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Senator Proposes Middle-Income Tax Credit
Sen. Ron Wyden (D-OR) introduced a bill in September to create a Middle-Income Housing Tax Credit (MIHTC), based on the Low-Income Housing Tax Credit (LIHTC) model. The new credit is designed to encourage the building of affordable rental housing for middle-income Americans. Under the bill, the federal government would allocate tax credits to the states based on population. State housing authorities would then allocate the tax credits to developers through a competitive process. To read the Senate Committee on Finance press release, which includes links to a one-page and a section-by-section summary, click on the Web Link provided.
Industry Trends
"Affordable Housing at 60: Insiders Look Ahead Three Decades"
"Easy Appliance Integration Makes Modernizing Kitchens in Multifamily Dwellings More Affordable"
"LIHTC Unit Numbers Decline"
Tax Issues and Tax Reform
"Low Income Housing Tax Credits in Connecticut: Should They Affect a Municipal Property Tax Bill?"
HUD-Related Activity
"RAD Drawing New Capital Into Public Housing"
Green Building
"Green Financing Programs Take Off"
State and Local Activities
"VHFA Revising Housing Tax Credits, Seeks Input"
Association News
Take SHCM Blended Learning Course Online
Deadline for COQ Awards Approaches
Purchase a One-Of-A-Kind Gift
HUD Releases Utility Allowance Factors for FY 2017
Assistance for Those Affected by Flooding and Hurricane Matthew
NAHMA Releases 2016 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
Affordable Housing at 60: Insiders Look Ahead Three Decades
Novogradac Journal of Tax Credits (10/16) Vol. 7, No. 10 Stanhope, Brad
The Low-Income Housing Tax Credit (LIHTC) is widely viewed as the most successful federal affordable housing program in history. The LIHTC is the result of the Tax Reform Act enacted on Oct. 22, 1986. Now the Novogradac Journal of Tax Credits has asked industry experts for predictions on how affordable housing will look 30 years from now. Tom Dixon, vice president of acquisitions for Boston Capital, believes the biggest change could come as early as 2017 or 2018 when there is tax reform. Phil Melton, executive vice president at Bellwether Enterprise Real Estate, expects the tax credit program will still be here in 2046, but says there needs to be an expansion and increase in the per-capita allocation for bonds and tax credits. The idea of expanding workforce housing was a common theme, while several insiders also said they expect a strengthening of the connection between affordable housing, transportation and social services. Nearly all affordable housing insiders expressed concern about the rising cost of development. Experts suggested that what could be done now to improve affordable housing three decades down the road is start with a floor for the 4 percent LIHTC and an increase in 9 percent LIHTC allocations.
Easy Appliance Integration Makes Modernizing Kitchens in Multifamily Dwellings More Affordable
Multifamily Executive (10/01/16)
The kitchen is widely regarded as the heart of the home, so it makes sense that it's going to be a driver for apartment renters before they move in to a new unit. For multifamily housing owners and remodelers, kitchen updates can be expensive. Even a modest remodel can cost more than $10,000. In apartment communities, updating each unit quickly adds up, and new appliances often take a formidable chunk of the budget. However, it's more important than ever for apartment owners and developers to find ways to distinguish their properties from the competition. For example, more than 400,000 new multifamily units were built last year, states the Harvard Joint Center for Housing Studies. These new developments, which feature modern designs and appliances, continue to be built in response to demand and are spurring growing expectations from renters and buyers as a result. Modern kitchens are desirable to renters because they include dependable and energy-efficient appliances that make it easy to save energy and water. Of course, the pressure to upgrade at an affordable price narrows the possibilities for multifamily owners and remodelers. If an owner or remodeler isn't upgrading the entire kitchen, then it becomes imperative to find new appliances that can fit with existing ones.
LIHTC Unit Numbers Decline
Affordable Housing Finance (09/15/16) Kimura, Donna
According to the National Council of State Housing Agencies (NCSHA), Low-Income Housing Tax Credits (LIHTCs) were reserved to 1,396 developments with 98,539 affordable units in 2014. This amounts to 1,044 developments with 62,054 affordable units receiving 9 percent housing credits, and 352 developments with 36,485 affordable units receiving 4 percent housing credits. About 3,300 of the affordable units had originally received an allocation in a prior year and may have been counted in an earlier survey as well. Overall, the number of units receiving 9 percent and 4 percent of credits was down 4.5 percent from 103,122 units in 2013. NCSHA indicates that the number of units receiving 9 percent credits rose slightly to 62,054 in 2014 from 58,823 in 2013, but the number of bond-financed units declined to 36,485 from 44,299. States were financing more than 70,000 units under the 9 percent credit program from 2006 to 2010, attributed in part to a temporary 10 percent increase in LIHTC authority under the 2008 Housing and Economic Recovery Act. "There's been a slight decline (in LIHTC units) over the last few years," says Jennifer Schwartz, assistant director for tax policy and advocacy at NCSHA. "It depends on how many housing credits are allocated to individual projects." She notes that if states are financing more developments aimed at residents further down the income spectrum, those deals often require more LIHTC equity than projects serving residents closer to the upper income limits of the program.
Tax Issues and Tax Reform
Low Income Housing Tax Credits in Connecticut: Should They Affect a Municipal Property Tax Bill?
National Law Review (09/29/16) Schwartz, Joseph B.
The Supreme Court recently heard oral arguments in Nutmeg Housing Development Corporation v. Town of Colchester, a tax appeal challenging the assessment of the value of a Colchester, Conn.-based affordable housing project. This case is of interest due to the dispute over whether Low-Income Housing Tax Credits (LIHTCs) should affect the fair market value of the subject property for tax assessment purposes. The trial court's decision allowed the municipality to add the present value of LIHTCs to the value of real property used for affordable housing for assessment. However, the plaintiff argued that courts in Connecticut and elsewhere have concluded that LIHTCs are "intangibles," and LIHTCs should not be subject to taxation because Connecticut prohibits the taxation of intangibles. Observers say the outcome of the case likely will have a major impact on the sustainability of low-income housing projects, as the developers of such projects often rely heavily on the tax burdens that LIHTCs afford them.
HUD-Related Activity
RAD Drawing New Capital Into Public Housing
Affordable Housing Finance (09/21/16) Kimura, Donna
The U.S. Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration Interim Report shows that the Rental Assistance Demonstration (RAD) program is leveraging $9 in capital for every $1 of public housing funds. Under RAD, public housing authorities (PHAs) can convert their public housing units to Project-Based Section 8 contracts, providing the properties with a more stable and long-term funding platform and putting PHAs in a better position to leverage additional financing to perform needed capital improvements. "I was pleased the report confirmed my gut instinct, which is the concept of RAD is working," says Tom Davis, director of HUD's Office of Recapitalization. "The second point that is noteworthy is the nine-to-one leverage for every dollar of public housing funds. That's a high-leverage ratio." RAD comes at a time when approximately 10,000 distressed public housing units are removed from operation each year, and Davis calls it an important tool to help the nation deal with its affordable housing crisis. "The bottom line of the report—that this is an approach that makes sense and is working in this budget-constrained environment that we're in—is really powerful," Davis says. The report indicates that through fall 2015, 423 PHAs submitted 1,078 applications for RAD conversion, accounting for 14 percent of all PHAs and 16 percent of all public housing developments. As of October 2015, 185 projects with 19,255 public housing units had completed the conversion process, with $2.5 billion in financing and only $250 million of that amount coming from public housing funds. The second phase of HUD's evaluation will focus on the success of RAD is at improving the physical and financial conditions of federally assisted properties and how tenants have been impacted.
Green Building
Green Financing Programs Take Off
Multifamily Executive (09/29/16) Ascierto, Jerry
Fannie Mae, Freddie Mac, and the U.S. Federal Housing Administration (FHA) have lending programs designed to recognize green building measures by embedding the benefits of conservation into their underwriting and all-in rates. The implication is multifamily owners can get additional loan proceeds, and better pricing, to make energy—and water—efficiency improvements. In 2009, the FHA started offering mortgage insurance premium discounts on green multifamily loans, and in 2012 Fannie Mae deployed its own green financing program, and Freddie Mac launched a competing program in August 2016. Partner Energy president Tony Liou says all three programs offer preferred pricing, and he notes "HUD is by far the greatest discount, anywhere up to 40 basis points [bps] in lending and 75 bps in your closing costs." Partner Engineering and Science's Drew McCreery says few changes in the multifamily space have been as big as FHA's move to exclude green-focused lending programs from the current ceiling of $36.5 billion. Fannie Mae's green loan channels include a program to underwrite 75 percent of an owner's projected cost savings and 25 percent of tenant-paid savings, a green building certification pricing break, and a product offering reduced pricing for affordable housing properties. Freddie Mac's Green Advantage mortgage products allow borrowers to either raise the amount of their loan proceeds by half the projected owner-paid cost savings, or underwrite up to 75 percent of the savings.
State and Local Activities
VHFA Revising Housing Tax Credits, Seeks Input
Vermont Business Magazine (10/19/2016)
The Vermont Housing Finance Agency (VHFA) has invited interested parties to submit comments on how housing tax credits are allocated. The comments will be considered during this year's upcoming revisions to Vermont's Qualified Allocation Plan (QAP). As administrator of the housing tax credit program, Vermont Housing Finance Agency (VHFA) allocates credits to specific projects in accordance with identified state needs and federal requirements outlined in the Vermont QAP. Vermont's interagency Joint Committee on Tax Credits reviews allocation policies and process and makes recommendations on the QAP to VHFA's Board of Commissioners. Using the QAP as a guide for prioritizing applications, the VHFA Board of Commissioners awards tax credits each year for specific rental housing development projects. Studies have long shown that the need for affordable rental housing across Vermont far outweighs the availability of funds to meet this need, underscoring the importance of the prioritization assigned to various types of projects as stipulated by the QAP. Comments are to be submitted by November 1.
Association News
Take SHCM Blended Learning Course Online
The SHCM Blended Learning course will be held four consecutive Tuesdays beginning Nov. 1. The course is broken up into four webinar sessions with each presentation lasting approximately two hours with breaks, followed by a question-and-answer period for attendees.
- Tuesday, Nov. 1, 12-3 p.m. EST, Chapter 1: Program Regulations presented by Anita Moseman.
- Tuesday, Nov. 8, 12-3 p.m. EST, Chapter 2: Unit Eligibility presented by Gwen Volk.
- Tuesday, Nov. 15, 12-3 p.m. EST, Chapter 3: Applicant Eligibility & Certification presented by Dodi Gershen.
- Tuesday, Nov. 22, 12-3 p.m. EST, Chapter 4: Monitoring & Compliance presented by Heather Staggs.
The cost for the course, including the SHCM exam and SHCM application fee, is $599; NAAEI designates will receive a $50 discount for the entire course.
Individual webinars can be purchased at $99 each. To register, click the Web Link provided below.
Material for the webinars is based on NAHMA's Practical Guide to Housing Credit Management workbook. Participants will receive course materials in a PDF format prior to the first webinar session. Participants will have 14 business days to sit for the exam upon the conclusion of the series. All students will need to sit for the SHCM exam by Friday, Dec. 16, 2016. For more information, click the Web Link.
Save the Date: The SHCM CEU webinar is Wednesday, Dec. 7, from 2-4 p.m.
Deadline for COQ Awards Approaches
The submission deadline for entries to the National Affordable Housing Management Association (NAHMA)’s 2015 Communities of Quality Awards program is Nov. 4. The Communities of Quality (COQ) Awards recognize outstanding property management companies providing the highest quality of safe, affordable multifamily rental housing in communities across the country.
Help NAHMA honor the multifamily developments that prove affordable housing can be an asset to any community through the Communities of Quality (COQ) National Recognition Program and COQ Awards.
To be eligible for the COQ Awards, a community must be a COQ Nationally Recognized property. For more information on the Communities of Quality National Recognition program, visit https://www.nahma.org/awards-contests/communities-of-quality/.
The COQ Awards honor the achievements of affordable housing providers who have made an unprecedented contribution to the affordable housing industry by developing and maintaining outstanding properties that are safe and vibrant places to live.
If you are already a Nationally Recognized property, you have done the hard part. Now is the time to work on your application for the 2016 COQ Awards competition, which is due Nov. 4. The application brochure can be downloaded by clicking the Web Link below.
Purchase a One-Of-A-Kind Gift
Order the 2017 National Affordable Housing Management Association (NAHMA) Drug-Free Kids Calendar now by clicking on the Web Link below. Do not wait—the 2015 and 2016 editions sold out.
The calendars feature outstanding original artwork by children, seniors and adults with special needs living in affordable multifamily housing. This year’s contest celebrated community spirit with its theme, Words That Heal: Stop Bullying, Spread Kindness.
The cost is $5.50 per calendar, which is a Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture allowable project expense.
HUD Releases Utility Allowance Factors for FY 2017
HUD has issued the Utility Allowance Factors (UAFs) for fiscal year 2017. Owners and management agents may use UAFs for projects subject to the requirements found in the Office of Housing’s Utility Analysis Notice. The notice describes when owners and agents of multifamily properties that receive a utility allowance may use the published UAFs to adjust these allowances. The dataset is updated once per year and is published with an effective date. The UAFs for FY 2017 are effective Feb. 11, 2017. To read the notice, click on the Web Link provided. The FY 2017 UAFS can be found on the NAHMA website here.
Assistance for Those Affected by Flooding and Hurricane Matthew
On Oct. 13, HUD announced that a total of $500 million will be allotted to Louisiana, Texas and West Virginia through HUD's Community Development Block Grant-Disaster Recovery (CDBG-DR) Program to assist recovery efforts after severe flooding that occurred earlier this year.
These funds were provided through the Continuing Resolution passed Sept. 29. HUD allocates CDBG-Disaster Recovery funds based on the best available data from the Federal Emergency Management Agency to identify the areas of greatest level of “unmet housing need.” In the hardest-hit counties of Louisiana, Texas and West Virginia, more than 102,000 households experienced some level of damage to their homes including more than 41,000 families who saw the most serious level of damage or destruction and unmet needs. Areas affected by Hurricane Matthew are not eligible for these funds as disaster declarations for Matthew occurred after the Continuing Resolution became law.
However, HUD is committed to assisting those affected by Hurricane Matthew. HUD will speed federal disaster assistance to the states of North Carolina, Florida and Georgia, and provide support to homeowners and low-income renters forced from their homes. State and local officials have been directed to explore streamlining the department's CDBG and HOME Investment Partnerships programs in order to expedite the repair and replacement of damaged housing.
To read more about HUD’s flood assistance for Louisiana, Texas and West Virginia, click on the Web Link. To read more about the assistance to be provided to people affected by Hurricane Matthew, click here.
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.
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
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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NAA Student Housing Conference & Exposition
February 14-15, 2017
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Abstract News © Copyright 2016 INFORMATION, INC.
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