researchers analyzed a decade's worth of relevant data around more than 7,000 developments built with federal tax credits in 15 states, finding that constructing affordable housing in low-income, high-minority neighborhoods lowered the share of black residents in the surrounding community by about 3 percentage points. It also improved racial integration in more affluent, high-minority communities. The most intense effect is felt within less than a quarter mile, says Diamond. In neighborhoods where median incomes fell below $26,000 a year, the researchers saw home values appreciate 6.5 percent within a tenth of a mile of the housing development. However, such benefits fail to emerge when the affordable housing complexes are built in wealthier, white neighborhoods, according to the researchers. In such neighborhoods with median incomes above $54,000, property values declined 2.5 percent within a tenth of a mile of the housing development, or about two city blocks. The affordable apartments also decreased diversity, but did not impact crime rates.
LIHTC Market Gets 'Back to Equilibrium' After 'Intense' 2016
Novogradac (07/06/2017) Vol. 08, No. 7 Garcia, Teresa
Low-income housing tax credit (LIHTC) investors last year typically paid in the low- to mid-90-cent range for tax credit investments in areas not targeted for Community Reinvestment Act (CRA) consideration, according to a survey in the Novogradac Journal of Tax Credits' July 2016 issue. The situation has changed considerably since then. "Pricing right now, depending on how desirable it is for CRA, is from the low 80s to right about a dollar or high 90s," says Raoul Moore, senior vice president of tax credit syndication for Enterprise Community Investment Inc. This year, the strongest CRA areas are still in the 3 percent to 5 percent range, but economic investors are slowly coming back as national product yields climb to a more desirable low-to-mid-5 percent range. "We are now in a bit of a more temperate approach, with investors getting more comfortable with the idea of underwriting to a specific tax rate without upward or downward adjusters," says Jennifer Seamons, senior vice president at Key Community Development Corporation. A key issue going forward is where corporate tax rates will end up settling. Moore says, "Most investors were initially underwriting at 20 percent tax rate, but a lot of the market is settled in right now at 25 percent." Meanwhile, the industry continues to pursue efforts to urge lawmakers to maintain and enhance the LIHTC in tax reform. Moore asserts, "...we have to continue to be really vigilant about getting elected officials out into their districts and states and see what's actually getting built."
Smart Home Services Are Expanding Into Entire Apartment Complexes
Curbed National (06/26/17) Zie, Jenny
More and more companies are exploring bringing smart home systems into entire apartment communities instead of just single-family houses. While turning a rental unit into a smart residence is doable for resourceful and tech-savvy apartment residents, these new services will enable apartment owners and operators themselves to control hundreds of smart devices in a community at once. One such firm expanding into this niche is Vivint, a smart home provider that also makes its own devices like smart locks and security cameras. Its latest service, dubbed Smart Properties, allows apartment managers to design their own smart home system, which the company will then install on site. Utilizing an interactive central dashboard, property management can take care of resident service requests, as well as provide keyless entry for staff contractors for unoccupied units and monitor smart thermostats for efficient energy use. A similar service dubbed SmartProperty is on the verge of launching from property management software provider Entrata. It will essentially offer all the same functionalities, but with the benefit of already having approximately 3.5 million apartment units in more than 20,000 properties on board. This means that operators who already use Entrata's software for managing payments, leases, and accounting can just opt to enroll in the new smart home offering. Entrata will come and install a central hub that enables its software to talk to the breadth of smart devices available.
Tax Issues and Tax Reform
Affordable Housing Market Hurt by Tax Overhaul Uncertainty
National Public Radio (07/05/17) Rios, Simon
Experts say President Donald Trump's anticipated tax overhaul has reduced the value of low-income housing tax credits (LIHTCs) by 10 percent to 15 percent. Funding for units nationwide is now in question, and less housing may be built as a result. The $8 billion federal tax credit is used to finance 9 out of 10 affordable units built in the United States. Esther Schlorholtz heads community investments at Boston Private bank, which is heavily invested in affordable housing tax credits. "Our analysis is that we will need to wait to make a more prudent decision on our equity investments," she says. LIHTC now supports the building of roughly 100,000 affordable units annually. Michael Novogradac, who sits on the board of directors of The Affordable Housing Tax-Credit Coalition, says the situation could get even worse if the corporate tax rate is cut more than investors are expecting. Meanwhile, Trump wants to cut funding to the Department of Housing and Urban Development by 13 percent. Those cuts could threaten programs that provide gap funding to affordable housing developments. However, a bipartisan bill in the Senate calls for expanding the tax credit program by 50 percent. Supporters say that expansion would lead to 400,000 new homes over a decade. While that number may sound high, more than 4 million Americans who now qualify for low-income housing have no access to it.
Management and Compliance
3 Strategies for Maximizing Resident Satisfaction
Multifamily Executive (07/06/17) Wick, Cindy
To stay competitive, today's apartment owners and operators must have a strategy for constantly providing optimal service and maintaining a strong sense of community for their residents. Many multifamily housing properties are touting themselves as pet-friendly, then going the extra mile by offering such things as dog-walk areas and on-site pet spas. Another strategy is to offer unique resident events and activities. Today's residents, especially those in the Millennial demographic, place a tremendous value on community. That's why hosting events like barbecues and ice cream socials that foster this feeling is essential. To go the extra mile, try and add a personal touch. For instance, Western National's Parcwood Apartment Homes in Corona, Calif., provides handwritten "letters from Santa" during the holidays to all children whose parents living on the premises request them. Finally, use social media to drive engagement. When apartment owners and managers regularly update their social media channels and community website with engaging content, residents feel an even greater sense community and, in turn, encourages them to connect more with the property. Apartment managers should also regularly update their ILS sites -- Apartments.com, Zillow, and so forth -- to source new prospects and ensure that all rental information is up-to-date.
Tips for Implementing Low-Flow Fixtures
Buildings (06/28/17)
Whether you’re phasing out the last few inefficient restroom fixtures in your building or simply replacing yesterday’s efficient models as they reach the end of their useful life, property managers can make the process relatively hassle-free by approaching the selection process in a methodical manner. The article's author details three tips for implementing low-flow fixtures in your facility's men's and women's bathrooms. Number one, "fit the fixtures to your facility." There are a variety of options available that can help reduce water use depending on the building's needs and what ownership is comfortable with. There are three key toilet styles to choose from, for example, along with waterless and low-flow urinals. With regards to sinks, simple aerators can be installed on many faucets to reduce the amount of water coming out and can reduce water use by as much as 75 percent. Tip two is to "compare with similar buildings." It's always a good idea to reach out to fellow building managers, especially those who have recently completed similar projects, to get an idea of their costs and resulting savings. Speaking to colleagues, particularly those located closest to you, is ideal as you know they more than likely pay the same utility rates you do. Finally, tip three entails "retraining staff on maintenance." To this end, facility managers should review the recommended maintenance schedule and procedures with staff, especially when installing an unfamiliar fixture style such as a waterless urinal.
Association News
HUD Issues Guidance on VAWA
On June 30, the Department of Housing and Urban Development (HUD) issued housing notice (H 2017-05), Violence Against Women Act (VAWA) Reauthorization Act of 2013 – Additional Guidance for Multifamily Owners and Management Agents. As stated in the guidance, “this notice provides guidance to owners and management agents of HUD multifamily assisted housing on the requirements of the Violence Against Women Reauthorization Act of 2013: Implementation in HUD Housing Programs, Final Rule …. This notice does not encompass every aspect of the VAWA Final Rule and should be used in conjunction with the VAWA Final Rule. This notice supersedes Housing Notices H 2010-23 and H 2009-15.” The VAWA notice applies to the following programs: Project-based Section 8 programs, Section 202/162 Project Assistance Contract, Section 202 Project Rental Assistance Contract (PRAC), Section 202 Senior Preservation Rental Assistance Contracts, Section 811 PRAC, Section 811 Project Rental Assistance, Section 236 (including RAP), and Section 221(d)(3)/(d)(5) Below Market Interest Rate. To read the notice, click on the Web Link provided.
Register for Special NAHMA Webinar
There is still time to register for the NAHMA Presents Key People Skills for Property Management Staffers: Managing Time to Maximize Performance interactive webinar. The live 90-minute webinar takes place Aug. 1, beginning at 2 p.m. Eastern, and is led by Brenda Harrington, founder of Adaptive Leadership Strategies LLC. Register for the training session through your local AHMA today. Registration closes Wednesday, July 26.
Topics for the session include:
- How to create new habits for planning and scheduling
- Shifting from spending time to investing time
- Maximizing your use of resources
- The benefit of networking for managing time
- Learning how to treat time as an investment
The webinar is brought to you by NAHMA and is hosted by Rocky AHMA. Contact information for your local AHMA can be found by visiting the AHMA Directory using the Web Link below and clicking on the AHMA nearest to your location.
IRS Releases Low-Income Housing Tax Credit Rates for July
The IRS issued Revenue Ruling 2017-14 on June 19, which provides various prescribed rates for federal income tax purposes, including applicable federal interest rates, adjusted applicable federal interest rates and adjusted long-term and tax-exempt rates for July 2017. As provided in the ruling, Table 4 contains Low-Income Housing Tax Credit (LIHTC) Appropriate Percentages Under Section 42(b)(1) for July 2017. Under section 42(b)(2), the applicable percentage for nonfederally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9 percent. Click on the Web Link to view the revenue ruling from the IRS.
HUD Updates FY 2017 Funding Provisions for the HCV program
HUD released notice, PIH 2017-10 (HA), regarding implementation of the Fiscal Year 2017 funding provisions for the Housing Choice Voucher (HCV) program on June 29. Funding is provided through the Consolidated Appropriations Act 2017, which HUD allocates to public housing agencies (PHA) as described in the notice. Renewal funding is based on validated Voucher Management System leasing and cost data for the prior calendar year, Jan. 1-Dec. 31, 2016. The implementation notice provides information on how HUD calculates Housing Assistance Payments Contract renewal funding for each PHA’s HCV program. The notice encourages PHAs to pay particular attention to the set-aside funding provisions listed in Section 5 and Attachment A. To view the notice, click the Web Link below.
Rural Development Releases FY 2018 Management Fees
On July 6, the Fiscal Year 2018 Management Fees were posted on the U.S. Department of Agriculture (USDA) Rural Development website. Additionally, attachment 3-F of the MFH Asset Management Handbook, Chapter 3 was revised to reflect the FY 2018 Management Fee. The management fee was increased by the 2017 Operating Cost Adjustment Factor for each state. The fees will be used for the FY 2018 budget cycle beginning Jan. 1, 2018. All management fees have been rounded up to the nearest dollar. To view the updates, click on the Web Link.
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.
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 MAXIMIZE: Multifamily Asset Management Conference
October 2-4, 2017
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NAHMA Regulatory Issues (Fall) Meeting
October 22-24, 2017
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LeadingAge 2017 Annual Meeting & EXPO
October 29-November 1
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