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Brian Montgomery Nominated as HUD Deputy Secretary
President Donald Trump nominated Brian Montgomery to serve as deputy secretary of the Department of Housing and Urban Development (HUD). If confirmed by the Senate, Montgomery will serve as the second most senior official at the agency, managing day-to-day operations and overseeing the department’s nearly 8,000 employees. He is currently serving as HUD’s assistant secretary for Housing and Federal Housing Commissioner. To read the press release about Montgomery’s nomination, click on the Web Link provided.
Tax Issues and Tax Reform
"State LIHTCs and the Federal 4 Percent LIHTC"
"Historic Tax Credit Fuels Housing Development"
Industry Trends
"New Research Analyzes Affordable Rental Housing in High Opportunity Areas"
"Has Modular Construction Reached a Turning Point in the Multifamily Sector?"
"National Apartment Association Survey Shines Light on Affordable Rental Housing Barriers at HUD Stakeholder Meeting"
State and Local Activities
"More Tampa Bay Renters, Fewer Places They Can Afford"
"In Kansas City, Advocates Want to Boost Renters' Access to Energy Efficiency"
Management and Compliance
"NCSHA Updates Model LIHTC Compliance Forms"
Association News
Register for the Blended Learning SHCM Online Course
Online Registration for NAHMA’s October Meeting Closes Friday
Don’t Forget to Work on Your COQ Award Application
NAHMA Drug-Free Kids Calendar on Sale
NAHMA Releases 2019 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Tax Issues and Tax Reform
State LIHTCs and the Federal 4 Percent LIHTC
Novogradac (10/03/2019) Vol. 10, No. 10 O'Meara, Mark
When combined with the 4 percent federal credit, states' Low-Income Housing Tax Credit (LIHTC) programs can be more effective for financing affordable housing. Colorado’s state LIHTC program, called the affordable housing tax credit (AHTC), in May doubled its annual allocation from $5 million to $10 million, and in 2018 the program was extended through 2024. The Colorado state AHTC pairs well with HOME funds and the Capital Magnet Fund. California’s 2019-2020 approved budget increased the annual state LIHTC allocation by $500 million, a five-fold increase on the 2019 level. The legislation allows the $500 million LIHTC allocation in future years if the Legislature approves it. Georgia’s state LIHTC program, the Georgia housing tax credit, can be paired with both the federal 9 percent and 4 percent LIHTC programs. Ryan Fleming, director of the Office of Housing Finance at the Georgia Department of Community Affairs, notes, "If we didn’t have the state tax credit, we wouldn’t get 80 percent of our bond applications. Along with sources of soft funding, the state credit equity closes the financing gap in many bond deals that otherwise would never pencil out." The Connecticut housing tax credit contribution (HTCC) program can similarly be paired with the federal 9 percent and 4 percent LIHTCs. However, as in Georgia, the state's QAP does not incentivize stacking the state and federal LIHTCs. Joe Voccio, director of multifamily at the Connecticut Housing Finance Authority, notes that state law requires annual set-asides of $1 million for workforce housing and $2 million for permanent supportive housing.
Historic Tax Credit Fuels Housing Development
Apartment Finance Today (10/11/19)
In fiscal 2018, the federal historic tax credit program rehabilitated 6,994 housing units and created 12,527 units, including 6,152 low- and moderate-income units, according to a report funded by the National Park Service, which oversees the program with the Internal Revenue Service and state historic preservation offices. The program provides a 20 percent federal tax credit to property owners that substantially rehabilitate a historic building in a commercial or other income-producing use while maintaining its historic character. The report, conducted by Rutgers University’s Center for Urban Policy Research, reveals that the historic tax credit program provided more than $7.7 billion in total rehabilitation investment and contributed more than $14.4 billion in output in goods and services to the U.S. economy in fiscal 2018. In addition, 51 percent of certified rehabilitation projects were located in low- and moderate-income areas, and more than 75 percent were located in economically distressed areas. Almost half of all projects were less than $1 million in rehabilitation costs, and 18 percent were less than $250,000. A quarter of all certified rehabilitation projects were located in communities with a population of less than 50,000 people. Thirty-five states have their own state historic tax credit programs that can be used alongside the federal program. Legislation to create a historic state credit was sent to California Gov. Gavin Newsom in September, and similar legislation was approved by Hawaii lawmakers earlier this year.
Industry Trends
New Research Analyzes Affordable Rental Housing in High Opportunity Areas
Notes from Novogradac (10/07/2019) Lawrence, Peter
A new report by Harvard University’s Opportunity Insights concluded that a key barrier facing lower-income families is lack of affordable housing. The report backs "increasing the availability of affordable housing in higher opportunity areas through policies such as the project based units, or changes in zoning regulations." States have begun to recognize the importance of placing Low-Income Housing Tax Credit (LIHTC) properties in high opportunity areas. For example, development in a high opportunity area is a scoring factor in Illinois' 2018-2019 qualified allocation plan (QAP). Alabama's QAP provides points for LIHTC development in close proximity to services such as banking and health care. Certain provisions of the proposed Affordable Housing Credit Improvement Act (AHCIA) would help foster affordable housing, such as expanding the 9 percent LIHTC by increasing allocation authority by 50 percent. More allocation authority could lead to placing more LIHTC housing in high opportunity areas, some of which may be considered difficult to develop due to their high land costs. The AHCIA would also increase the population cap for difficult to develop areas. Furthermore, the AHCIA seeks to modify the 10-year rule, incorporate relocation expenses in rehabilitation expenditures, enact a permanent minimum 4 percent LIHTC rate, and allow agencies to award a basis boost to housing bond-financed developments.
Has Modular Construction Reached a Turning Point in the Multifamily Sector?
National Real Estate Investor (10/01/19) Anderson, Bendix
Tom Hardiman, executive director of the Modular Building Institute (MBI), reports that modular production in the multifamily housing sector has doubled over the past year as developers, architects, and contractors have become more interested in the technique. Modular construction is a technique whereby large pieces of a building are created in a factory and transported to the development site. Hardiman and other advocates have long argued that modular construction can significantly reduce the amount of time needed to finish a project, thereby also reducing the overall cost of the project. Their argument appears to be gaining converts. While only a fraction of the overall construction projects nationwide are using modular production techniques, the number of buildings created annually from modules has increased. Hardiman says modular construction's ultimate success depends on "an understanding of the process by code officials; policy makers; and the traditional architecture, engineering, construction, and operation community." While less than 1 percent of new apartment communities opening in 2018 were constructed with modular techniques, factories created more than twice as many multifamily housing modules last year than in 2017. Seven states — California, Massachusetts, Florida, New York, Washington, New Jersey, and Colorado — accounted for 87 percent of the modules manufactured for apartment projects in 2018. So far, these projects have been able to reduce the time needed to complete a project. Traditional apartment developments can take up to 14 months from approval to occupancy. By contrast, modular apartment complexes have taken an average of eight months.
National Apartment Association Survey Shines Light on Affordable Rental Housing Barriers at HUD Stakeholder Meeting
Novogradac (09/09/2019) Lawrence, Peter
The National Apartment Association (NAA) recently conducted a survey of 883 respondents ranging from government entities to private developers to gain insight into the multifamily housing sector. Respondents felt that a key factor impacting multifamily housing construction is community involvement. For instance, NIMBYism often stops community growth and slows the rate of multifamily residential development across the majority of metropolitan areas. Nearly half of the survey’s respondents indicated that during the past five years, construction costs rose by 11 percent to 20 percent, on par with rising construction costs cited in the State of the Nation's Housing 2019 report. Forty percent of respondents reported it is "fairly to extremely difficult" to get approval for new multifamily residential developments. An accompanying report on the NAA survey voiced support for the Affordable Housing Credit Improvement Act of 2019 (AHCIA). The act would provide more resources for affordable rental housing development; increase the financial feasibility of developments; or otherwise streamline and simplify the Low-Income Housing Tax Credit (LIHTC) program. AHCIA also calls for removing the requirement that developers demonstrate local support for Housing Credit developments. Under AHCIA, states would also be able to develop a competitive scoring process that encourages developers to obtain additional funding sources for their developments, enabling more developments to receive LIHTC allocations.
State and Local Activities
More Tampa Bay Renters, Fewer Places They Can Afford
Tampa Bay Times (10/07/19) Martin, Susan Taylor
In Florida, soaring home prices have left a sizable chunk of the population with no choice but to rent at a time when the number of affordable rental units is on the decline. According to the 2019 Rental Market Study from the University of Florida's Shimberg Center for Housing Studies, Florida gained almost 800,000 renter households from 2000 to 2017. Over the same period, the state added close to 720,000 new rental units that lease for $1,000 or more, while the number of apartments renting for less than that amount dropped. Nearly 800,000 Florida renters are "cost-burdened," meaning they pay more than 40 percent of their income for rent. In the Tampa Bay area, cost-burdened renters account for close to one-third of all renters. The median household income in the Tampa Bay region was almost $55,000 last year, and renters would need to pay no more than $1,750 a month to avoid being cost-burdened. The high prices of new apartments in downtown St. Petersburg and Tampa have forced thousands of renters into older apartment complexes on the fringes of those areas. The study found that, two years ago, someone making $62,400 or more had a choice of 15,000 rental units in the Tampa Bay area that were vacant and affordable (costing no more than 30 percent of annual income), but someone earning $31,200 or less couldn't find any rental units that were available and affordable.
In Kansas City, Advocates Want to Boost Renters' Access to Energy Efficiency
Energy News Network (09/27/19) Uhlenhuth, Karen
Advocates in Kansas City are pushing to improve energy efficiency in local apartment buildings. An April report from the American Council for an Energy Efficiency Economy found that multifamily housing has traditionally been underserved by utilities and other efficiency programs. There are reasons for this. First, there is little incentive to push energy efficiency when the owner of a building is not the one paying utility bills for each rental unit. Second, there is often a lack of adequate staff and resources to ensure that energy efficiency is being prioritized across an apartment property. Now, there are efforts to change that. Missouri’s Office of Public Counsel has teamed up with clean energy advocate Renew Missouri to lobby Kansas City Power & Light to adopt an on-bill repayment system that would overcome the initial financial hurdles in efficiency upgrades. Meanwhile, the Missouri Public Service Commission is considering providing funding mechanisms so that energy-efficient improvements are not so immediately costly for utilities and apartment residents. A recent summit held by the Metropolitan Energy Center sought to help apartment owners and residents become more energy efficient. Sara Lamprise, buildings and transportation program manager for the Metropolitan Energy Center, noted that tenants who do not know much about energy efficiency tend to stay quiet about it.
Management and Compliance
NCSHA Updates Model LIHTC Compliance Forms
Affordable Housing Finance (10/04/19)
The National Council of State Housing Agencies (NCSHA) has unveiled a set of revamped model forms for Low-Income Housing Tax Credit (LIHTC) compliance monitoring. The forms include owner’s certification of continuing program compliance, tenant income certification, employment verification, and others. All state housing credit agencies require LIHTC property owners to use specific forms in their compliance reporting. The revisions address legislative and regulatory changes in the program since the forms were first developed, including the average income test minimum set-aside, student rule exemptions, and application of the Violence Against Women Act. They also provide greater clarity for properties undergoing a resyndication of credits, says NCSHA. The organization advises housing credit agencies to adopt model forms to help standardize compliance monitoring practices and create efficiencies for owners and other LIHTC participants.
Association News
Register for the Blended Learning SHCM Online Course
Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification in four online sessions, or brush up on your housing credit compliance knowledge. Each webinar will last for approximately three hours, including instruction and a question-and-answer period for attendees. The webinars take place Oct. 17-Nov. 7, from noon-3 p.m. Eastern time. Please note: the date of the Chapter 2 webinar has changed.
The course schedule is as follows:
- Thursday, Oct. 17: Chapter 1, Program Regulations presented by Gwen Volk
- Tuesday, Oct. 22, Chapter 2, Unit Eligibility presented by Dodi Gershen
- Thursday, Oct. 31, Chapter 3, Applicant Eligibility & Certification presented by Heather Staggs
- Thursday, Nov. 7, Chapter 4, Monitoring & Compliance presented by Gwen Volk
The cost for the course, including the SHCM exam and SHCM application fee, is $549 for National Apartment Association Education Institute (NAAEI) and National Affordable Housing Management Association (NAHMA) members and $599 for nonmembers. Individual webinars can be purchased for $139 each for members or $149 each for nonmembers.
To register, click the Web Link provided below. If you have already created an NAA account, sign in by using your ID and password. If this is your first time registering for a course you will need to create an account directly from the NAA website. If you need assistance with the registration process, contact Amy Allen, at AAllen@naahq.org.
Material for the webinars is based on NAHMA’s newly revised Practical Guide to Housing Credit Management workbook. Participants will receive course materials in a PDF format prior to the first webinar sessions. Participants will have 14 business days—until Dec. 3—to sit for the exam upon the conclusion of the webinar series.
Online Registration for NAHMA’s October Meeting Closes Friday
Online registration for the NAHMA Biannual Top Issues in Affordable Housing fall conference closes this Friday, Oct. 18. Register for the meeting online today and hit the snooze button one more time on the opening morning. On-site registration will be available, but will cost more. The three-day meeting includes educational panels, committee meetings, the Vanguard Awards ceremony, the Educational Foundation gala and prearranged Capitol Hill visits. The meeting, Oct. 27-29, takes place at the Fairmont Washington, 2401 M St. NW, Washington, DC.
The annual meeting features a number of educational panels specifically geared toward the affordable housing industry that are led by people who are experts in their fields. Invited guests include representatives from the Departments of Housing and Urban Development and Agriculture, and more.
To register, click on the Web Link provided below.
Don’t Forget to Work on Your COQ Award Application
Plan to enter the NAHMA 2019 Communities of Quality (COQ) Awards competition. The submission deadline to NAHMA is Nov. 7. To enter the awards competition, a property must first apply for and achieve national recognition as a NAHMA Community of Quality with a minimum score of 325 points on its National Recognition application.
The COQ Awards recognize outstanding property management companies providing the highest quality of safe, affordable multifamily rental housing in communities across the country.
Judging is based on a point system that takes into account your National COQ Recognition Program application and the required COQ Awards application essay. All affordable multifamily properties may compete—it doesn’t matter how big or small your community may be, where it is located, or which affordable rental program (HUD, RD or LIHTC) it participates in. To download a copy of the COQ Awards brochure, click on the Web Link below.
NAHMA Drug-Free Kids Calendar on Sale
It may not be pumpkin spice flavored, but it is our favorite fall tradition: the 2020 NAHMA Drug-Free Kids Calendar is now on sale. Be one of the first to own this collector’s item by downloading the order form and sending it in today. The calendar cost is $5.50 each, which is a Department of Housing and Urban Development and U.S. Department of Agriculture allowable project expense.
Purchase calendars before Nov. 8 and you are automatically entered in the lucky draw for prizes including NAHMA meeting registrations, books and gift cards. There is a small shipping and handling fee for each calendar.
The calendars feature outstanding original artwork by children, seniors and adults with special needs living in affordable multifamily housing. The underlying message for the annual calendar contest is always a drug-free theme but the association wanted to open the door for more avenues of expression, so a subtheme is incorporated into the poster contest. The subtheme this year is Sharing Our Stories: Learning from Others, Young and Old.
To download the order form, click on the Web Link provided. To see the national winners, visit
https://www.nahma.org/awards-contests/calendar-contest/current-winners
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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.
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The two 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) and the National Apartment Association Education Institute (NAAEI).
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 Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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