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HUD Suspends REAC Inspections


The Department of Housing and Urban Development (HUD) announced March 13 that it is suspending Real Estate Assessment Center (REAC) inspections and Management Occupancy Reviews for all Multifamily properties until further notice. Where there is an exigent circumstance or reason to believe that there is a threat to life or property at a specific location, inspections will be conducted by HUD quality assurance inspectors in compliance with the Centers for Diseases Control (CDC) guidelines. HUD staff is working diligently to ensure all housing assistance payments, operations funding and various other funding streams continue to be obligated in the event of a prolonged telework situation. To read the notice in its entirety, click the Web Link provide below.
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Tax Issues and Tax Reform


"Investors Layer on Government Tax Credits for OZ Developments"

Industry Trends


"Positive Outlook for LIHTC Market"
"Lenders Anticipate 2020 Growth"

Congress


"Is 2020 the Year to Pass Infrastructure Legislation That Includes Community Development Tax Incentives?"

State and Local Activities


"Detroit Partnership Aims to Preserve Affordable Housing in the City"
"Maine Enacts Affordable Housing Tax Credit"

Green Building


"Enterprise Updates Standards for Affordable Green Building"

Association News


Get the Latest Updates on Coronavirus
Attend NAA’s Apartmentalize Education Conference
NAAEI Offers Free Webinar on Coronavirus Outbreak
Leveraging Your LinkedIn Profile
2020 February Apartment Jobs Snapshot
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Tax Issues and Tax Reform


Investors Layer on Government Tax Credits for OZ Developments
GlobeSt.com (02/27/20) Brown, Mariah

To maximize tax incentives in Opportunity Zone projects, investors are also using such subsidies as Low-Income Housing Tax Credits, historic tax credits, and new markets tax credits, says Steve Polivy, chair of Akerman’s Economic Development and Incentives Practice. He says, "I consider those programs to be staples. Particularly in New York, there is a great deal of activity in affordable housing because of the mandatory inclusionary program. Developers who enhance the zoning capacity of a site will have a mandatory inclusionary housing component and low-income housing tax credits are natural to complete the capital stack there." The New Markets Tax Credit Program attracts private capital into low-income communities, granting individual and corporate investors tax credits against their federal income tax for making equity investments in Community Development Entities, or specialized financial intermediaries. The Opportunity Zone program granting tax deferment credits to developers in designated census tracts has been a highly desired tax credit to plug in the capital stack. Opportunity Zone census tracts are areas considered 'in need of renewal' and properties in those zones have to meet the necessary redevelopment guidelines, Polivy says.
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Industry Trends


Positive Outlook for LIHTC Market
Affordable Housing Finance (03/04/20)

Low-Income Housing Tax Credit (LIHTC) syndicators anticipate that the stability seen through much of 2019 will continue at least for the near term. Tammy Thiessen, managing director of equity sales at RBC Capital Markets, asserts, "Nothing will happen in D.C. concerning the tax credit this spring. There’s no separate housing bill, and the budget is already approved." The average price paid for credits in the most recent fourth quarter was about 93 cents per dollar of credit, up from 91 cents in the same period in 2018. Yields to investors averaged about 4.6 percent, unchanged from a year ago, according to the survey of 2019 activity. For the coming year, several LIHTC syndicators expect to see more deals using the new income-averaging option, which generally allows LIHTC-qualified units to serve households earning as much as 80 percent of the area median income (AMI) as long as the average income limit at the property is no more than 60 percent of the AMI. Many will closely follow California, which passed legislation providing for an additional $500 million of state tax credits to be attached to 4 percent new construction deals this year, says Christine Cormier, senior vice president of investor relations at WNC. Meanwhile, in addition to more bond deals, the industry could see more activity in the secondary market. Gayle Manganello, senior vice president and manager of originations at PNC Bank, advises developers to be conservative when pricing LIHTCs for their applications, saying they "should price their apps a penny or two less than current market conditions."
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Lenders Anticipate 2020 Growth
Affordable Housing Finance (03/02/20) Serlin, Christine

Amid robust demand for affordable and workforce housing nationwide, lenders’ volumes were strong in 2019 and growth is expected to continue in the year ahead. Affordable Housing Finance's (AHF) Top 25 affordable housing lenders provided more than $41 billion in permanent and construction loans to developments that serve up to 80 percent of the area median income in 2019. This is up from the AHF Top 25 lenders’ $35.2 billion in 2018 and $30.5 billion in 2017. Citi Community Capital remains leader, having lent nearly $6.1 billion to affordable properties in 2019, down from nearly $7 billion in 2018. Wells Fargo remained No. 2, lending $4.7 billion in 2019, followed by Stifel, Nicolaus & Co. with almost $4.2 billion. Stifel attributed its $2.5 billion year-over-year increase to an expansion of the firm’s affordable housing team and a significant increase in the number of 4 percent Low-Income Housing Tax Credit (LIHTC) and bond issues. Another notable lender was KeyBank Real Estate Capital, which provided $61.4 million of construction financing and LIHTC equity for Community Development Partners’ 224-unit, affordable apartment complex in Gresham, Ore., scheduled to be completed in 2021. In addition, it secured $32.4 million of fixed-rate Freddie Mac permanent financing for the property. Merchants Capital secured $21 million in funding using a Freddie Mac unfunded forward LIHTC cash loan on behalf of affordable housing developer Dunn Development Corp. for the T-Building, formerly the Triboro Hospital for Tuberculosis, in Jamaica, N.Y.
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Congress


Is 2020 the Year to Pass Infrastructure Legislation That Includes Community Development Tax Incentives?
Novogradac Journal of Tax Credits (03/20) Vol. 11, No. 3 Novogradac, Michael

President Donald Trump’s fiscal year 2021 budget proposal calls for $1 trillion in direct federal investment in infrastructure over 10 years. If the GOP and Democrats find common ground on infrastructure legislation, many existing proposals involving the Low-Income Housing Tax Credit (LIHTC), new markets tax credit (NMTC), and historic tax credit (HTC) could potentially be enacted this year. In late January, House Democrats advanced an infrastructure plan at a House Ways and Means Committee hearing, unveiling a five-year, $760 billion infrastructure framework called "Moving Forward." The spending in the framework exceeds $760 billion and includes increases in LIHTC, NMTC and HTC funding, but does specify dollar amounts for the increases. Meanwhile, the nonpartisan Joint Committee on Taxation (JCT) issued a report that considered the use of private activity bonds (PABs) and tax incentives to fund infrastructure projects. The report noted that the permitted purposes of PABs include qualified residential rental projects, which are apartment often paired with 4 percent LIHTCs. The JCT report also mentioned the LIHTC and HTC as routes to "housing infrastructure." The Senate Finance Committee and House Ways and Means Committee will play a key role in whether any infrastructure legislation advances, providing an opportunity for proponents of LIHTC, NMTC, HTC, and Move America Act to push for provisions to be included in legislation.
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State and Local Activities


Detroit Partnership Aims to Preserve Affordable Housing in the City
Detroit News (03/09/20) Williams, Candice

To preserve affordable housing in Detroit, the city’s Housing & Revitalization Department formed a partnership with six organizations. The new Preservation Partnership comes as the city could potentially lose thousands of properties with expiring Low-Income Housing Tax Credits (LIHTCs) at the end of their 15-year compliance or renewal periods through 2023. The six organizations joining the Preservation Partnership are Enterprise Community Partners; Data Driven Detroit; Elevate Energy; Community Investment Corp; United Community Housing Coalition; and a joint initiative of Cinnaire and CHN Housing Partners. Detroit Mayor Mike Duggan notes that of the city's 10,000 affordable housing units, 6,000 have yet to renew commitments to remain affordable. LIHTCs are available through the Michigan State Housing Development Authority (MSHDA), and come with a 15-year compliance period with the option to renew for another 15 years. According to MSHDA, so far no developers with an LIHTC property have opted out of the extended use period. Preservation Partnership will work to maintain affordable housing through either the renewal of LIHTCs or by coordinating new or restructured financing. Housing renovation will also be part of the mix. The Preservation Partnership team will cost the city about $1.6 million to run over the next three years and will be funded partly by Neighborhood Stabilization Program dollars, says Donald Rencher, director of the Housing & Revitalization Department.
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Maine Enacts Affordable Housing Tax Credit
National Law Review (02/25/20) Block, Jonathan; Eimicke, Kris J.; Goldberg, Olga J.

Maine Gov. Janet Mills signed L.D. 1645 into law on Jan. 12, 2020, creating the state's new affordable housing tax credit (AHTC). The Maine State Housing Authority will be responsible for overseeing and allocating $80 million of credits to affordable rental housing developers between 2021 and 2028, with up to $10 million allocated annually. Unused allocations can be carried forward to subsequent years. Mill says the credit seeks to create nearly 1,000 additional affordable housing units over eight years and increasing Maine’s current rate of production by 50%. The AHTC is modeled on Maine’s existing historic preservation tax credit and some aspects of the federal Low-Income Housing Tax Credit (LIHTC). Eighty percent of the AHTC credits are available for "qualified Maine projects," referring to new construction or rehabs of existing buildings that have not been used for residential purposes. These projects are subject to a restrictive covenant requiring 60 percent of the units to be rented to tenants with household income at or below 50 percent of area median gross income, and that are eligible for the 30 percent present value federal credit because they utilize tax-exempt financing. For affordable housing projects funded by tax-exempt bonds, the Maine AHTC equals the federal LIHTC; for other projects, the AHTC is 50 percent of qualified basis, up to $500,000 for a single affordable housing project. No more than 20 percent of the credits can be used for projects that do not utilize tax-exempt financing.
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Green Building


Enterprise Updates Standards for Affordable Green Building
Real Estate Weekly (01/30/20)

Enterprise Community Partners has unveiled the 2020 Enterprise Green Communities Criteria, which set the standard for green affordable housing construction across the U.S. Twenty-seven states and Washington, D.C., currently mandate that affordable housing developments receiving public funds adhere to the Criteria, which in 2020 alone will be used to create or maintain more than 200 environmentally friendly multifamily affordable housing developments. “The choices developers make during the design and construction process—location, building materials, the configuration of common spaces, and so many more—make a tangible difference for people, their homes, and their communities,” said Enterprise President Laurel Blatchford. “The Criteria help ensure those choices take into account everything we know about healthy living environments and energy efficiency. In the 2020 update, we are expanding the requirements that help protect vulnerable communities from the effects of our changing climate and ensuring that the buildings we create can withstand disasters that can upend lives and destroy whole communities.” The Criteria will for the first time offer two levels of certification, with Enterprise Green Communities Certification Plus recognizing the most outstanding green developments that show the most progress along the “Path to Zero.” Other Criteria updates include a New Project Priorities Survey to shape project goals with resident input, an enhanced stormwater management strategy, and a smoke-free requirement for all common spaces.
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Association News


Get the Latest Updates on Coronavirus

The National Affordable Housing Management Association (NAHMA) has created a Coronavirus Information and Resources webpage to provide members with the latest updates in a rapidly changing situation. Additionally, NAHMA is emailing members as new information becomes available. A direct link to the webpage is available on NAHMA's home page or click on the Web Link below.
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Attend NAA’s Apartmentalize Education Conference

Apartmentalize, formerly the National Apartment Association (NAA)’s Education Conference & Exposition, is the industry’s premier education conference and trade show, attracting 10,000 multifamily housing professionals seeking education, networking and business opportunities. It is the largest event in the multifamily housing industry. This year’s conference will be held in Boston, Mass., from June 17-19, and will feature over 80 education sessions. To find out more, view the conference schedule and register to attend, visit the link below.
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NAAEI Offers Free Webinar on Coronavirus Outbreak

Real estate managers around the world are concerned about the health and well-being of their residents, as well as operational and business implications related to the spread of the coronavirus. The NAA Education Institute (NAAEI) is offering a free recording of a live panel discussion on addressing the spread of the novel coronavirus (COVID-19) and developing policies and procedures around this infectious disease. Click on the Web Link below to order the free webinar.
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Leveraging Your LinkedIn Profile

In this prerecorded session, Anne Pryor, a globally recognized top 10 LinkedIn sales trainer, shares techniques to find and create meaningful connections to grow your personal and apartment community brand. You will learn how to get your LinkedIn profile noticed, how to share thought leadership and engage with members through hashtags and posts, and how to use advanced search techniques to find great connections. The cost of the webinar is $75. Click on the Web Link below to order the webinar, which is worth one continuing education credit.
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2020 February 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. To view the snapshot, click on the Web Link provided.
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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.
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Upcoming Events

NAA Apartmentalize
June 17-19, 2020
More

NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 25-27, 2020
More
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March 2020