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IRS Issues LIHTC Pandemic Relief Extensions


In response to the continuing impact of COVID-19 and precautions necessitated by new disease variants such as delta and omicron, the IRS has issued Notice 2022-05, extending widespread temporary relief from certain requirements for Low-Income Housing Tax Credit (LIHTC)-financed and private activity bond (PAB)-financed properties, including compliance monitoring notifications and deadlines.
Notice 2022-05 also extends previous relief for the 10% test for carryover allocations, the 24-month minimum rehabilitation period, the placed-in-service deadline, the reasonable period for restoration or replacement in the event of casualty loss, and agency correction periods. The notice also provides an extension to satisfy occupancy obligations, and the closure of amenities or common areas in LIHTC properties due to COVID-19 will not result in a reduction of eligible basis, and essential workers may be provided emergency housing in LIHTC properties.
To read the notice, click the Web Link provided.
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Congress


"Advocates Continue to Push Affordable Housing Priorities"

Industry Trends


"Critical Issues for Affordable Housing in 2022"
"Short Term Rentals Are an Opportunity for Some, but Are Impacting Affordable Housing"

State and Local Activities


"Boston Ends Parking Minimums for Affordable Housing"
"Illinois Property Tax Incentive Could Change the Game For Affordable Housing Development"
"Rhode Island Failed to Use More Than $1 Billion for Affordable Housing, State Senator Says"

Green Building


"Massachusetts Startup Sees Path to More Efficient Windows With New Material"

Association News


Last Chance to Purchase Drug-Free Kids Calendars
March Meeting Registration Opens Friday
Scholarship Application Opens Jan. 31
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Congress


Advocates Continue to Push Affordable Housing Priorities
Affordable Housing Finance (01/14/22)

Affordable housing advocates are exploring different options to move forward key provisions of the stalled Build Back Better (BBB) bill. Hopes of passing the sweeping proposal faded late last year when Sen. Joe Manchin (D-W.Va.) said he would not support the bill, which included increases to the annual 9 percent Low-Income Housing Tax Credit (LIHTC) allocation, a reduction of the 50 percent bond financing threshold test to 25 percent, and other significant changes. While the legislation never had a target date, the continuing resolution expires on February 18. One of the big concerns is the reduction in the LIHTC allocation cap, which has fallen to $2.60 per capita this year now that a 12.5 percent cap increase has expired after being in place for four years. The drop in allocations means fewer affordable housing developments will be financed this year, especially with projects facing rising construction and labor costs. BBB calls for increasing the annual LIHTC cap for several more years along with other program improvements. There are still opportunities to expand affordable housing resources this year, according to housing advocates. In January, Democrats and Republicans restarted negotiations on the fiscal 2022 federal budget with the understanding that the continuing resolution expires the following month. Both sides have priorities they would like to see in the budget, which could mean an omnibus package that includes tax extenders or a separate tax package.
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Industry Trends


Critical Issues for Affordable Housing in 2022
Multi-Housing News (12/22/21) Marinescu, Adriana

After nearly two years of the pandemic, the United States now faces a shortage of 6.8 million rental homes affordable and available to low-income renters whose household incomes are at or below 30 percent of their area’s median income, according to a National Low-Income Housing Coalition analysis. No state has enough affordable housing supply for extremely low-income renters and the COVID-19 outbreak only exacerbated the already immense need for affordable homes throughout the country. Apart from various obstacles that make development difficult—such as rising land costs, labor shortages, and burdensome regulations—the affordable housing market also faces a bigger, fundamental problem that existed even before the pandemic: unbalanced figures between its submarkets, both in current inventory and supply. “We do not have a normal housing market: We have subsidized housing (not enough) for people with lower incomes, and expensive homes for those with higher incomes. Rents for moderate-income housing do not support high construction costs, so there will still be a shortfall in new production at moderate-income levels,” said Ken Lombard, CEO of BRIDGE Housing. For moderate-income households, more subsidy programs would be a quick fix. “This could be development subsidy modeled on LIHTC or it could be direct subsidy to households, such as renter credits and/or housing vouchers,” Lombard added. Industry officials agree that demand will continue to outpace supply in 2022 and beyond, and on the development side, they expect an increased focus on energy efficiency and environmental sustainability. Sales activity is also anticipated to heat up.
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Short Term Rentals Are an Opportunity for Some, but Are Impacting Affordable Housing
NPR (01/13/22) Siegler, Kirk

Short-term rentals are reducing the availability of affordable housing in expanding western towns, while also presenting economic opportunity for people trying to scrape by. Boise, Idaho, is trying to regulate short-term rentals, but a newly-unveiled ordinance from Mayor Lauren McLean would require all such rentals to obtain an annual license from the city and carry insurance, which is unlikely to affect affordable housing. Boise and other mid-size western cities have capped the number of short-term rentals operating in popular neighborhoods, while others have tried, and mostly failed, to prohibit them outright. Some residents have come to depend on income from renting, and economist Megan Lawson at the Headwaters Economics think tank said such income "offers them an opportunity to continue to afford to live in these places" amid a rising cost of living.
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State and Local Activities


Boston Ends Parking Minimums for Affordable Housing
Affordable Housing Finance (01/10/22) Kimura, Donna

Boston Mayor Michelle Wu has signed an amendment to eliminate parking minimums for affordable housing developments in an effort to spur new housing to make it easier to live and stay in the city. The move ends parking minimums for residential developments where at least 60 percent of the units are income-restricted at 100 percent of the area median income (AMI) or below. The zoning change will not eliminate all parking at qualified residential projects but will allow each individual project to determine the amount of off-street parking necessary based on the needs of the project's residents, rather than the existing, outdated formula. “The need to build affordable housing in Boston has never been more vital, with half of Boston's renters being rent-burdened,” said Boston City Council president pro tempore Matt O’Malley. “Eliminating parking minimums is an impactful and commonsense policy solution that can provide transformative relief for affordable housing builders.” On-site parking requirements often add significant costs to affordable housing developments across the country, requiring developers to build parking as part of their developments even though many residents, especially those in permanent supportive housing and seniors housing, do not own cars. Boston’s move will help make the development of affordable housing faster and more cost effective, says Bart Mitchell, president and CEO of The Community Builders (TCB), a leading nonprofit affordable housing provider.
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Illinois Property Tax Incentive Could Change the Game For Affordable Housing Development
Bisnow (01/19/22) Rogal, Brian

Chicago's local development community has long worried about the specter of higher property taxes and the city's more stringent requirements to include additional affordable housing units in new multifamily projects. But last year’s Affordable Housing Omnibus Bill, signed into law in August, created a property tax relief program that could calm both fears while serving as a model for getting affordable housing built. Developers and landlords of all sizes, who do work in all kinds of communities will now be able to get their assessed values reduced and limit the amount of property taxes owed if they reserve a set percentage of units for affordable housing after rehabbing or constructing a new building. The law took effect Jan. 1. Developers that had been reluctant to build in the city say it could be a game-changer. “[This] is groundbreaking legislation that will fundamentally change the way developers approach affordable housing in this state,” said Related Midwest President Curt Bailey. “It creates affordability in areas where none previously existed and leads to higher quality housing.” To qualify for the program's first tier, 35 percent of units must be reserved for affordable housing, meaning they are rented to tenants at 60 percent or less of the area median income, as well as investing at least $12.50 per square feet into the building. In return, these owners will get a 35 percent reduction of their buildings’ assessed values for up to 30 years. This will likely work best in low-income neighborhoods where the rents are already low, making it easy for landlords to hit this benchmark.
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Rhode Island Failed to Use More Than $1 Billion for Affordable Housing, State Senator Says
Providence Journal (12/23/21) Farzan, Antonia Noori

Rhode Island has failed to take advantage of more than $1.3 billion in federal funding that could have been used to construct affordable housing, according to a new report released by state Sen. Samuel Bell (D-Providence). Bell and his staff compiled the report using data from Rhode Island Housing, the Public Finance Management Board and the federal government. According to their analysis, Rhode Island missed out on an average of $197.3 million a year between 2014 and 2020. The millions in untapped funds are available through 4 percent tax credits under the federal Low-Income Housing Tax Credit (LIHTC) program. Between 2014 and 2020, Rhode Island was eligible for more than $1.5 billion in funds from the LIHTC program, according to the report. The state only spent $171.4 million, which primarily went to maintaining the existing supply of affordable housing. The federal funds were used to finance just four new affordable-housing projects during that time period. One problem is that the 4 percent credits alone aren't enough of an incentive for developers, since they typically subsidize only about 38 percent of construction costs. Bell says that to take advantage of the funding that's available from the federal government, the state will have to chip in, too. Rhode Island already has several programs aimed at funding the construction of affordable housing; Bell suggests those subsidies be exclusively devoted to projects that will also qualify for the federal funds, allowing the state to maximize its investment.
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Green Building


Massachusetts Startup Sees Path to More Efficient Windows With New Material
Energy News Network (01/13/22) Shemkus, Sarah

A new material by Massachusetts-based startup AeroShield may help boost the affordability of super-efficient windows. When sandwiched between two panes of glass, the lightweight aerogel generates windows that are more insulating than heavier and costlier products. Early research found windows incorporating this material could slash residential heating and cooling costs by 20 percent. AeroShield co-founder Elise Strobach said her team engineered nanoparticles of glass and interstitial pores that are smaller than the wavelength of visible light, so that light does not interact with the material in the final product. The company has also developed a process for manufacturing intact sheets of the material in the industry-standard size of 20 inches by 14 inches. Strobach expects her company will partner with manufacturers of glass panes for windows, rather than with the companies that build full windows. The first prototypes could be installed in demonstration projects by the end of this year, and products could enter the wider market next year or the following year.
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Association News


Last Chance to Purchase Drug-Free Kids Calendars

There are still a few National Affordable Housing Management Association (NAHMA) 2022 Drug-Free Kids Calendars left. This is your last chance to own a one-of-a-kind artwork calendar created by talented residents.
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.
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March Meeting Registration Opens Friday

One of the best ways to stay up on the latest in the affordable housing industry is by attending NAHMA’s Biannual Top Issues in Affordable Housing winter conference, March 9-11, in Washington, D.C. The three-day winter meeting features policy-focused sessions, networking opportunities, Industry Awards and the Communities of Quality (COQ) Awards luncheon.
Attendance gives you a chance to hear the latest news from the Department of Housing and Urban Development, the U.S. Department of Agriculture’s Rural Development and more.
The meeting will be mandated to comply with the D.C. government coronavirus requirements for large gatherings.
Registration for the meeting opens Friday, Jan. 21.
For more information, click on the Web Link provided below.
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Scholarship Application Opens Jan. 31

The NAHMA Educational Foundation will kick off the scholarship season by releasing the 2021 scholarship application on Jan. 31, 2022. This will be the 16th consecutive year that the foundation will be making scholarships available to worthy student residents.
In 2021, the foundation awarded 87 scholarships worth a total of $304,500.
Applicants can access the application by going to https://nahma.communityforce.com or by going to www.nahma.org and clicking on Educational Foundation under the About Us tab. The application is digital and must be filed online. The deadline for completed applications is May 12, at 10 p.m. Eastern time.
Eligibility for the program requires that an applicant be a resident in good standing at an AHMA- or NAHMA-affiliated apartment community and be either a high school senior with a minimum GPA of 2.5; or a high school equivalency diploma holder or matriculated college student with a minimum GPA of 2.3 at an accredited community college, college, university or trade/technical school. Applications from students in graduate-level programs are not accepted.
For more information about the foundation, 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 becoming a SHCM Company, click on the Web Link below.
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Upcoming Events

NAA Advocate
March 8-9
https://www.naahq.org/2022-advocate

NAHMA Biannual Top Issues in Affordable Housing Winter Conference
March 9-11
https://www.nahma.org/meetings/

NAA Apartmentalize
June 22-24
https://apartmentalize.naahq.org/

NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 26-28
https://www.nahma.org/meetings/

NAA Assembly of Delegates
November 15-17
https://www.naahq.org/meetings-events/upcoming-meetings
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January 2022