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HUD Publishes Interim Rule Extending Notice Period for Evictions
On Oct. 7, the Department of Housing and Urban Development (HUD) published an interim final rule titled Extension of Time and Required Disclosures for Notification of Nonpayment of Rent. The rule prohibits the eviction of residents facing eviction for nonpayment of rent from HUD-subsidized public housing and certain properties with Project-Based Rental Assistance (PBRA) without providing a 30-day notice period that includes information about available federal emergency rental assistance. It applies to Section 8, Section 8 Moderate Rehabilitation, Section 202/162 Project Assistance Contract, Section 202 Project Rental Assistance Contract (PRAC), Section 811 PRAC, Section 236 Rental Housing Assistance Program and Rent Supplement programs. The rule went into effect on Nov. 8, 2021. To read the rule in its entirety, click the Web Link provided.
Congress
"Affordable Housing and the Build Back Better Act"
"California, New York Fight Over Shrinking Low-Income Housing Aid in Democrats’ Bill"
Tax Issues and Tax Reform
"LIHTC Carryover Pool Highest Since 1995–But There’s a Good Reason"
Industry Trends
"Novogradac Operating Expenses Report Finds that Expenses, Income Both Increased for LIHTC Properties in 2020"
"Developers Continue to Face Escalating Costs, Labor Shortages"
State and Local Activities
"New Haven Housing Commission Divided On 'Inclusion'"
Green Building
"From Leaky Windows to Building Codes, This Is How the Infrastructure Bill Will Tackle Buildings"
Association News
NAA Supports Operation Allies Welcome
NAAEI Offers Tax Credit Property Management Online Training
Q3 2021 Apartment Jobs Snapshot
NAHMA Drug-Free Kids Calendars on Sale
NAHMA Releases 2021 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Congress
Affordable Housing and the Build Back Better Act
Reuters (11/12/21) Sprecher, Christina; Sparks, Stephen
While the affordable housing industry started 2021 with a big win when the 4 percent Low-Income Housing Tax Credit (LIHTC) was fixed at a true 4 percent rate, it has the potential to end the year with several additional big wins that will change the industry for at least the next five years. How much momentum the affordable housing industry has going into 2022 depends on whether the Build Back Better Act is enacted into law and what affordable housing provisions make it. The affordable housing industry must address two primary demands: first, the demand for additional affordable housing, especially in high-cost urban areas and second, the demand of residents and the community-at-large for newer amenities and environmentally safer living spaces. Currently, Title XIII, Subtitle E, Part 1 of the Act modifies the 4 percent LIHTC rules to permit additional construction/rehabilitation of affordable housing that will most likely benefit states with higher-cost urban areas. Additionally, Title IV, Subtitles A and B of the Act, distributes federal funds via the Department of Housing and Urban Development (HUD) to state and local housing agencies which can use these funds to improve publicly owned affordable housing and to award grants to for-profit and non-profit owners to modernize their affordable housing properties. While both provisions of the Act have legislative support, based upon the legislative history of the Act, it seems likely that providing federal funds to state and local housing agencies will remain in the Act while modifying the 4 percent LIHTC rules may not. Congress provides significant funding to HUD to create additional affordable housing and to improve existing affordable housing units in Title IV of the Act. HUD will allocate a portion of these dollars to state and local housing agencies which will use some of these funds to improve publicly owned units; however, some funds are earmarked for loans and grants to for-profit and non-profit owners of affordable housing. These private owners should be prepared to reach out to state and local housing agencies about these programs once the Act has been enacted.
California, New York Fight Over Shrinking Low-Income Housing Aid in Democrats’ Bill
Los Angeles Times (10/26/21) Haberkorn, Jennifer; Oreskes, Benjamin
In the scramble to appease centrists by scaling back their massive social safety-net spending bill, Democrats are discussing cutting in half new funds to address public housing and renters’ assistance. Because of the stark differences in the way low-income housing is addressed state by state, the proposed cuts have set off a West Coast-East Coast tug of war over what is expected to be a much smaller $150-billion pie. The largest housing pieces in Democrats’ “Build Back Better” package, still subject to negotiation, divide assistance into three main buckets: repairs on public housing facilities, vouchers for low-income renters, and construction of new low-income housing. The public housing aid would primarily benefit New York and other mostly East Coast and Midwest cities that have large stocks of such housing. New York state has close to 200,000 households in public housing, while California has only 27,000 households living in some form of public housing, according to data from the Center on Budget and Policy Priorities. Low-income renters in New York City and similar cities would also be eligible for vouchers to subsidize their housing payments, which would probably be distributed to cities and counties based on need. Leaders on the West Coast complain that it creates a double-dip effect, in which certain cities would benefit from both provisions. Los Angeles Mayor Eric Garcetti and other California mayors pushed the White House in an October meeting to ensure that cuts would not be made equally between dollars for rental vouchers and money to repair public housing. Leaders in New York, led by Senate Majority Leader Charles Schumer, are fighting just as hard to preserve the public housing assistance. New York's public housing infrastructure needs an estimated $40 billion in repairs.
Tax Issues and Tax Reform
LIHTC Carryover Pool Highest Since 1995–But There’s a Good Reason
Novogradac (10/21/2021)
One would have to go back to the early days of the Low-Income Housing Tax Credit (LIHTC) to find a year when the amount of carryover LIHTCs allocated to states was larger than it is for calendar year 2021. The Internal Revenue Service released Revenue Procedure 2021-44 Monday, allocating nearly $7.8 million in carryover LIHTC allocation to 29 states for calendar year 2021. That amount is the highest such allocation since 1995–the second round of LIHTC carryover allocation–and is roughly three times the average allocation amount for the past decade. The COVID-19 pandemic presumably played a major role in that increase, making this level of carryover unlikely to be duplicated anytime soon. The carryover allocation is made up of LIHTCs that are not allocated by states but are added to a national pool and redistributed to qualified states that apply for the additional credits. Those credits are often available because the allocation process sometimes results in LIHTC authority too small to be allocated to affordable housing developments. The COVID-19 pandemic in 2020 likely also resulted in larger amounts of returned credits, some of which were not reallocated. While the total amount of pool allocation was higher than normal, the number of states was fewer than normal, which makes sense because in order to qualify for carryover allocation a state must have allocated its entire LIHTC ceiling for the preceding calendar year. In the past 10 years, the average number of states to receive allocation from the national pool is 32. The 29 states in 2021 is the fewest since 2011. The national total of $7.8 million in carryover is less than 1 percent of the 2020 total allocation. Unused authority should not be confused for a general lack of demand. National demand for LIHTC remains robust, but the pandemic in 2020 resulted in a unique year.
Industry Trends
Novogradac Operating Expenses Report Finds that Expenses, Income Both Increased for LIHTC Properties in 2020
Novogradac (11/16/2021) Kincer, H. Blair
The first year of the COVID-19 pandemic resulted in increases in both income and expenses for affordable multifamily properties, according to the 2021 Novogradac Multifamily Rental Housing Operating Expenses Report. Among the 1,200 properties included in data collected by Novogradac in both 2019 and 2020, operating expenses increased by 5.4 percent, while rental income increased by 5.0 percent. Despite expenses increasing at a slightly faster rate, net operating income still increased–due to the fact that the baseline amount for income is significantly higher than expenses. Novogradac surveys expenses for multifamily rental housing properties financed by low-income housing tax credit equity to track and analyze the factors that cause variations. Affordable housing property owners and managers in 2021 are adjusting to the new normal of decreasing restrictions, but also to the continued need for extra safety precautions and for the eviction moratoriums that lasted much of the year.
Developers Continue to Face Escalating Costs, Labor Shortages
Affordable Housing Finance (11/01/21) Serlin, Christine
Like many industries across the nation, affordable housing developers are experiencing supply chain challenges, labor shortages, as well as rising construction costs. “The shortage of sufficiently skilled labor is the largest challenge we currently face followed closely by disruptions to the supply chain, both of which are contributing to escalating construction costs,” says Caleb Roope, president and CEO of Eagle, Idaho-based The Pacific Cos. Roope notes that every development The Pacific Cos. is building right now is facing or will face one or more of these problems. The most common material delays for him currently are electrical wiring, doors, cabinets, and plumbing supplies. Jeffrey Kittle, president and CEO of Indianapolis-based Kittle Property Group, says his firm is having similar issues. He says key material suppliers—from cement siding to cabinets—are prioritizing the hot single-family market over multifamily. Developers also are facing hurdles on the operating side of the business. “The insurance market is basically a complete disaster, resulting in significantly higher premiums in best-case scenarios and an inability to obtain coverage in the most extreme situations,” Roope says. “With the size of our portfolio, it was always more efficient to have one master policy. Now, we have broken up our entire portfolio and sought individual policies for each property. While we have realized meaningful savings from this, we have also had to add staff to take on this work. The same labor shortages that are persisting on the construction side are also a threat for long-term operations.” In addition to insurance, Kittle adds that he is seeing some price increases that are hampering operations, from maintenance support to the electrical supplies and gas to run power equipment.
State and Local Activities
New Haven Housing Commission Divided On 'Inclusion'
New Haven Independent (11/15/21) Breen, Thomas
A new report from New Haven’s Affordable Housing Commission has surfaced a divide among its members over whether “inclusionary zoning” will do more to help, or hurt, local low-income renters. That intra-commission debate is detailed in a new 29-page report that the Affordable Housing Commission submitted to the Board of Alders as a communication as part of Monday night’s local legislative meeting agenda. The document represents the first formal publication to come from a city commission that the Board of Alders first created two years ago, and that held its first meeting in April of this year. It includes a host of policy recommendations for the alders to consider, all with the goal of adding new and maintaining existing affordable places to live in town. While most of the report’s policy recommendations have received the unified support of the full commission, a two-and-a-half-page section in the middle of the document reveals a division among these local affordable housing experts around “inclusionary zoning,” a proposal to require developers to set aside affordable units in new and rehabbed apartment complexes citywide, with a focus downtown and on publicly-owned land. “The Affordable Housing Commission has not come to a consensus on the city’s efforts to pass an IZ ordinance and is vocal about their various opinions,” reads the report. Opponents of the proposal claim it fails to “offer a substantial number of affordable units needed," and "creates a restrictive development market that awards large developers with ‘big’ incentives.” Supporters say that inclusionary zoning is more fiscally sustainable because it requires fewer direct public subsidies than traditional affordable housing initiatives.”
Green Building
From Leaky Windows to Building Codes, This Is How the Infrastructure Bill Will Tackle Buildings
Fast Company (11/09/21) Berg, Nate
Residential buildings are the most electricity-consumptive sector in the country. Add in commercial buildings like stores and offices, and buildings account for nearly 75 percent of the nation’s electricity usage. That’s why significant funding to improve energy efficiency in buildings is a major element of President Biden’s Build Back Better plan, which has dedicated about $5 billion to a wide range of programs geared to reduce electricity use in buildings, improve the materials used to build them, and train more people to design, build, and maintain energy-efficient buildings. The bill funds a spectrum of programs to solve problems that range from drafty windows in affordable housing complexes to aging air ducts in schools to outdated building codes. The biggest chunk of funding focused on buildings is a $3.5 billion infusion into the weatherization assistance program. The bill dedicates $550 million for the next fiscal year to the Energy Efficiency and Conservation Block Grant Program, a funding tool used by local governments to issue grants for energy retrofits. A $225 million grant program is being established to help understaffed and underfunded local governments upgrade their building codes, which can have a huge impact on what is required when a new building is proposed in a city or town. Outdated codes may be allowing energy-sucking buildings to rise in place of more efficient ones. The new grant program aims to help get codes updated to the most recent energy-efficiency standards.
Association News
NAA Supports Operation Allies Welcome
National Apartment Association (NAA) has been asked by the Department of Homeland Security to partner in a program announced Aug. 29, Operation Allies Welcome, to help 70,000 Afghan refugees with immediate housing needs. These families, many of whom supported our country’s efforts in Afghanistan during the past 20 years, are seeking to resettle in the United States safely. These refugees have undergone extensive security checks, been tested for COVID-19 and received all standard U.S. vaccinations, including age-appropriate and COVID-19 vaccines. The federal government is working through several prominent national non-governmental organizations to resettle these families and help them obtain housing, jobs, school admission, and cover basic needs. There are 25 markets targeted for resettlement. If you can help at all, please contact NAA Senior Vice President of Government Affairs, Greg Brown. For more information, click the Web Link below.
NAAEI Offers Tax Credit Property Management Online Training
The NAA Education Institute offers a 12-hour online course to prepare students for the SHCM certification exam. The training topics include program regulations, unit eligibility, applicant eligibility and certification, documentation, recordkeeping, compliance reporting and monitoring. This course satisfies the education requirements to apply for the SHCM credential and includes the exam study guide. For more information, click on the Web Link provided below.
Q3 2021 Apartment Jobs Snapshot
The NAA Education Institute 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, the time required to fill a position and the top skills found in job postings. To review the snapshot, use the Web Link provided.
NAHMA Drug-Free Kids Calendars on Sale
Avoid the crowded stores and the shipping delays from online retailers by ordering National Affordable Housing Management Association (NAHMA) 2022 Drug-Free Kids Calendars now. They make great gifts for residents, co-workers, and last-minute holiday visitors. The calendar, consisting of one-of-a-kind artwork created by talented residents, sells out every year. So, now is the perfect time to purchase one—or more—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. 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 With Responsibility Comes Reward: Holding Ourselves Accountable.
To download an order form, click the Web Link provided.
NAHMA Releases 2021 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its 2021 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
December 7-9, 2021
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