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Bill Introduced to Require Carbon Monoxide Detectors


Sens. Tim Scott (R-SC) and Bob Menendez (D-NJ) introduced the Carbon Monoxide Alarms Leading Every Resident to Safety Act. While carbon monoxide detectors are not currently required in Department of Housing and Urban Development (HUD)-assisted housing, the agency recently issued a notice to urge the installation of carbon monoxide (CO) detection systems. Additionally, HUD announced it would provide $5 million in grants to install CO alarms in assisted units. A similar bill requiring CO detectors in assisted housing and authorizing funding for installation and maintenance costs was unanimously approved by the House Financial Services Committee. To read more about the bill, click on the Web Link provided.
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Industry Trends


"Navigating Low Income Housing Tax Credits for Successful CRE Investments"
"How QAPs Would be Affected by the Affordable Housing Tax Credit Improvement Act of 2019"

Congress


"Congress Considering Retroactive Changes Affecting Low-Income Housing Tax Credit Property Owners"

HUD-Related Activity


"Consumer Advocates Join Banks to Press for Looser Housing Rule"

State and Local Activities


"Aldermen Seek to Address Affordable Housing"
"Throughout Colorado, Housing is a Health Issue"

Management and Compliance


"End-of-Year Tax Planning for LIHTC Properties"

Association News


NAA Participates on HUD Panel on Nation’s Housing Needs
NAA Offers Financial Boot Camp Online Course
REWIND 2019 Now Available
NAAEI Offers Online Learning Discount
2019 Q2 Apartment Jobs Snapshot
NAHMA Releases 2019 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Industry Trends


Navigating Low Income Housing Tax Credits for Successful CRE Investments
GlobeSt.com (07/31/19) Lephew, JR

Low-Income Housing Tax Credits (LIHTC) are hot right now as we approach the last stages of the post-recession real estate cycle, when there are fewer development deals and investment opportunities than in previous years, writes JR Lephew, a principal and technical director for HUD services at Partner Engineering and Science. Many of the 15-year tax credit deals from the past recession have come through, so investors may be looking for opportunities to find new projects and investments. Some stakeholders attracted to LIHTCs are new to the programs and may not understand all the intricacies related to applying and adhering to strict guidelines. The various capital stack stakeholders are seeking more due diligence and risk management oversight to ensure that federal and state regulations are met, and proper use of funds is planned. Services may include environmental compliance, review of structural or building code standards and conformance, as well as accessibility standards, and energy efficiency compliance for multifamily housing. Moreover, there are numerous state by state differences with regard to due diligence requirements, qualifications for accessing projects and reporting. The single biggest factor for executing a successful LIHTC deal is choosing an experienced consultant who can help navigate reporting standards, state requirements, hard deadlines, underwriting and the due diligence assessment process, according to Lephew.
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How QAPs Would be Affected by the Affordable Housing Tax Credit Improvement Act of 2019
Notes from Novogradac (07/22/2019) Shelburne, Mark

The proposed Affordable Housing Credit Improvement Act of 2019 (AHCIA) calls for a 50 percent increase in the allocation authority of population-based, competitive LIHTCs (9 percent LIHTCs), to be phased in over five years. Novogradac estimates the increase would create 384,000 additional apartments over 10 years. Many of the bill’s provisions would result in LIHTC allocating agencies implementing new or different policies within qualified allocation plans (QAPs) or equivalent documents. At minimum, QAPs would impact specific dollar amounts of the LIHTCs available, and an increase in LIHTCs allocated could lead to new priorities or practices. These could include a set-aside for a particular type of development, additional geographic splits, or an "innovation round" for applications with unique circumstances. The AHCIA also calls for aligning the LIHTC with the Violence Against Women Act (VAWA) by requiring all recorded extended use agreements and lease agreements to include VAWA protections and specifying that victims qualify under the general public use requirement. Section 301 of the AHCIA would permanently establish a minimum 4 percent rate for LIHTCs used to finance acquisitions and tax-exempt financed developments. Novogradac estimates the change would create 66,000 additional apartments over 10 years. The legislation would also allow agencies to designate tax-exempt bond-financed properties as eligible for the difficult development area (DDA) basis boost.
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Congress


Congress Considering Retroactive Changes Affecting Low-Income Housing Tax Credit Property Owners
Notes from Novogradac (07/24/2019) Wallace, Dirk

The rights of existing owners of Low-Income Housing Tax Credit (LIHTC) properties could potentially be affected by legislation introduced in Congress that calls for changing the terms of right of first refusal (ROFR) under U.S. Code Section 42(i)(7). The proposed Affordable Housing Credit Improvement Act of 2019 (AHCIA) would change the requirements of nonprofit general partners' ROFR, such that a nonprofit general partner has a below-market option to purchase property rather than merely a ROFR. The legislation would expand this option to both the property and partnership interests relating to the property, and would apply to agreements entered into after the enactment of the legislation. Under the AHCIA, a nonprofit general partner’s option or right of first refusal may be exercised without the consent of any other partners; and a nonprofit general partner’s option or ROFR may be exercised in response to a purchase offer by a related party. Also, "property" may include any assets “held for the development, operation, or maintenance of a building.” This language may not be clear enough to support the existence of a LIHTC partnership through which LIHTCs, or other tax benefits, can pass to investors. There is further concern about the ability of Congress to make retroactive tax law changes. Based on U.S. Supreme Court precedent, the legislation has the potential to infringe the due process clause and the takings clause of the U.S. Constitution because it directly affects contractual and property rights.
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HUD-Related Activity


Consumer Advocates Join Banks to Press for Looser Housing Rule
Politico Pro (08/07/19) O'Donnell, Katy

Banks, consumer advocates, and civil rights groups have joined forces to lobby the Trump administration to do more to encourage banks to participate in a Federal Housing Administration lending program that serves first-time, low-income, and minority homebuyers. After the housing market meltdown, the government prosecuted so many banks for their actions during the crisis that many lenders had to end such efforts. The most recent attempt by the FHA to fix the problem has failed, according to the groups. "FHA received helpful feedback from stakeholders on our draft annual and loan-level certifications," a HUD spokesperson said. "We’re currently in the process of reviewing that feedback before we finalize both certifications. Throughout this effort, our goal is to ensure that lenders have a clear understanding of our regulatory expectations." The final guidance is expected shortly, according to a HUD official.
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State and Local Activities


Aldermen Seek to Address Affordable Housing
Crain's Chicago Business (07/24/19) Quig, A.D.

Aldermen in Chicago have reintroduced legislation intended to increase affordable housing and require additional public reporting from the Chicago Housing Authority to the City Council. The legislation would drastically change the city's Affordable Requirements Ordinance, which dictates how developers receiving city help must contribute to the affordable housing supply. The Affordable Requirements Ordinance, approaching its fifth year of existence, requires that developers provide 10 percent of units for affordable prices at developments with at least 10 units. But it also provides developers with an easy way out—paying a fine in lieu of providing on-site units. Proponents of the legislation believe that Chicago Mayor Lori Lightfoot's administration will be generally supportive of the efforts to increase affordable housing in the city. Lightfoot's transition report highlighted the lack of affordable housing and pledged to provide more options for lower-income Chicagoans, including those displaced from their homes by gentrification. The aldermen's proposed legislation would increase the amount of affordable housing demanded of developers to 30 percent in high-rent zones and 20 percent in moderate-income neighborhoods. It would also remove the option to pay a fee in lieu of providing affordable housing. And the legislation would mandate increased communication between the Chicago Housing Authority and the City Council on the amount of available affordable housing.
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Throughout Colorado, Housing is a Health Issue
Aspen Daily News (Colo.) (07/27/19) Bektesh, Alycin

A symposium hosted by the Colorado Health Foundation focused on the state's housing crisis and its impact on public health. The recently completed Greater Roaring Fork Housing Study found that local households earning between $42,000 and $58,800 annually are spending the highest percent of their income on housing. Census data also reveals that within Pitkin County, 34.65 percent of residents live in what is deemed suboptimal housing, putting them more at risk of having chronic illness or communicable diseases. During the 2018-19 session of the Colorado General Assembly, lawmakers passed several new bills to help local governments allocate more funds for affordable housing. One bill calls for adding $5 million to the Colorado Housing and Finance Authority's affordable housing tax credit program. Aspen Housing Partners, the developer behind three new local affordable rental projects set to open next year, is using the affordable housing tax credits to fund the projects. The recently completed Roaring Fork Apartments affordable housing complex in Basalt also participated in the credit program. A bill sponsored by state representatives Perry Will and Dylan Roberts transfers nearly $1 billion into an affordable housing grant fund over the next four years. Officials hope this fund will help rural communities and smaller housing projects because the affordable housing tax credit program has a minimum unit requirement.
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Management and Compliance


End-of-Year Tax Planning for LIHTC Properties
Novogradac Journal of Tax Credits (08/19) Keller, Scot

With five months remaining in the year, owners of Low-Income Housing Tax Credit (LIHTC) properties should start thinking about tax-planning strategies. Site improvements and personal property are the most common examples of bonus depreciation for qualified property. Under the Tax Cuts and Jobs Act, 100 percent of the depreciable basis of qualifying property placed in service after Sept. 27, 2017, and before Jan. 1, 2023, can now be expensed. Doing a cost-segregation study will enable LIHTC property owners to identify assets with shorter depreciable lives and thus benefit from accelerated depreciation. To maximize the first-year tax credits, LIHTC property owners should consider meeting the minimum set-aside, otherwise no credits can be claimed; and meeting the target applicable fraction to ensure that the credits promised are delivered. The owner of a LIHTC property damaged by a casualty loss must repair any damaged units and place them back in service before the end of the year to avoid a loss of credits for the year. By electing to be treated as a real property trade or business, a LIHTC partnership can avoid the business interest expense limitation in exchange for depreciating its buildings using the alternative depreciation system.
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Association News


NAA Participates on HUD Panel on Nation’s Housing Needs

Over 100 stakeholders from across the spectrum of housing providers and groups in both the public and private sections met in Washington, D.C., to discuss the needs and conditions that affect the U.S. housing market. The National Apartment Association (NAA) presented its newly-expanded Barriers to Apartment Construction Index, containing research findings from 29 U.S. cities about factors that stand between demand and the housing supply necessary to satisfy it. To learn more, click on the Web Link below.
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NAA Offers Financial Boot Camp Online Course

The NAA Education Institute announces the availability of a financial boot camp online course. This course is designed to refresh and sharpen the math skills used by industry professionals, including fundamental math functions, understanding averages, calculating area and working with common property management calculations that are used by apartment managers. To purchase the course, visit the Web Link below.
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REWIND 2019 Now Available

REWIND 2019, featuring can’t miss education sessions from Apartmentalize, the rental housing industry’s premier event, is now available for purchase. REWIND 2019 consists of over 80 sessions recorded at the June 2019 Apartmentalize conference, including topics such as changing the perception of affordable housing, emergency preparedness, cybersecurity and employee retention. To purchase REWIND 2019, visit the web link below and use NAAEI’s online learning discount, VISTO19.
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NAAEI Offers Online Learning Discount

The NAA Education Institute is offering a discount code worth 10% off your entire purchase to SHCM credential holders for online courses on Visto, its learning management system. To get 10% off all training courses, use promo code VISTO19 at checkout. The code is valid through Dec. 31, 2019. Click the Web Link below to review the course offerings.
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2019 Q2 Apartment Jobs Snapshot

NAAEI brings you its workforce update: The Apartment Jobs Snapshot, which highlights labor force trends in the rental housing industry. The profile examines total job posting trends by position and geography as well as average salaries, time required to fill a position and the top skills found in job postings.
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NAHMA Releases 2019 Affordable 100 List

The National Affordable Housing Management Association (NAHMA) announces its 2019 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.
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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.
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Upcoming Events

NAAEI Affiliate Education Conference
August 19-21, 2019
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NAA Maximize
September 23-25, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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LeadingAge Annual Meeting + Expo
October 27-30, 2019
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News summaries © copyright 2019 SmithBucklin


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August 2019