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Congress Holds Hearing on CRA
The House Financial Services Committee held a hearing on Tuesday, Jan. 14, to examine proposed changes to the Community Reinvestment Act (CRA), one of the main drivers of affordable housing investment and a key tool for promoting opportunity across the country. The committee also hosted a separate hearing on gentrification and homelessness. An overview of the committee’s hearings is available by clicking on the Web Link provided below.
Industry Trends
"Novogradac Listing Shows Increase in OZ Equity"
"Workforce Housing Gets Creative With Funding"
Asset Management
"Multifamily Finance Experts Discuss 2020 Outlook"
Congress
"The Conundrum Affordable Housing Poses for the Nation"
State and Local Activities
"State LIHTC Can Help Meet Arizona Rental Housing Market’s Spiking Demand"
"Affordable Housing on Santa Cruz Docket in New Year"
Green Building
"Energy Efficiency Initiatives Have Significantly Cut Energy consumption Per Square Foot"
Association News
Affordable 100 Survey Available for 2020
Help Promote 2020 Scholarship Applications to Residents
Learn the Latest in Affordable Housing at NAHMA’s March Meeting
NAHMA Releases 2019 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
Novogradac Listing Shows Increase in OZ Equity
Affordable Housing Finance (01/10/20) Serlin, Christine
Novogradac estimates that in a span of a month, Qualified Opportunity Funds (QOFs) saw a more than 50 percent increase in raised equity. The QOFs on the Opportunity Funds Listing of a national accounting and consulting firm found that $6.72 billion was raised in early January, compared with $4.46 billion reported on Dec. 10. The number of QOFs raising equity also increased, from 184 to 292. Novogradac’s survey comes from QOFs voluntarily providing information or from other public resources. Michael J. Novogradac, managing partner, says, "Furthermore, we expect even greater levels of investment in the coming weeks and months thanks to the additional clarity provided by the final regulations issue by the Treasury Department in December." The opportunity zone (OZ) incentive enacted as part of the Tax Cuts and Jobs Act of 2017 offers capital gains tax relief to those who invest in these targeted distressed areas. There are more than 8,700 census tracts designated as OZs in all 50 states, District of Columbia, and U.S. territories. Of the $6.72 billion in equity reported raised on Novogradac's listing, 68.9 percent was by funds with at least some focus on residential, with 13.5 percent raised by funds with an exclusive focus on residential. The average equity raise was about $23 million for the QOFs on the listing. Fourteen funds reporting raising at least $100 million, Novogradac found. Roughly 35 percent of the QOFs have a national focus, 9 percent are regional, and 16 percent focus on a single city.
Workforce Housing Gets Creative With Funding
GlobeSt.com (01/15/20) Borland, Kelsi Maree
Investors are focusing more on workforce housing financing amid rising demand for the market segment. Cecile Chalifour, west division manager for community development banking at Chase, says, "I expect to see an ongoing focus on permanent supportive housing and the 'missing middle,' as well as continued discussions about rent restrictions, prioritizing the allocation of subsides and tools outside of the Low-Income Housing Tax Credit to explore. We expect a high number of large projects financed through bonds to be bid out this year, which may push equity pricing down, and we still expect competitive capital to be available on the debt side." Chalifour notes that while California has been working in this direction, the matter is a national concern, and that "more resources and new tools are needed to help expand the pool of sustainable options and produce more affordable housing in the long term." Obstacles exist to bringing this asset class to market, however, she notes. Chalifour says, "What's going to be interesting to watch is where the industry lands on priorities for bond allocation and what it means for deeply targeted deals beyond projects that are 50 percent-60 percent Area Medium Income." Chase seeks to monitor the issue closely and collaborate with all parties to "collectively make a dent in helping to solve the affordable housing crisis," says Chalifour.
Asset Management
Multifamily Finance Experts Discuss 2020 Outlook
Affordable Housing Finance (01/06/20) Serlin, Christine
Finance leaders in both the affordable and market-rate multifamily sectors expect that capital will continue to flow amid strong housing demand nationwide. Rich Martinez, senior vice president of multi-family production and sales at Freddie Mac, notes that in addition to low interest rates, there is also positive rent growth of more than 4 percent and vacancy rates that have been moderating but not increasing. He says Freddie Mac does not plan to introduce any new products but will focus on becoming more efficient and effective in delivering the current ones. Also on the watch list is the potential for private-activity bond volume cap to be tapped out in several states, including California. "There’s a real potential for California using a portion of its bond cap for non-housing activities, which could be a meaningful change," says Paul Weissman, senior managing director and head of originations for affordable housing finance at Hunt Real Estate Capital. He adds, "Virtually all the bond volume cap in recent years has gone to affordable housing. Some deals might struggle to get bond volume in 2020." Weissman is also seeing more alternative sources of capital come into the affordable sector and multifamily sector. Shahin Yazdi, a principal and managing director at George Smith Partners, believes the industry should start preparing for a possible recession. "The best way to prepare for that, regardless of the asset type, is to lock down the lowest rates on your loans. If you’re a long-term holder, securing long-term rates is very beneficial," Yazdi says.
Congress
The Conundrum Affordable Housing Poses for the Nation
Washington Post (01/02/20) Bernstein, Jared; Parrott, Jim; Zandi, Mark
Nationwide, there is a lack of workforce and affordable housing. Prices for the lowest-priced houses have steadily grown twice as fast in recent years compared to prices for the highest-priced houses, and now exceed what many families of modest means can afford. Meanwhile, recent census data indicates that while the median cost of rent and utilities rose by 13 percent over the past nearly 20 years, median income is up less than 1 percent (both inflation-adjusted). What is needed are policies that reduce the cost of building houses more Americans can afford. This includes strengthening effective and reliable programs that aim to reduce the cost of development, such as the Low-Income Housing Tax Credit and the New Market Tax Credit. These tax breaks have helped address the supply problem, but instead of expanding them, the recent tax cut reduced their value to developers. Officials at all levels of government must do more to ensure that private investors target the neighborhoods that most need the help. Communities should be given incentives to ease restrictive zoning and reduce high fees for building new houses. Critical federal funds for roads and other infrastructure should be linked to how well communities are addressing their needs for workforce and affordable housing. Community development block grants could also be tied to such metrics.
State and Local Activities
State LIHTC Can Help Meet Arizona Rental Housing Market’s Spiking Demand
Arizona Capitol Times (01/15/20) LeVinus, Courtney Gilstrap; Serviss, Joan
Courtney Gilstrap LeVinus, president and CEO of the Arizona Multihousing Association, and Joan Serviss, executive director of the Arizona Housing Coalition suggest the best way to meet the increasing demand in the state's rental housing market is to pass the proposed Arizona Low-Income Housing Tax Credit (LIHTC) program. The program uses as its model the federal LIHTC program that has supported the construction or renovation of more than 45,000 properties and nearly 3 million housing units nationally. Already, 16 states – including Arizona's neighbors in Colorado, Utah, and New Mexico – have created state-level "LIHTC booster" programs to speed up the construction of housing for those who otherwise would struggle to afford rent. Arizona's state LIHTC would use the same stringent regulatory parameters as the federal LIHTC program. The Arizona Department of Housing already manages the federal process through its Qualified Allocation Plan, so a state LIHTC program would create no additional layer of government. State LIHTC credits could be targeted toward specific communities in needs, including Arizona’s urban and rural areas, the homeless, seniors, military veterans, and schoolteachers. A state LIHTC would also help draw more developer interest when it comes to building rental housing at all price points and across all demographics. At present, many developers shy away from building rental units at below market rates, given that land, labor and material costs are the virtually same for building so-called "affordable units" as they are for what often gets labeled "luxury apartments."
Affordable Housing on Santa Cruz Docket in New Year
Santa Cruz Sentinel (CA) (01/12/20) York, Jessica A.
On Jan. 14, Santa Cruz, Calif., officials examined issues related to the city’s affordable housing shortage. This included San Francisco-based housing developer Reliant Group potentially applying for as much as $45 million in tax-exempt bonds and Low-Income Housing Tax Credit financing to acquire and rehabilitate adjacent Blaine Street apartment complexes, the affordable housing Riverfront Apartments, and market-rental Casa Del Rio Apartments. As part of the project, the combined 103 rentals would be deed-restricted for 55 years to serve as income- and rent-restricted for tenants at or below 60 percent of the area median income. Reliant Group's planned renovation work would take an estimated eight months to complete and be done with tenants in place, according to an Economic Development Department report. The majority of the Riverfront Apartments inhabitants receive low-income funding assistance from a potentially renewable Housing Assistance Payments contract set to expire in 2023. While Casa Del Rio has no income or rent restrictions, a majority of the units are occupied by tenants with Housing Authority of the County of Santa Cruz housing vouchers. A vote to support Reliant's efforts to obtain project bonds from California Public Finance Authority would not obligate Santa Cruz to repay the funding. Another issue faced by the Santa Cruz City Council is updating the city's housing construction rules requiring developers to set aside 20 percent of their new for-sale or -rent units at low-income affordability rates.
Green Building
Energy Efficiency Initiatives Have Significantly Cut Energy consumption Per Square Foot
Building Design + Construction (01/08/20) Fabris, Peer
Energy efficiency initiatives have saved hundreds of billions of dollars in energy costs while preventing sharp increases in greenhouse gas emissions, according to the recently released Energy Efficiency Impact Report by a consortium of three energy efficiency organizations. Efficiency investments since 1980 prevented a 60 percent increase in energy consumption and carbon emissions and are responsible for half of the carbon dioxide emissions reductions in the U.S. power sector since 2005, the report says. Energy-efficient lighting has been a notable success, with a market for LEDs that went from an emerging technology to dominant deployment in less than a decade. The U.S. has decreased its lighting energy consumption by 16 percent from 2001 to 2015, despite a 25 percent increase in lamp inventory by 25 percent over that period. Residential energy use per household has fallen by approximately 16 percent from 2001 to 2018. Model building energy codes are expected to save $126 billion in energy costs and 13 quads of primary energy from 2010 to 2040. Policymaking, including federal, state, and local standards and codes, has been a critical enabler of energy efficiency deployment, but progress is now at risk of stalling, the report concludes.
Association News
Affordable 100 Survey Available for 2020
The National Affordable Housing Management Association (NAHMA) is inviting affordable multifamily property management companies to take part in its annual Affordable 100 survey. The Affordable 100—a list of the 100 largest affordable multifamily property management companies ranked by affordable unit counts—is featured on the association’s website, 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.
Additionally, the Affordable 100 survey data is used as a tool to assist in NAHMA’s policy and appropriations advocacy in Washington, D.C., and around the nation.
To take part in the survey, click on the link provided below. Responses are due Jan. 31.
Help Promote 2020 Scholarship Applications to Residents
Beginning Thursday, Jan. 16, the NAHMA Educational Foundation will be accepting applications for scholarships to be awarded to worthy student residents in 2020. Eligibility for the program requires that an applicant be a resident in good standing at an AHMA/NAHMA affiliated apartment community and be either a high school senior with a minimum GPA of 2.5, a general equivalency diploma holder or a matriculated student with a minimum GPA of 2.3 at an accredited college or trade/technical school. The foundation will no longer accept applications from students in graduate-level programs.
The required online application components include an application form, two academic and/or professional references, an essay and a certification of residency in good standing form. Additionally, a grade transcript showing grades through the fall 2019 semester is also necessary and is the only component submitted to the foundation via U. S. mail. The deadline for completed applications is 10 p.m. Eastern on Friday, May 15.
The foundation requests that you publicize and promote the scholarship program and the availability of the application to your residents and encourage them to apply today. In 2019, the foundation awarded 109 scholarships worth a total of $272,500 to worthy student residents.
To download a promotional flyer to post and share with your residents, click on the Web Link below. To access the scholarship application, visit https://nahma.communityforce.com.
Learn the Latest in Affordable Housing at NAHMA’s March Meeting
The 2020 National Affordable Housing Management Association (NAHMA) Biannual Top Issues in Affordable Housing winter conference is the best place to learn about the latest trends in Department of Housing and Urban Development (HUD) programs, housing tax credits, senior living, rural housing and more. Register for the meeting today and save $50. The three-day event, taking place March 8-10 in Washington, D.C., features educational panels, networking opportunities, the Industry Awards evening reception and the Communities of Quality (COQ) Awards luncheon. The event concludes with prearranged Capitol Hill meetings with congressional representatives and their staff. To find out more, click the link below.
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
NAA CompusConnex
February 18-19, 2020
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NAHMA Biannual Top Issues in Affordable Housing Winter Conference
March 8-10, 2020
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NAA Advocate
March 10-11, 2020
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NAA Apartmentalize
June 17-19, 2020
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 25-27, 2020
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