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Sponsored By:
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.
Sponsored By:
Tax Issues and Tax Reform
"Budding Interest in What Lies Beyond the Tax Reform Horizon"
"Supreme Court Decision on Low-Income Development Tax Breaks Costs Coast Counties"
Congress
"Coalition Urges Congress to Expand Access to RAD"
State and Local Activities
"Landlords, Tenants Unite on Amnesty Plan for Illegal Apartments"
"Oklahoma Creates Its Own Affordable Housing Tax Credit Program"
"65 Projects Receive LIHTCs in Texas"
Management and Compliance
"The Current: Renewable Energy Rules of Thumb--Where Do They Come From?"
Industry Trends
"Affordable Housing Supply Can't Fulfill Demand"
"Land Rush"
Association News
SHCM Blended Learning Series Scheduled for September
NAAEI Presents Webinar Wednesdays
IT’S NOT TOO LATE TO ORDER THE AFFORDABLE HOUSING EDUCATION SESSION RECORDINGS FROM THE JUNE NAA CONFERENCE
NAHMA Announces 2014 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Tax Issues and Tax Reform
Budding Interest in What Lies Beyond the Tax Reform Horizon
Novogradac Journal of Tax Credits (08/14) Novogradac, Michael J.
The top priority of affordable housing and community development stakeholders is ensuring that low-income housing tax credits (LIHTCs) and new markets tax credits (NMTCs) are preserved during tax reform efforts. Assuming that LIHTCs and NMTCs are retained in a reformed tax code, affordable housing advocates need to extend and make permanent the 9 percent credit rate floor. A fixed rate floor provides LIHTC allocating agencies the option to allocate more tax credits to a particular development that accomplishes certain socially beneficial goals. Larger amounts of equity allow developers to lower rents to provide affordable housing to particular groups or to build physical amenities. A 2013 report from the Bipartisan Policy Center's Housing Commission recommended a series of changes to the nation’s housing policy and finance system, including a 50 percent expansion in LIHTC allocations and additional federal gap funding for LIHTC developments. The administration's FY 2015 budget proposal suggests allowing states to increase their LIHTC authority by converting some of their private activity bond (PAB) volume cap into LIHTC allocations. States would be authorized to convert up to 8 percent of their PAB cap to 9 percent LIHTC authority. The maximum possible national increase in LIHTC authority under this proposal would be 23 percent. The conversion rate would be determined by $1,000 times twice the applicable percentage of the 30 percent value LIHTC in December of the previous year.
Supreme Court Decision on Low-Income Development Tax Breaks Costs Coast Counties
Sun Herald (MI) (08/22/14) Nelson, Karen
Coast county tax assessors and officials are criticizing the Mississippi Supreme Court's recent ruling that upholds 2005 state law and regulations on how taxes should be assessed on Section 42 properties, which gives low-income housing developers a tax break. It is estimated that Harrison County, cities, and schools will need to refund $6 million collected over the past several years from developers who got more than $300 million in tax credits. There are 13 low-income housing complexes or subdivisions that fall into the Section 42 category this year in Jackson County. "My position has always been not about the quality or competitiveness, but an inequity in the tax base," notes Hancock County tax assessor Jimmy Ladner. "These projects put a tremendous burden on the tax base." State officials say the way the properties would be assessed was agreed on prior to developers' construction of thousands of suppressed-rent homes and apartment units on the Coast following Hurricane Katrina. Mississippi Home Corp.'s Scott Spivey says it is clear Mississippi says tax credits should not be deemed income when assessors estimate the value of the properties, and that developers must be given the consideration on taxes because they agreed to limit the amount of rent they collect. Coast assessors believe some of developers are inflating costs and leaving the counties little or nothing to tax. "This is a special deal given to a handful of developers, and it's absolutely unfair to every other property owner in the state," Ladner says.
Congress
Coalition Urges Congress to Expand Access to RAD
Affordable Housing Finance (08/11/14) Yentel, Diane; Cadik, Emily
Under the Rental Assistance Demonstration (RAD), public housing authorities (PHAs) are able to strengthen the financial condition of targeted public housing properties for the long term. In June, the Senate Appropriations Committee approved a significant expansion of RAD from 60,000 units to 185,000 units in its FY 2015 Transportation, Housing & Urban Development (THUD) spending bill. The bill also included $10 million to assist in the conversion of apartments that would not be able to make the needed repairs without additional subsidy. However, the House of Representatives did not approve an expansion of RAD in its FY 2015 spending bill, so more education must occur before a final FY 15 THUD appropriations bill can be enacted, which is unlikely until after the November elections. Congress in the meantime will pass a continuing budget resolution (CR) before the fiscal year ends in September in order to fund the government through the elections. Although the nation's public housing stock faces a backlog of repairs exceeding $26 billion, there are public and private resources available for RAD conversions that would help close this gap. The Lift the RAD Cap Coalition hopes at least 180,000 public housing apartments will be preserved and restored to good condition.
State and Local Activities
Landlords, Tenants Unite on Amnesty Plan for Illegal Apartments
Los Angeles Times (08/17/14) Reyes, Emily Alpert
A group of landlords and tenants wants the city of Los Angeles to ease the way for illegal apartments to become legal. The city housing department each year identifies 600 to 700 apartments that had been built without city approval. Landlords claim that many of these nonconforming apartments are completely safe, while tenant advocates say they help provide areas of affordable housing in a high-rent city. To become legalized, the apartments would have to meet safety standards but not certain other rules, such as parking requirements. Advocates of the plan says landlords could come forward and fix problem areas like plumbing or wiring in the absence of a lengthy and costly process to comply with city codes, while tenants could avoid being displaced from moderately safe apartments. It is currently possible for landlords in Los Angeles to attempt to legalize such units, but they say the process is excessively costly and time consuming. The group has not yet to released a written proposal, but tenant and landlord groups say the request for amnesty would not cover granny flats or garages illegally converted into apartments, but would be applicable to apartments created from other units, such as apartments divided up or converted out of existing rooms. The proposed amnesty also would be available only to long-standing units, according to Rick Otterstrom, a director of the Apartment Assn. of Greater Los Angeles. Other cities like San Francisco, Santa Monica, and Ventura have offered similar legalization opportunities.
Oklahoma Creates Its Own Affordable Housing Tax Credit Program
Oklahoman (07/26/14) Mize, Richard
The first priority of affordable housing is people, say housing advocates. "The high demand for affordable housing built specifically for working low-income families and the elderly continues to exceed the housing stock available in Oklahoma, especially in rural areas," says Dennis Shockley, executive director of the Oklahoma Housing Finance Agency (OHFA). During the last session of the state Legislature, lawmakers in the state passed the Oklahoma Affordable Housing Act to create a state version of the federal Affordable Housing Tax Credit Program, which will be overseen by OHFA. The agency already administers the federal version for the state, which adds an average of 1,100 units annually. "We have received applications for five times that many," Shockley says. "The state housing tax credit will go help meet this demand." State tax credits will supplement the federal credits by raising development capital, which reduces financing costs and in turn reduces operating expenses. Projects can qualify for tax credits if they restrict rents and only rent to people whose incomes do not exceed income limits. The state credits will be restricted to $4 million per year and operate as a 10-year credit, and a nine-member committee will review the program after five years.
65 Projects Receive LIHTCs in Texas
Affordable Housing Finance (08/01/14) Kimura, Donna
The Texas Department of Housing and Community Affairs (TDHCA) has selected 65 developments to receive $60.1 million in low-income housing tax credits (LIHTCs). The awards were made through the state housing agency’s 2014 LIHTC cycle, and are expected to help finance 5,407 affordable rental units for individuals and families earning no more than 60 percent of the area median family income. TDHCA officials estimate that this year's credit allocation could have as much as a $549.2 million impact on the state’s economy. In February, the agency received 160 full applications for the round. Minneapolis-based nonprofit real estate developer Artspace has partnered with the El Paso Community Foundation and the city of El Paso to propose a mixed-use arts development. The $11 million Artspace El Paso Lofts project features 51 units of live/work housing for artists and their families, space for nonprofit partners, and space for community events and gatherings. The tax credit brings $8.5 million in upfront equity to the project’s capital budget, allowing Artspace to focus on the final phase of fundraising, with construction likely to start in 2015. Foundation Communities, a nonprofit affordable housing organization, received LIHTC reservations for three projects in Austin, including Bluebonnet Studios featuring 107 units of supportive housing for extremely low-income residents.
Management and Compliance
The Current: Renewable Energy Rules of Thumb--Where Do They Come From?
Novogradac Journal of Tax Credits (08/14) Vol. 05, No. 7 Milder, Forrest David
Rules for development fees have emerged that are consistent with guidelines for the low-income housing tax credit (LIHTC). The IRS statement, Technical Advice Memorandum 200044004, involves a development fee in an LIHTC property that was due and payable not more than 13 years after the development was completed. This 13-year period was not a requirement of the IRS, but was simply in the statement of facts. Additionally, the 13-year period is less than the 15-year "compliance period" that applies to the LIHTC as well as the typical 15 years (or longer) length of an investor's investment. Renewables, in contrast, usually have a five-year recapture period, and similarly shorter lengths of investment. It is not clear if this 13-year time frame is appropriate for renewables. Corresponding with "qualified allocation plans" adopted by the states in connection with the LIHTC, the bulk of the tax equity marketplace assumes that development fees of about 15 percent of other capitalized expenditures are appropriate. In administering the Section 1603 grant in lieu of tax credit program, however, the Treasury has been approving far lower percentages than 15 percent.
Industry Trends
Affordable Housing Supply Can't Fulfill Demand
GlobeSt.com (08/18/14) Rossenfeld, Carrie
Michael Gaber of WNC says the number of affordable housing units put on the market annually by developers is insufficient. Many of the properties worked on are rehab properties, so out of 100,000 units put on the market, perhaps 50,000 might be preservation, he notes. The firm recently closed the WNC Institutional Tax Credit Fund 39 LP, a $125-million institutional low-income housing tax-credit fund that will acquire 25 affordable-housing properties located nationwide. Gaber says that California has a program where steady-use agreements go out for 50-plus years, ensuring they will always stay in the inventory, but requiring significant rehabilitation after 15 to 20 years. WNC's limited partners ensure that a property is in good working condition, he asserts. Gaber also says the impact of the Community Reinvestment Act is stronger in Los Angeles or Orange County, Calif., but not as significant in rural areas because banks do not have as many investments in those areas. The requirements are easy to reach because banks only need to make a few investments to meet the affordable-housing requirements, he adds. The units are just as good, but there are not as many properties being developed, according to Gaber.
Land Rush
Commercial Property Executive (08/01/14) P. 48 Foong, Keat
Apartment development activity is on the rise, even in many high-cost markets. Paul Woodworth, head of SunTrust Community Capital, which provides debt and equity financing for Low Income Housing Tax Credit (LIHTC) development, notes that a lack of land is not necessarily hurting LIHTC developers. "We have a robust pipeline of new construction deals getting done" despite higher land prices and costs, he says, including preservation of older deals, ground-up new construction, and new deals. Tax credit housing developers in major markets may fare better if they target smaller parcels of land or sites that are not suitable for luxury rentals, condos, or even market-rate housing. Anne Wilson, senior vice president of housing and real estate development at the non-profit affordable housing developer Community Housing Works, says 50- to 100-unit-size sites in markets such as San Diego, Orange County, and other high-cost coastal California areas are comparatively accessible. She also says developers should equip themselves with a pool of equity and debt capital that is ready to be deployed immediately. Timothy Henkel, senior vice president of Pennrose Properties, says it is important to construct affordable housing that "the jurisdiction really wants." His company focuses on partnering with non-profits, community development groups, and housing authorities for locally based solutions. He says opportunities can be found via city-owned land in downtown or suburban areas. In high-cost areas like New York or Jersey City, mixed-income housing works best because the market-rate housing can contribute to the economics of the development, Henkel says.
Association News
SHCM Blended Learning Series Scheduled for September
Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification, or to brush up on your housing credit compliance knowledge base. 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 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. For more details, click on the link below and scroll down to the 2014 Webinar Wednesday schedule. Upcoming sessions are listed below.
Sept. 10, 2014 - Rommel Anacan - "Can't We All Just Get Along?" What to Do When Conflict Affects Your Team's Performance
Sept. 24, 2014 - Stephanie Graves - Budget Season: How to Prepare, Execute and Survive
Oct. 8, 2014 - Lisa Trosien - The Path of Lease Resistance
Oct. 22, 2014 - Alexandra Jackiw - 15 Tips To Making Yourself Indispensible at Work
Nov. 5, 2014 - Heather Blume - Outreach Marketing: It's More Than Coupons!
Nov. 19, 2014 - Rebecca Rosario - Getting to "I Do", Again and Again. Keeping the Resident Romance Alive
Dec. 3, 2014 - Kiley Haught - What Your Residents Won't Tell You AND Your Managers Don't Know
Dec. 17, 2014 - Kate Good - Your 2015 Marketing Playbook
IT’S NOT TOO LATE TO ORDER THE AFFORDABLE HOUSING EDUCATION SESSION RECORDINGS FROM THE JUNE NAA CONFERENCE
If you did not attend the NAA Education Conference and Expo this past June, you don’t have to miss the excellent education sessions that were presented in Denver.
NAA’s Education Institute (NAAEI) is once again presenting its “REWIND” program, offering recorded video and PowerPoint-synced audio sessions. Order 20 video and 22 PowerPoint-synced audio sessions from top industry speakers featured at the 2014 Education Conference & Exposition in Denver.
Of special note to SHCM designates -- you can now purchase the entire 2014 Rewind series for $199, a $100 savings for SHCM designates only. Please enter the coupon code REWIND100 to receive your SHCM discount. To order, click on the link below.
The affordable sessions offered during the conference are:
Session 1: NAHMA Presents: Scenarios for Housing Credit Reform— Is There Life Afterward?
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.
Session 2: NAHMA Presents: 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. One 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.
Session 3: NAHMA Presents: The Clipboard Is Dead—Long Live the Tablet!
Most daily and weekly maintenance processes are confined to the flat and lifeless world of a clipboard, pencil and paper. This information is never shared and has little 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. 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.
Session 4: NAHMA Presents: Legislative and Regulatory Issues Affecting 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 affordable multifamily housing participating in HUD, rural housing and Housing Credit programs. Learn about the impact of federal budget appropriations, sequestration and the deficit on funding for affordable multifamily housing programs now and in 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.
NAHMA Announces 2014 Affordable 100 List
NAHMA recently announced its 2014 Affordable 100, a list of the 100 largest affordable multifamily property managers, ranked by affordable unit counts. The list is available at NAHMA’s website via the link below, as well as in the June issues of Affordable Housing Finance magazine and Units magazine.
The NAHMA website version of the list also includes the next 20 largest multifamily property management companies, for a total list presenting the top 120. In addition, the NAHMA website version presents two specialty lists -- the 25 largest housing credit (LIHTC) property management companies, and the 25 largest Rural Development program property management companies. The NAHMA website also provides the listed management companies with the option to include hyperlinks to their own corporate websites, so web visitors can quickly and easily find out more information on a particular company.
The Affordable 100 was created in an effort to accurately determine the size of the portfolio of affordable multifamily units receiving federal subsidy in the United States. It lists affordable units containing at least one of following federal subsidies: HUD Project-based Section 8, Section 42 LIHTC, HOME funds, bonds and USDA Section 515.
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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