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HUD Publishes FY 2019 Fair Market Rents
The Department of Housing and Urban Development (HUD) published the fiscal year (FY) 2019 Fair Market Rents (FMRs) effective Oct. 1, unless HUD received a request for re-evaluation of specific area FMRs. HUD’s notice also addressed a previous Federal Register notice regarding the use of FMR surveys in the calculation of Renewal Funding Inflation Factors. HUD made no changes to the estimation methodology for FMRs as used by HUD for the FY 2018 FMRs; the only difference is the use of more recent data. To view the FY 2019 Fair Market Rents, click on the Web Link below.
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Industry Trends
"Older U.S. Apartments Are Losing Their Affordability Advantage"
Tax Issues and Tax Reform
"What a Series of New LIHTC Reports Get Right…and Wrong About Housing Tax Credits"
"GAO Releases Report on LIHTC Development Costs"
Congress
"Wyden Introduces Middle-Income Housing Tax Credit Bill"
State and Local Activities
"Missouri's Affordable Housing Projects Caught In Middle of Tax-Credit Debate"
"Charlotte's Plan to Deal With Its Affordable Housing Shortage"
Green Building
"5 Smart Lighting Benefits You Never Thought About"
Association News
Save the Date for the LeadingAge Annual Meeting and Expo in Philadelphia, Oct. 28-31
September Is Disaster Preparedness Month: Are You Ready?
Housing Plus Services Research: A Decade of Lessons in How to Influence Policy and Practice
NAHMA Releases New 2018 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
Older U.S. Apartments Are Losing Their Affordability Advantage
National Real Estate Investor (09/07/18) Carmiel, Oshrat
For U.S. apartment properties, older appears to be better with regards to rent growth. Rental units in buildings constructed in 1959 or earlier had steeper median rent increases from 2000 to 2016 than those half their age, a new study by Apartment List shows. The older buildings are still cheaper, though, with a median rent that is 23 percent lower than the median for multifamily housing communities developed in the 1990s. Older buildings have traditionally been a dependable source of affordable housing. But that need is no longer being met in certain markets, with many such properties being taken offline for extensive renovations that result in higher rents when returned to the market. Apartments from the 1970s and 1980s -- the time of the largest surge in multifamily construction -- are now prime targets for redevelopment. This means that costs for older apartments that aren't updated are likely to rise as renters seek them out for their affordability. "If this happens to the largest cohort of apartments," observes Igor Popov, Apartment List's chief economist, "then the affordability problem is going to get worse."
Tax Issues and Tax Reform
What a Series of New LIHTC Reports Get Right…and Wrong About Housing Tax Credits
Novogradac (09/29/2018) Lawrence, Peter
A trio of reports issued by the Urban Institute on the Low-Income Housing Tax Credit (LIHTC) asserts that the LIHTC is essential to the nation’s safety net, and helps expand and preserve the supply of affordable rental housing. However, the reports also claimed that the location of LIHTC is linked to increased poverty concentration and racial segregation. The Urban Institute mentioned separate, conflicting sources, some of which use flawed methodologies. Some analyses fail to take into account the differences between allocations for new construction versus those for acquisition and rehabilitation. The reports also said those most in need do not benefit from the LIHTC. However, an analysis of 2015 LIHTC tenant data released by the U.S. Department of Housing and Urban Development in March 2018 revealed that extremely low-income tenants—those making 30 percent or less of the area median income (AMI)—accounted for the largest share of the LIHTC tenants served, at 44.5 percent. The percentage of LIHTC tenants earning between 30 percent and 40 percent of AMI in 2015 was 18.2 percent. The Urban Institute reports also pointed to LIHTC program requirements as causing such issues as extended timelines, higher legal fees and transaction costs, and potential inefficiency where development costs are concerned. It is important to note that unlike grant programs, such as Housing Choice Vouchers and the Community Development Block Grant, the LIHTC does not have separate administrative funding, making it inappropriate to compare LIHTC's soft and transactional costs without taking that difference into account.
GAO Releases Report on LIHTC Development Costs
Novogradac (09/18/2018)
The Government Accountability Office (GAO) on September 18 released its study on development costs for Low-Income Housing Tax Credit (LIHTC) properties. "Low-Income Housing Tax Credit: Improved Data and Oversight Would Strengthen Cost Assessment and Fraud Risk Management" measured development costs of LIHTC properties in 10 states between 2011 and 2015. The GAO report found that the median total development cost per unit in its survey was $204,000 higher than the number in a recent report by Abt Associates, attributing that mainly to the fact that the Abt Associates report is national and includes 4 percent developments while the GAO report is focused on 10 states including some of the highest-cost cities in the nation. The report calls for the IRS to require general contractor cost certifications for LIHTC projects, encourage allocating agencies and other stakeholders to collaborate on more standardized cost data and communicate to allocating agencies on how to collect information and review information on LIHTC syndication expenses. The GAO report recommended that Congress designate an agency to collect and maintain cost-related data from allocating agencies and periodically report on LIHTC development costs.
Congress
Wyden Introduces Middle-Income Housing Tax Credit Bill
Affordable Housing Finance (08/27/18)
U.S. Sen. Ron Wyden (D-Ore.) has proposed legislation to form a middle-income housing tax credit (MIHTC) intended to spur the development of rental homes affordable to Americans with moderate incomes. The bill (S. 3365), which builds upon the successful Low-Income Housing Tax Credit (LIHTC) model, would allocate funds to states based on population with state housing authorities and follow a competitive process to allocate the tax credits to developers for individual new construction projects or rehabilitations. To qualify, at least 60 percent of the property’s units must be occupied by individuals with incomes of 100 percent or less of area median gross income (AMGI). Tenants’ rents must not exceed 30 percent of the 100 percent of AMGI, and the affordability restrictions would remain in place for up to 15 years after an initial 15-year compliance period. A state's unused MIHTC allocation would get added to the state's existing LIHTC allocation after one year. Diane Yentel, president and CEO of the National Low Income Housing Coalition, asserts, "There is no sound rationale for investing billions of dollars of scarce federal resources targeted toward the development of market-rate housing, when changes to local zoning laws would have largely the same impact." Meanwhile, Wyden's proposed S. 3364 bill would provide first-time homebuyers up to a $10,000 refundable tax credit that would equal 2.5 percent of the home purchase, with the maximum credit reached at homes selling for $400,000.
State and Local Activities
Missouri's Affordable Housing Projects Caught In Middle of Tax-Credit Debate
KCUR (09/13/18) King, Samuel
Certain affordable housing projects in Missouri have until Oct. 31 to take advantage in $140 million in tax credits, but developers are concerned the Kansas City-based Missouri Housing Development Commission (MHDC) won't act in time. The MHDC has not had a full board meeting in months because it does not have enough members. Missouri Gov. Mike Parson has said he intends to make appointments in September, but the future of the program at the state level is uncertain. The tax credits help developers offset the cost of building housing for the working poor and older residents, but debate over their value has left some housing projects in limbo, delaying plans that could help address gaps in affordable housing in Missouri. Parson said he supports a statewide moratorium on the state's Low-Income Housing Tax Credit program until reforms can be made. The Missouri Housing Development Commission said there are no scheduled meetings this year, though that could change once Parson makes appointments. House Budget Committee Chairman Scott Fitzpatrick (R-Shell Knob) said the credits could be restored sooner than June if lawmakers get to work early in the 2019 regular session. "I think if you surveyed the legislature, more members would prefer to see the program functioning in some capacity then would prefer to see it eliminated entirely," Fitzpatrick said. "I'll be open-minded and work with the numbers to try to come up with a solution that'll allow the credits to be restarted."
Charlotte's Plan to Deal With Its Affordable Housing Shortage
Next City (09/04/18) Brey, Jared
Voters in Charlotte, N.C., will be asked to approve a ballot measure this fall that calls for directing $50 million in municipal bond proceeds to the city's housing trust fund to address a shortage of affordable housing. On Aug. 27, the Charlotte City Council voted to approve a new "Framework for Building and Expanding Access to Opportunity through Housing Investments," prepared by the city in partnership with the nonprofit Enterprise Community Partners. The housing framework found that Charlotte needs 24,000 more housing units for residents earning 50 percent of area median income (AMI) or less, and that the city should prioritize its investments in housing for families earning up to 60 percent of AMI. To achieve this, the framework calls for expanding the development of rental housing with programs that support Low-Income Housing Tax Credit (LIHTC) deals, using federal community development block grant funds to help create mixed-income housing, and forming an acquisition fund to make strategic land purchases. Other strategies include launching a fund and tax relief program to preserve naturally occurring affordable housing and ensuring that publicly funded developments set aside 20 percent of units for families earning 30 percent of AMI or less. In addition to the roughly 1,100 annual LIHTC units produced with support from the city's current Housing Trust Fund, an additional $50 million could support 4,400 more units built and preserved, the framework estimates. It also expects to create an "equity fund" with support from philanthropic foundations and other investors to support LIHTC deals.
Green Building
5 Smart Lighting Benefits You Never Thought About
Buildings (09/07/18) Parrett, David
Automated lighting features are becoming more prevalent in buildings of all types, especially green structures striving to reduce environmental impact. Reduced energy use is not the only value factor to consider when upgrading to smart lighting. Smart lighting installations often feature sensors that monitor how much daylight is filtering into a building. On the brighter days, lights can automatically turn to a lower tone that is both cooling and relaxing for occupants. The opposite can be true on darker days. In addition, lighting levels can be put on a time-of-day schedule. Another benefit is improved safety with occupancy sensors. Occupancy sensors in offices and rooms can ensure that employees and residents always enter a well-lit space, providing further protection from slips and falls. Meanwhile, bathrooms equipped with occupancy sensors make the space feel safer for employees or residents who don't have to fumble blindly for a light switch. Having no on-off switches also reduces the potential for germ transfer. A fourth benefit of connected lighting systems is the ability to monitor where people are in a building at any given time. Finally, there is ease of installation. Upgrading lighting systems to connected lighting controls is relatively easy, with many installations not requiring any rewiring at all.
Association News
Save the Date for the LeadingAge Annual Meeting and Expo in Philadelphia, Oct. 28-31
Be part of the nation’s largest annual event for the not-for-profit aging services field. You are sure to find innovative solutions to your challenges, discover new ways to improve operations and quality, and go home better equipped to serve your residents and clients. We hope you will join us in Philly! To register, click the Web Link below.
September Is Disaster Preparedness Month: Are You Ready?
Disasters do not plan ahead. You can. LeadingAge’s Disaster Resources: Preparedness, Response and Recovery webpage includes links to help aging services providers find the most appropriate resource for them in any phase of disaster planning, response or recovery, and includes information on active hurricane monitoring, identification of local emergency response agencies, templates for disaster planning, facility and individual preparedness training videos, guides, worksheets and checklists. For more information, click on the Web Link.
Housing Plus Services Research: A Decade of Lessons in How to Influence Policy and Practice
Research has helped promote housing plus services models and has demonstrated their value. Turning promise into policy is the greatest challenge. LeadingAge’s early work served as an important foundation for a decade of research that has influenced policy and practice at the federal and state levels. To learn more, click on the Web Link provided below.
NAHMA Releases New 2018 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its new 2018 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
October 1-3, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 21-23, 2018
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LeadingAge Annual Meeting and Expo
October 28-31, 2018
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NAA Assembly of Delegates
November 14-17, 2018
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NAHMA Biannual Top Issues in Affordable Housing Spring Conference
March 3-5, 2019
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LeadingAge PEAK Leadership Summit
March 17-20, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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