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NAHMA Announces Launch of New Advanced Issues in HUD Occupancy Course
The National Affordable Housing Management Association (NAHMA) recently announced the launch of its new Advanced Issues in HUD Occupancy course.
The Advanced Issues in HUD Occupancy course is a comprehensive program designed to cover advanced topics related to working with the HUD 4350.3 Occupancy handbook (version REV 1-Change 4), such as managing mixed-finance properties, managing corporate access to HUD secure systems, managing front-line staff in their occupancy compliance duties, and more.
Development of the NAHMA Advanced Issues in HUD Occupancy course is sponsored by Yardi, a leading provider of high-performance software solutions and services for the real estate industry since 1984.
Similar to its other courses, NAHMA will offer the new Advanced Issues in HUD Occupancy course through its affiliated state, local and regional Affordable Housing Management Associations (AHMAs). The first offerings of the new course are expected to be held in the first quarter of 2015. For more details, click on the link below.
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Tax Issues and Tax Reform
"IRS Releases Final LIHTC Audit Technique Guide"
Congress
"National Summit Yields Calls for Bipartisan Solutions to Housing Challenges"
State and Local Activities
"Study Finds a Few Ways to Lower Affordable Housing Costs Per Unit"
"Multifamily Housing Under City Council Scrutiny"
"Some Oregon Landlords Still Turn Away Section 8 Tenants"
Green Building
"Fannie Mae Introduces ENERGY STAR Certification for Multifamily Buildings"
Court-Related Activity
"Supreme Court to Hear LIHTC Case"
Market and Program Trends
"LIHTC Resale Market Flourishing"
Industry Trends
"A Market Under Pressure"
Association News
HUD Multifamily Transformation Progresses
Deadline Nearing for NAHMA's Communities of Quality® Awards
NAHMA 2015 Calendars Now Available
NAHMA Announces 2014 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Tax Issues and Tax Reform
IRS Releases Final LIHTC Audit Technique Guide
JDSupra (09/22/14) Cockerham, Scott
The IRS has finally released an update to its Audit Technique Guide for the low-income housing tax credit (LIHTC) program. The long-anticipated release marks the first official update published since 1999. IRS examiners can turn to the guide when auditing owners of LIHTC properties. The updated guide expands the definition of "Residential Rental Property" in accordance with Notice 88-91. Among other changes, the update clarifies that a deferred developer fee may be documented by a note or "other applicable documents evidencing the debt." There is also a new section entitled "Emergency Housing Relief." The IRS made a draft available for public comment from December 2013 through March 2014, and 19 groups and individuals joined agency personnel in providing feedback.
Congress
National Summit Yields Calls for Bipartisan Solutions to Housing Challenges
Novogradac Journal of Tax Credits (10/14) Vol. 5, No. 10 Lawrence, Peter
A bill to extend expired or expiring tax provisions is widely expected to be on the to-do list of Congress when it returns Nov. 12. Negotiations between the House and Senate on tax extenders are likely to focus on which extenders in the EXPIRE ACT, approved by the Senate Finance Committee, should be made permanent. This would be good news for the low-income housing tax credit (LIHTC) as well as the new markets tax credit (NMTC), renewable energy production tax credit (PTC) and investment tax credit (ITC). The outcome of the November election will likely affect which and how many extenders, if any, are made permanent. The Bipartisan Policy Center (BPC) hosted its 2014 Housing Summit in Washington, D.C., on Sept. 15-16, with housing policy stakeholders reasserting the traditional bipartisan history and support of housing. The summit considered many key housing policies under debate, including increasing the reach of the LIHTC. BPC co-founder George Mitchell noted that President Ronald Reagan signed the LIHTC into law. Rep. Charles Rangel (D-N.Y.) and former congressmen John Danforth and Jack Kemp also expressed support for the LIHTC.
State and Local Activities
Study Finds a Few Ways to Lower Affordable Housing Costs Per Unit
California Planning & Development Report (10/14) Bridegam, Martha
California's state housing finance administrators have finally published a long-delayed study on the cost of building affordable housing. New construction costs averaged about $288,000 from 2001 through 2011 for all units financed by the California Tax Credit Allocation Committee (TCAC). Those units would have been financed primarily with state and federal low-income housing tax credits. The report provided no single reason for the state's high costs per unit, but noted that costs rise when restrictions are added due to the demands of a particular location or cooperating funding source. Economies of scales tend to help, and are possible when a big developer, a big project or a general contractor was involved. In general, the study concludes that the choices developers make can influence costs. Moreover, the report suggests that the state could place greater emphasis on cost containment or cost efficiency when awarding housing tax credits.
Multifamily Housing Under City Council Scrutiny
Des Moines Register (10/19/14) Meinch, Timothy
Des Moines, Iowa's multifamily housing arena is being scrutinized by the City Council, which wants to set a long-range plan for multifamily housing while overhauling the city's tax-abatement policy. City council staff point out that since the creation of the Federal Low Income Housing Tax Credit program in 1987, 75 percent of all the program's approved projects in the Des Moines metro area have been built in the city. The council's efforts coincide with the Polk County Housing Trust Fund's Housing Tomorrow initiative in an effort to create the first regional plan for affordable housing. The plan would cover Polk and parts of Dallas, Warren, and Madison counties. In Des Moines, residents and council members have already identified sections they believe are over-saturated with multifamily and affordable housing. Ward 2, for instance, has gained approval for four affordable-housing developments since 2012, for a total of 256 new affordable units. But at a City Council meeting in October, City Manager Scott Sanders informed developers in an announcement that the city is not pursuing a moratorium on affordable housing and is open for business. Sanders also reminded officials and contractors that application deadlines are approaching for the Iowa Finance Authority, which issues all of the state's low-income affordable housing tax credits. Some council members have proposed requiring support from school districts for new affordable housing projects. "We need more of the tax credits in our communities to rebuild dilapidated properties that are a scourge in our neighborhoods," said Council member Chris Coleman.
Some Oregon Landlords Still Turn Away Section 8 Tenants
Associated Press (10/18/14) Hall, Bennett
Some landlords in Corvallis, Ore., are refusing to accept Section 8 vouchers even though doing so constitutes discrimination under Oregon fair housing laws. Bob Loewen, a rental housing specialist with the city of Corvallis, says at least a dozen property owners in Linn and Benton counties still have a blanket policy against accepting the vouchers. Pegge McGuire, executive director of the Fair Housing Council of Oregon, says, "In general ... only one in 10 people who experience illegal discrimination try to do anything about it." Property owners can be fined up to $11,000 for discriminating against Section 8 recipients under state law, although it only requires landlords to consider all rental applicants equally, whether they have a voucher or not. About 2,500 households in Linn and Benton counties currently have Section 8 vouchers, and there are another 3,000 names on the waiting list. Housing authority data reveals that just 62 percent of Linn County recipients are able to find Section 8 housing before their vouchers expire within two months of issuance, while the success rate in Benton County is just 53 percent. Scott Lepman of Lepman Properties, which owns and manages rental units in Albany, says he has worked with the program for years and has not found Section 8 tenants to be any more troublesome than other renters. The application requirements for Section 8 exclude some potentially risky individuals before a voucher is issued, such as violent criminals and drug dealers. Oregon's Housing Choice Act has also created a state-supported fund that reimburses landlords who have trouble collecting on court judgments against irresponsible tenants, up to $5,000.
Green Building
Fannie Mae Introduces ENERGY STAR Certification for Multifamily Buildings
EcoBuilding Pulse (09/16/14) Gloede, Katie
Fannie Mae's recent report, "Transforming Multifamily Housing: Fannie Mae’s Green Initiative and ENERGY STAR for Multifamily," demonstrates how loans can help make energy upgrades more affordable for owners of multifamily housing units. The report includes a breakdown of loans available for affordable and market-rate housing, as well as the findings of a 2011 survey of more than 1,000 multifamily building owners in the U.S. conducted with the U.S. Environmental Protection Agency. The report includes data on energy use and water use by region, property type, and affordable versus market-rate housing. Fannie Mae used the findings to develop the new 100 ENERGY STAR score system for multifamily housing. With the new system, ENERGY STAR buildings are compared to similar buildings, so an ENERGY STAR score of 30 means the building performs 30 percent more efficiently than similar buildings, and scores of 75 or higher earn ENERGY STAR certification. The survey found the least efficient properties use three times the energy and six times the water per square foot compared to the most efficient properties, which can amount to more than $165,000 in additional energy costs annually. Reducing electricity use by 15 percent and gas by 30 percent in the U.S. multifamily housing stock could save $3.3 billion a year, according to the study. Special Fannie Mae loan programs and government subsidies would make energy upgrades very cost-effective for both affordable and market-rate multifamily properties.
Court-Related Activity
Supreme Court to Hear LIHTC Case
Affordable Housing Finance (10/07/14) Kimura, Donna
The U.S. Supreme Court has agreed to hear a case involving Texas' low-income housing tax credit (LIHTC) program. A lawsuit filed by the Inclusive Communities Project (ICP) accuses the Texas Department of Housing and Community Affairs (TDHCA) of discrimination based on race because TDHCA disproportionately approved LIHTC developments in mostly minority neighborhoods while disproportionately rejecting LIHTC developments in predominantly Caucasian neighborhoods. The Supreme Court will determine if the disparate impact theory can be used in claims made under the Fair Housing Act. No intentional discrimination has to be proven under the theory of liability under which statistics are used to show that a group is harmed by policies, explains attorney Michael W. Skojec. ICP has also filed suit against the Treasury Department and the Office of the Comptroller of the Currency on grounds that the agencies violated their duties to expand fair housing under the Fair Housing Act. Oral arguments are expected to be heard in early 2015, with a decision coming sometime in June. If the high court supports ICP’s claims, it would likely effect how and where housing credits are allocated. Poorer or minority neighborhoods would potentially not be able to build new LIHTC developments or renovate existing properties because there would be more emphasis on building LIHTC properties in comparatively affluent areas.
Market and Program Trends
LIHTC Resale Market Flourishing
Affordable Housing Finance (10/06/14) Fioramonti, John
Marcus & Millichap's Tax Credit Group specializes in the resale of low-income housing tax credit (LIHTC) properties. The company exceeded the $1 billion threshold in 2013 with overall sales of $1.17 billion. The Tax Credit Group says there is strong competition for multifamily assets, which is pushing market-rate cap rates to unprecedented lows. First-year yields of 7 percent to 10 percent range were common in the affordable housing sector. Investors also found the stability of tax credit assets comparable with Class B and C properties. In 2014, there has been an increase in the median LIHTC cap rate to 7.2 percent in the Tax Credit Group's fee simple transactions. In those sales, the median price per unit is $59,900, although prices vary widely by region. The highest price per unit in a single transaction the company closed this year was in Anaheim, Calif., where the asset traded at $160,300 per unit. The average vacancy rate of the 133 fee simple transactions closed by the Tax Credit Group was 5.7 percent, while CoStar reported an average vacancy rate of 5.5 percent for B/C class properties during the same time. However, LIHTC restrictions prevent major rent appreciation when compared with B/C class market-rate rents. The average LIHTC asking rent was $726 per month in 2013, which has increased to $755 per month for LIHTC properties, while B/C class properties are averaging $908 per month.
Industry Trends
A Market Under Pressure
Affordable Housing Finance (10/16/14) Kimura, Donna
Looking forward to 2015, high demand for low-income housing tax credits (LIHTCs) from banks and other investors is expected to continue. "We anticipate that equity pricing will remain very competitive," says David Leopold at Bank of America Merrill Lynch. "Urban transactions continue to get more favorable terms and prices, but rural markets are surprisingly robust." Healthy investor demand for LIHTCs has kept prices high for developers with credits to sell, indicating that investor returns have declined in the second half of 2014. Jeff Weiss at Hunt Capital Partners, a LIHTC syndicator, predicts that as prices increase and yields decline heading into 2015, financial investors may exit the market or reduce the amount of their investments, potentially resulting in prices leveling off in 2015. Returns on national multi-investor funds have fallen to between 6.5 percent and 6.75 percent in the fourth quarter, dealmakers note, even though reports assert that yields need to remain at least 7 percent to satisfy economic investors and keep them in the market. Investors also will likely keep close tabs on rising interest rates because they could affect 4 percent LIHTC and bond deals that typically carry a higher level of debt. Investors and syndicators also note the recent emergence of Rental Assistance Demonstration (RAD) program deals in the market, which allow public housing authorities and owners of HUD-assisted properties to convert units to project-based Sec. 8. The RAD program could enable existing developments to preserve their affordability and finance renovations by using LIHTCs.
Association News
HUD Multifamily Transformation Progresses
In early September 2014, HUD’s Office of Multifamily Housing moved into the second of five waves of its Multifamily for Tomorrow (MFT) field office transformation, focusing on development of a Midwest Region.
Multifamily offices in Chicago, Minneapolis, Detroit, Columbus, Cleveland, Indianapolis, and Milwaukee are being streamlined into one Midwest Region. Chicago will serve as the Regional Center, with Minneapolis and Detroit as the Regional Satellite Offices. Asset Management will continue to operate in the remaining field offices.
In keeping with previous commitments to help staff adjust and maintain productivity during the transition, HUD will reallocate some of the workload to different Multifamily offices or to third-party vendors in Production (Summit Consulting, LLC) and Asset Management (Alpine Companies, Inc.).
Elements of this initiative include workload sharing, digitization of property records, adopting industry best practices in Production and Asset Management, and streamlining the Multifamily organizational structure.
MFT will take place across the country in five consecutive waves over two years, and will include the following components: National Workload Sharing, the Underwriter Model and risk-based processing in Production, the Account Executive Model in Asset Management, and streamlining the organizational structure in headquarters and in the field.
For more details, click on the link below.
Deadline Nearing for NAHMA's Communities of Quality® Awards
November 7, 2014 is right around the corner, so prepare your submissions now for NAHMA's Communities of Quality® (COQ) Awards Program. The deadline for submitting an application to a local AHMA to become a Nationally Recognized Community of Quality® in time to also submit an awards entry has passed, but if a property has been recognized, competing for an actual COQ Award is another rung up the ladder of success.
“A COQ Award acknowledges that a property and a management company exemplify the very best in high-quality affordable housing,” said NAHMA President Gianna Solari, FHC, SHCM, NAHP-e. “It demonstrates what a community asset affordable housing is.”
NAHMA is also pleased to announce that this year’s COQ Awards program will be jointly sponsored by HD Supply Multifamily Solutions, a leading supplier of maintenance and renovation products to the multi-housing industry, and Navigate Affordable Housing Partners, a leading provider of consulting and development services to public housing authorities and the HUD Section 8 project-based contract administrator (PBCA) for Alabama, Mississippi, Virginia and Connecticut.
An overview of the program and the National Recognition program and the awards’ detailed application information and submission materials are available via the link below.
NAHMA 2015 Calendars Now Available
NAHMA recently announced that the 28th edition of its Drug-Free Kids Calendar is now available for purchase. The calendars feature outstanding original artwork by children and seniors and special needs adults living in affordable multifamily housing.
In addition to the drug-free message, this year’s contest had a sub-theme that reinforces a message about positive uses of time. This year’s contest theme was one of celebration: “Join the Dance of Life: Celebrate Music, Arts and Crafts.”
The full-color calendars feature the artwork of children and seniors who reside in affordable, multifamily housing all across the country. Children (grades K-12), seniors (age 62 or older) and special needs residents competed in the national calendar contest and winners were selected by a panel of independent judges. Children and seniors competing in the national contest are selected from the thousands who participate in the regional poster contests sponsored by local Affordable Housing Management Associations (AHMAs) across the country.
The grand-prize winner receives a $2,500 scholarship from the NAHMA Educational Foundation, national winners receive $1,000 scholarships and Honorable Mentions receive a $100 scholarship. In addition, the grand-prize-winning artwork is printed on the cover of the 2015 calendar, with the other artwork appearing inside and on the back cover.
Calendars are $5.50 each and can be ordered from NAHMA’s website at http://www.nahma.org/store, or by calling (703) 683-8630 ext. 115. Because of its strong anti-drug message, the calendar is an allowable project expense for managers of housing subsidized by HUD and the Department of Agriculture. Tax credit properties that purchase calendars benefit twofold: by supporting the drug-free message and their own commitment to social services, and potentially obtaining more points in the funding-allocation process.
For more details, click on the link below.
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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