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President Biden Announces COVID-19 Relief Proposal
This week, President Joe Biden released his $1.9 trillion legislative proposal for a comprehensive COVID-19 relief package, including providing essential resources and protections for workers and low-income renters. This package includes more than $400 billion to respond to COVID-19 and to try to speed up the vaccine rollout; $1 trillion in direct relief to households; $30 billion in emergency rental and utility assistance, and approximately $440 billion for small businesses and communities hit hard by the pandemic.
Tax Issues and Tax Reform
"How The Low-Income Housing Tax Credit Regs Could Be More Flexible"
"Back to Blog Year End 2020 Tax Bill: What It Means, What to Do"
Congress
"Congress Passes Massive COVID-19 Relief Omnibus Package"
IRS-Related Activities
"IRS Extends Temporary Relief for LIHTC Properties due to COVID-19 Pandemic"
State and Local Activities
"WHEDA Sees Strong LIHTC Demand"
Green Building
"Amid Efforts to Reduce Carbon Emissions, Tony Evers' Administration Eyes Wisconsin Building Codes"
Association News
Scholarship Application Now Available Online
March Meeting Registration Opens Soon
Last Chance to Get Your Drug-Free Kids Calendar
NAHMA Releases 2020 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Tax Issues and Tax Reform
How The Low-Income Housing Tax Credit Regs Could Be More Flexible
Forbes (01/07/21) Sapirie, Marie
The Biden administration is expected to review and finalize recently proposed regulations governing the Low-Income Housing Tax Credit (LIHTC) program. The Joint Committee on Taxation estimated that between 2020 and 2024, the credit will cost $54.6 billion. Prop. reg. section 1.42-19(b)(3)(i) states that the imputed income limitation designations of specific units may not be changed. The initial designation of all units included in the average income test must be completed by the end of the first tax year of the credit period. For instance, if a unit is rented to residents with an income at 80 percent of the area median gross income, it appears that that cannot later be changed, says Glenn Graff of Applegate & Thorne-Thomsen PC. The average income test has a rule on what to do when the income of the tenants of a unit rises above 140 percent of the larger of 60 percent of the area median gross income or the unit's designated imputed income limitation. The next available unit rule in prop. reg. section 1.42-15 is intended to ensure that owners rent the next available unit to a qualified low-income resident if the incomes of other current residents of the building rise. In that case, the unit cannot be treated as a low-income unit if any unit in the building of a comparable size or smaller is rented by a new resident whose income is larger than the applicable imputed income limitation. Notice 2020-53 permitted an extension for building owners to meet the 10 percent test in section 42(h)(1)(E)(ii).
Back to Blog Year End 2020 Tax Bill: What It Means, What to Do
Novogradac (01/18/2021) Novogradac, Michael
At the close of 2020, affordable housing stakeholders were optimistic because of the extension and expansion of several tax incentives. The fiscal year 2021 omnibus spending bill signed in late December by President Donald Trump included a minimum 4 percent rate for the Low-Income Housing Tax Credit (LIHTC). The 4 percent floor–effective for acquisition credits allocated after Dec. 31, 2020, and for bond properties placed in service and financed by private-activity bonds (PABs) issued after Dec. 31, 2020, will make many developments financially feasible. Novogradac estimates that an additional 130,000 homes will be financed from 2021 through 2030 because of the 4 percent minimum rate. The legislation also provided an extra $1.2 billion in disaster LIHTC authority, and granted LIHTC properties in disaster zones an extra 12 months to satisfy the 10 percent test and the placed-in-service deadline. Allocation agencies were given authority to carry over the disaster LIHTCs to 2022 if needed. The disaster credits go to 11 states and Puerto Rico, although Novogradac estimates that about 64 percent of the credits will be allocated to California. When taking into consideration Novogradac's estimated $3.3 billion increase in the LIHTC market due to the 4 percent floor (at current PAB levels), a $4.5 billion increase in LIHTCs for 2021 is possible. Bond cap allocating agencies should consider increasing the amount of bond cap allocated to affordable rental housing as well as revisit the relative priorities for the use of bonds for residential rental housing.
Congress
Congress Passes Massive COVID-19 Relief Omnibus Package
Affordable Housing Finance (12/21/20) Serlin, Christine
Congress in December passed $900 billion in COVID-19 pandemic relief and $1.4 trillion in government funding for the remainder of fiscal 2021. The pandemic relief and the omnibus package includes a permanent minimum 4 percent Low-Income Housing Tax Credit (LIHTC) rate for housing bonds issued after Dec. 31. The legislation also includes an additional allocation of $1.1 billion in housing tax credits for states impacted by disasters. Additionally, the relief package provides measures for households facing financial distress. Eligible renter households must have 2020 incomes at or less than 80 percent of the area median income (AMI), and states and localities must prioritize households earning at or less than 50 percent of the AMI or those who have been unemployed for 90 days. At least 90 percent of these funds must cover financial assistance, including back and forward rent and utility payments, and other housing expenses. Assistance can be provided for 12 months. Up to 10 percent of the overall funding can be used to provide case management and other services related to the pandemic and keeping renters stably housed. The bill also extends the Centers for Disease Control and Prevention's eviction moratorium, which was set to expire on Dec. 31, through Jan. 31. "Extending the moratorium through January provides time for emergency rental assistance to be distributed, and for President-elect Biden to improve and further the moratorium immediately after being sworn into office," says Diane Yentel, National Low Income Housing Coalition president and CEO.
IRS-Related Activities
IRS Extends Temporary Relief for LIHTC Properties due to COVID-19 Pandemic
Novogradac (01/15/2021)
The Internal Revenue Service (IRS) on Jan. 15 issued a notice extending temporary relief for Low-Income Housing Tax Credit (LIHTC) properties from COVID-19-related difficulties and providing new relief. Notice 2021-12 extends certain deadlines in previous notices from Dec. 31, 2020. Among the extensions are the 10 percent test for carryover allocations and the 24-month minimum rehabilitation expenditure period, both of which are extended to Sept. 30. The deadline for income recertifications and compliance monitoring is extended to Oct. 1 and the placed-in-service deadline is extended to Dec. 31. Qualified allocation plan meetings may be held by telephone through Sept. 30 and medical personnel or other essential workers who provide services during the pandemic may receive emergency housing in LIHTC properties through Sept. 30. The notice extended or created several other deadlines.
State and Local Activities
WHEDA Sees Strong LIHTC Demand
Affordable Housing Finance (01/11/21)
Demand for Low-Income Housing Tax Credits continues to outpace the federal and state resources available in Wisconsin. For the 2021 tax credit award cycle, the Wisconsin Housing and Economic Development Authority (WHEDA) has received applications for 34 projects seeking $29.6 million in federal 9 percent housing tax credits to build 1,671 units available for low- to moderate-income renters. WHEDA also has received applications for 20 projects seeking $16.2 million in state 4 percent housing tax credits and $11.9 million in federal 4 percent housing tax credits to build 1,542 affordable units, reported agency leaders. Eleven of the proposed 34 federal 9 percent projects are seeking to qualify under rural program set-asides while five of the 20 state 4 percent projects are seeking to qualify for designated rural awards. WHEDA received approximately $31.9 million in federal and state housing tax credits for the 2020 award cycle. WHEDA CEO Joaquín Altoro says, "The demand for these highly competitive tax credits indicates a continuing, acute shortage of affordable housing throughout Wisconsin...Many factors are contributing to the shortage, and at WHEDA we are continuing to work with our partners to achieve better alignment through federal resources, private investment incentives, local development policies, employment opportunities, and other tools." Funding requests exceeded the supply of state and federal housing credits in 2020, when applicants sought $61 million.
Green Building
Amid Efforts to Reduce Carbon Emissions, Tony Evers' Administration Eyes Wisconsin Building Codes
Wisconsin State Journal (01/04/21) Hubbuch, Chris
Wisconsin Governor Tony Evers has begun a review of state building codes, an effort that is expected to result in more energy efficient buildings and reduced greenhouse gas emissions. An advisory board will review and update codes for commercial and multifamily buildings. Wisconsin was once one of the top states for energy efficiency standards. However, the state has since fallen to number 26 in the American Council for an Energy Efficient Economy’s 2020 rankings. That drop was largely caused by residential building codes that over 10 years old and weakened commercial building codes. Officials have also blamed weak building codes as a reason the state was unable to meet its carbon-reduction goals. Updated building codes are considered the most cost-effective way to cut energy consumption and emissions. Studies have found that every dollar spent on Wisconsin's ratepayer-funded energy efficiency program generates between $3 and $5 in net benefits.
Association News
Scholarship Application Now Available Online
The NAHMA Educational Foundation kicked off the scholarship season by releasing the 2021 scholarship application on Jan. 15, 2021. This will be the 15th consecutive year that the foundation will be making scholarships available to worthy student residents.
In 2020, the foundation awarded 108 scholarships worth a total of $270,000.
Applicants can access the application by going to https://nahma.communityforce.com or visiting www.nahma.org and clicking on the Educational Foundation icon. The application is digital and must be filed online. The deadline for completed applications is May 15, at 10 p.m. Eastern time.
The criteria for a completed application and the selection criteria remain the same as they have been for the past several years. 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 grade point average of 2.5, a general equivalency diploma holder or a matriculated student with a minimum grade point average of 2.3 at an accredited college or trade/technical school. Applications from students in graduate-level programs will not be accepted.
A downloadable flyer promoting the scholarship to residents is available to share.
For more detail about the scholarship or to download the flyer, click on the Web Link provided.
March Meeting Registration Opens Soon
Registration for NAHMA’s NAHMA Biannual Top Issues in Affordable Housing Virtual Winter Conference, March 8-11, 2021, opens this week.
The virtual meeting features panels concentrating on the top issues facing affordable housing and educational sessions on work-life balance, trends in affordable rental housing, and resident services and engagement, and more. The meeting also honors the winners of the Communities of Quality Awards and the AHMA and Industry Awards.
Click on the Web Link below to see the preliminary agenda.
Last Chance to Get Your Drug-Free Kids Calendar
Don’t miss your chance to own a one-of-a-kind 2021 NAHMA Drug-Free Kids Calendar. Download the order form from the NAHMA Online Store and send it in today. They make great giveaways for residents and staff. The calendar cost i $5.50 each, which is a Department of Housing and Urban Development and U.S. Department of Agriculture allowable project expense. 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. Still, 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 My Voice Will Be Heard: Speaking the Language of Love.
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
/.
NAHMA Releases 2020 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its 2020 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 issue of NAHMA News. 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 Digital Studio
February 25, 2021
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NAHMA Biannual Top Issues in Affordable Housing Virtual Winter Conference
March 8-11, 2021
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NAA Advocate
March 9-10, 2021
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NAA Digital Studio
April 22, 2021
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NAA Apartmentalize
June 16-18, 2021
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NAAEI Affiliate Education Conference
August 2-4, 2021
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NAA AEX Live
August 4-6, 2021
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NAA Digital Studio
September 14, 2021
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NAHMA Biannual Top Issues in Affordable Housing Virtual Fall Conference
October 20-22, 2021
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NAA Assembly of Delegates
November 2-4, 2021
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NAA Digital
December 7-9, 2021
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News summaries © copyright 2021 SmithBucklin
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