SHCM: Key Housing Credit Compliance Issues Webinar
MyCAA Provides Apartment Education Assistance
SHCM Exam Preparation
NAHMA Offers Green Housing Management Publication
"Key Rural Development Program on the Chopping Block"
"NYC Housing Program Funds Stalled Apartments"
"Advancements in Utility Cost Recovery"
"House Introduces Bond Extension and Tax Bill"
"GOP Has Own Fannie-Freddie Plan"
"Section 8 Tenants: The Housing Market's Salvation?"
"The Value of Structured Maintenance Training"
"Deficit-Reduction Efforts May Target Housing Tax Incentives"
"West Des Moines Re-Evaluates Low-Income Housing Policy"
"Freddie Mac Multifamily Funding Surged in Second Half of 2010"
"Apartment Industry Announces Improved Renters' Insurance Data Transfer Standard"
"Property Compliance News Briefs: Arizona Department of Housing"
"Recession Takes Severe Toll on Low-Income Renters"
"How to Make Rentals More Attractive as the American Dream Evolves, Adapts"
"Apartment Owners React Cautiously to Proposed GSE Reform"
"U.S. Housing Starts Rise More Than Economists Forecast on Multifamily Jump"
"Apartment Groups Welcome Obama 'Better Buildings Initiative'"
"More People Choosing to Rent, Not Buy, Their Home"
"Bed Bug Summit: Solution to Infestations 'Not Rocket Science'"
"Property Compliance News Briefs: Florida Housing Finance Corporation"
SHCM: Key Housing Credit Compliance Issues Webinar
On April 14 at 2 pm eastern, NAAEI and NAHMA will host the SHCM Key Housing Credit Compliance Issues bi-annual Webinar. The Webinar will feature three experts including Grace Robertson from the IRS, Gianna Solari from Solari Enterprises, and Greg Proctor from the Windsor Group. The Webinar is free to SHCM professionals and $75 for non-SHCM professionals. To register for this Webinar, click on the link below.
MyCAA Provides Apartment Education Assistance
NAAEI was recently approved by the Department of Defense to participate in the Military Spouse Career Advancement Account (MyCAA) program. MyCAA helps military spouses pursue a license, certificate, certification or Associate’s Degree (excluding General Studies and Liberal Arts) necessary for gainful employment in a high-demand, high-growth, portable career field and occupation. MyCAA provides a maximum education benefit of $4,000 with an annual fiscal year cap of $2,000 to assist eligible military spouses in acquiring a professional credential needed to meet their Portable Career goal. NAAEI’s Certified Apartment Manager (CAM), National Apartment Leasing Professional (NALP) and Certificate for Apartment Maintenance Technicians (CAMT) programs are available through the MyCAA program. We are pleased to announce that the Specialist in Housing Credit Management (SHCM) program, sponsored by NAHMA, NAAEI and LeadingAge, will also be available. Click on the link below to learn more.
SHCM Exam Preparation
During the month of February, NAAEI and NAHMA hosted the Specialist in Housing Credit Management (SHCM) Certification blended learning class. The course, instructed by Gianna Solari and Greg Proctor, prepared 12 individuals to earn the SHCM Certification. Two others sat in on individual modules to earn continuing education. The classes were offered via Webinar every Thursday during the month of February and covered NAHMA's Practical Guide to Tax Credit Housing Management Workbook. NAAEI and NAHMA are considering offering this class again this summer as well as offering recordings of these webinars online. For updated information on all NAAEI online education programs, click on the link below.
NAHMA Offers Green Housing Management Publication
A new publication, Green Housing: A Practical Guide to Green Real Estate Management, is now available from the National Affordable Housing Management Association (NAHMA). The 82-page spiral-bound book is an informative yet easy-to-read primer on green real estate management, and covers all of the basic concepts, such as energy efficiency, indoor environmental quality, resource efficiency, site sustainability, water efficiency, integrated pest management, tenant green education, and creating a green operation and maintenance plan.
According to a recent report by the U.S. General Services Administration, green buildings have 13% lower maintenance costs and consume 26% less energy. Though there is a common perception that “going green” can be cost-prohibitive, property management professionals and building owners and developers are discovering that greening their properties is not only cost-effective but can be truly profitable. Green Housing, by real estate professional and certified green-building expert Barry P. Weaver, is a timely manual for those who have the desire but not a great deal of capital to accomplish green upgrades.
The book may be purchased for $35 per copy, plus $5 shipping and handling, via NAHMA’s webstore via the link below.
Key Rural Development Program on the Chopping Block
Affordable Housing Finance (03/11) Ascierto, Jerry
The Obama Administration's budget proposal for 2012 calls for the elimination of a key source of funding for rural multifamily developers. The USDA's Sec. 538 program--which guarantees loans for new construction, rehabilitation, and permanent financing in rural regions--is on the chopping block. The program is a lifeline for those developing in areas with populations of less than 20,000, where financing is significantly harder to obtain. Even the Federal Housing Administration (FHA) has little interest in such deals, especially since most Sec. 538 deals are so small--$1.2 million, on average--and in sparsely-populated areas. As justification for getting rid of the program, the Administration pointed to a very high Sec. 538 default rate of 11.7 percent; however, many industry experts say they do not understand how those numbers were determined.
NYC Housing Program Funds Stalled Apartments
Wall Street Journal (03/22/11)
New York City has started awarding affordable-housing grants under a program to relaunch projects that became stalled during the credit crisis. According to City Council Speaker Christine Quinn, the first building to be selected for the $20 million pilot Housing Asset Renewal Program started construction in Brooklyn's Prospect Lefferts Gardens area four years ago, but it was halted in 2008 when the developer fell behind on payments. The city is now paying $3 million to subsidize the construction. In return, the developers will reserve the building's 46 apartments for middle-income New Yorkers who will be selected through a lottery. Quinn remarked, "With the credit crunch leaving so many buildings empty and so many New Yorkers looking for an affordable place to live, it seemed natural to take those two problems and make them into a solution." Quinn first proposed the program in 2009.
Advancements in Utility Cost Recovery
Multi-Housing News (03/11) Schnitzer, Erika
Utility cost recovery is essential for boosting the profitability of housing properties. The ratio utility billing system (RUBS) has been a popular method for the apartment industry. A 2004 report titled "National Multiple Family Submetering and Allocation Billing Program Study" found that water usage in submetered apartments decreased 15.3 percent over non-submetered apartments, while residents billed via RUBS used the same or more water than those that had water included in their rent. This finding prompted the industry to advocate submetering, and states were encouraged to implement various conservation laws. Marc Treitler, general counsel and vice president of regulatory affairs at Conservice and a member of the board of the Utility Conservation Coalition, says the key benefit of submetering is being able to identify high users. Payback on the equipment generally takes between nine and 15 months, depending on the location and the related water expenses, according to Inovonics President Mark Jarman. Treitler adds that it is important to use tools to monitor vacant utility usage. E-Mon’s Web-Mon tool provides a carbon footprint analysis via a dashboard that displays kilowatt hours used and gives users a comparison to such things as number of miles driven or trees needed to absorb the carbon output.
Affordable Housing Finance (03/11) Ascierto, Jerry
Last year was a comeback year for many affordable housing lenders, as federal stimulus money helped drive new construction and equity pricing improved a little more with each passing month. Furthermore, a backlog from 2009 spilled over into 2010, and low interest rates drove a sizable refinancing market. Though a sense of optimism pervades the industry, it is tempered, as financiers wonder what effect the expiration of the Tax Credit Assistance Program (TCAP) will have on the affordable housing market. In expectation of TCAP's absence, questions are arising about the availability of soft debt. Still, the positivity has made the market more competitive for construction and permanent debt. Most of the lenders on the Top 25 list saw a marked improvement in 2010; most notable among them was Citi Community Capital, which improved from $551 million in 2009 to nearly $3 billion in 2010. Aggressive competition among lenders is good news for borrowers, especially on the construction debt front. As banks grow more comfortable issuing construction debt, all-in rates slowly continue to fall, and as of early February, spreads on construction loans were in the mid-200 to low-300 basis point range. Additionally, consolidation within the banking industry has led top lenders into new markets. Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) will focus on preservation deals this year; Freddie Mac is winning many 10-year preservation deals, while Fannie Mae has a big advantage in the seven-year space. The FHA is also working on making its construction-to-perm product more user-friendly for tax credit deals, and the agency is hoping to take a step forward on new construction deals this year, though Fannie and Freddie remain stalled. Separately, the 4 percent market also improved in 2010, and financiers expect to see a similar pace of improvement this year. Investor appetite is expected to keep growing. For 2011, debt volumes are expected to continue to rise, though everything depends upon the health of the equity market.
House Introduces Bond Extension and Tax Bill
Accounting Today (03/10/11) Cohn, Michael
Democratic lawmakers on the House Ways and Means Committee have introduced a new bill intended to finance infrastructure investments to create jobs. H.R. 992, the Building American Jobs Act, includes a variety of bond and tax provisions. A Low-Income Housing Tax Credit (LIHTC) exchange program provision would extend the ability of states to receive a portion of their LIHTC allocation as a direct payment through 2011. "These proven programs are vital in our effort to rebuild America's infrastructure—and economy," says Ways and Means ranking Democratic member Sander Levin (D-Mich.). "There are still far too many states and municipalities … struggling to regain their footing after the Great Recession and this legislation gives them the tools to make long-needed investments."
GOP Has Own Fannie-Freddie Plan
Washington Post (03/29/11) P. A15 Goldfarb, Zachary A.
House Republicans will introduce a series of eight bills to scale back Fannie Mae and Freddie Mac's involvement in the housing market. These bills would expand the authority of the Federal Housing Finance Agency; subject employees of the mortgage giants to the federal payscale; boost fees charged to borrowers over two years; prevent them from entering new lending markets; require Treasury approval of all new debt issuance; eliminate their affordable-housing goals; reduce their portfolios to $250 billion in five years; and ensure they are not exempt from rules that require mortgage lenders to retain a financial interest in their loans. Observers note that the GOP plan is similar to the Obama administration's but quickens the process of winding down the GSEs, a move that the administration worries could destabilize the housing market.
Section 8 Tenants: The Housing Market's Salvation?
WalletPop (03/21/11) Brenoff, Ann
In what may be one of the odder byproducts of the housing market crisis, Section 8 housing tenants are moving out of urban housing developments and into high-end condo complexes. The reason, industry analysts say, is that apartment managers are relieved to have a steady rent check and a tenant whose rent is not contingent upon avoiding unemployment. With the economy still down and unemployment levels still high, subsidized housing tenants are being courted by apartment managers. In housing markets hit hardest by foreclosures, like Florida and Nevada, homeowners and banks have become reluctant landlords. Unable to sell their properties, they turn them into rental units and quickly learn that Section 8 voucher holders are the closest thing to a guaranteed rent check.
The Value of Structured Maintenance Training
Multi-Housing News (03/11) Foong, Keat
In terms of educating apartment staff, relying on informal hands-on training can result in the conveyance of incomplete or incorrect information. Unfortunately, in today's average apartment community, the only education maintenance technicians receive is on-the-job, watch-and-copy instruction from other technicians. Due to high turnover among maintenance technicians, many apartment owners are hesitant to send their maintenance workers to structured classes. Another reason may be that apartment managers think they are unable to afford to lose their valued technicians to a few hours or days of classroom instruction. Pablo Paz, national maintenance safety instructor for the Certificate for Apartment Maintenance Technicians program of the National Apartment Association Education Institute, has more than 20 years of prior apartment maintenance and six years of maintenance training experience. He points out that when the most effective and/or cost efficient techniques are not known, labor, time, and materials can be wasted. Paz says that one of the most important skills taught in maintenance classes may be diagnostics. The ability to quickly and correctly diagnose problems can make the world of difference in terms of time saved and customer satisfaction. Often, technicians spend a lot of time trying to figure out the cause of problems by trial and error, notes Paz. With the correct diagnostic skills, they can quickly make the repair and move on to the next project, with less chance for callbacks. There are a number of options for those apartment firms looking to send their maintenance personnel to classes, including local chapters of trade associations that provide maintenance technician programs.
Deficit-Reduction Efforts May Target Housing Tax Incentives
Affordable Housing Finance (02/11) Jacobs, Barry G.
Deficit-reduction initiatives could go after housing-related tax breaks ranging from the low-income housing tax credit to the home mortgage interest deduction if they gain momentum. A proposal for about $4 trillion in reductions by 2020 that includes the removal of most tax expenditures, including the housing tax credit, has been drafted by deficit reduction commission co-chairmen Erskine Bowles and Alan Simpson. The housing tax credit could be in greater danger of elimination precisely because no mention of it is given in the Bowles-Simpson report. Consequently, in the event of a concerted effort to remove most or all tax expenditures as part of a broad deficit reduction plan, affordable housing proponents may have difficulty lobbying for special treatment for the housing credit. Bowles and Simpson did, however, acknowledge the special status of the mortgage interest deduction, offering an option that would lower -- but not phase out -- the tax incentive for homeowners. The current climate does not favor adoption of the Bowles-Simpson plan, and Bowles and Simpson failed to obtain the 14 votes required from the 18-member commission that would have mandated action on the proposal. Still, they managed to acquire 11 votes from both Democrat and Republican representatives; and President Obama also has pledged to present a serious deficit-cutting program.
West Des Moines Re-Evaluates Low-Income Housing Policy
Des Moines Register (IA) (03/09/11)
In Iowa, requests for Des Moines' support from two builders seeking to use the state's low-income housing tax credits to finance West Des Moines apartment communities have spurred the city council to re-evaluate its policy for endorsing such projects. In both cases, the city declined to submit letters of support for the builders -- Conlin Properties of Des Moines and Equal Development of Carmel, Ind. Recently, though, council members announced they will consider new criteria for weighing the merits of future tax credit projects. As of now, only housing developments for senior citizens receive city approval. Council member Charles Schneider confirmed, "This is a new issue for us. It deviates from our current policy."
Freddie Mac Multifamily Funding Surged in Second Half of 2010
Housing Wire (02/03/11) Ricciardi, Christine
Freddie Mac funded $15 billion in multifamily transactions in 2010, marking a decline from $17 billion the prior year. Market volume picked up in the third and fourth quarters, with half of annual volume funded in the fourth quarter, according to Mike May, executive vice president of multifamily at Freddie Mac. Refinancings and acquisitions accounted for 69 percent and 28 percent of settlements, respectively. Freddie Mac's capital markets execution program accounted for 70 percent, or $10.5 billion, of multifamily volume, surging 128 percent from $4.6 billion in 2009. Under the Treasury's new issue bond program, Freddie Mac distributed $500 million in multifamily band credit enhancements and, through its early rate-lock option, it distributed $3.5 billion. Additionally, it bought $800 million in student housing mortgages, contributing to stabilization in the multifamily sector last year.
Apartment Industry Announces Improved Renters' Insurance Data Transfer Standard
Renters' Insurance 4.0, a new data standard issued by the Multifamily Information and Transactions Standards (MITS) initiative, sponsored by the National Multi Housing Council (NMHC), will facilitate data sharing between property management software and software used by companies providing renters' insurance. The standard can be accessed at no cost at www.MITSProject.org. According to David Cardwell, vice president of technology for NMHC, "This latest data transfer standard is part of our ongoing effort to improve the leasing process for renters and help apartment firms automate more of their operations."
Property Compliance News Briefs: Arizona Department of Housing
Novogradac Journal of Tax Credits (03/11)
The Arizona Department of Housing (ADOH) reports that property managers and owners must submit reports of continued low-income housing tax credit (LIHTC) compliance in hard copy and electronically for the 2010 calendar year. ADOH created the LIHTC Annual Report Workbook in an Excel format in a move toward an automated system and to comply with federal reporting requirement changes. The agency has also added a new section for mixed-income properties called the special commitments report. The entire workbook must be downloaded, completed, and submitted to ADOH in hard copy and on a compact disc.
Recession Takes Severe Toll on Low-Income Renters
McClatchy Newspapers (02/01/11) Pugh, Tony
A new HUD report has found that in 2009, roughly 4.4 million very-low-income renters, or those who earn less than half of their area's median income, received rental assistance from HUD in the form of public housing and Section 8 rental vouchers. The number represents just 25 percent of eligible people, according to Raphael Bostic, HUD's assistant secretary for policy development. In many cities, individuals need to wait years before they can receive housing assistance due to backlogs of applications. "The resources available don't match the prevailing need," Bostic said. The report also found that affordable rentals were hardest to find in the West, where only 53 were available for every 100 very-low-income households, compared to 65 per 100 in the South and 66 per 100 in the Northeast. The highest ratio was in the Midwest, where there were 87 affordable units available per 100 needy households. The report also revealed that the number of low-income households with "worst-case housing needs" increased by nearly 1.2 million, or 20 percent, from 2007 to 2009. "Worst-case housing needs" describe very-low-income renters who do not receive government housing assistance and live in substandard homes or use more than half of their income to pay rent. The National Low Income Housing Coalition is calling for the doubling of Section 8 rental vouchers to 4 million over the next 10 years.
How to Make Rentals More Attractive as the American Dream Evolves, Adapts
Washington Post (02/25/11) Lewis, Roger K.
Architect and University of Maryland Professor Emeritus of Architecture Roger Lewis says the economic recession, high unemployment rates, declines in house prices, and stricter lending standards have boosted demand for rentals. He calls the shift away from homeownership "the manifestation of a common-sense, rational concept disregarded during the housing bubble years." Lewis notes that for some people, "Renting will be the economically prudent and necessary choice. Yet it can be a desirable choice." Lewis says rentals in favorable locations with transportation options and easy access to good jobs, schools, shopping, and other amenities will be favored by renters. Other factors that will make rentals more desirable include increased space to accommodate families with children; well-designed kitchens and bathrooms, attractive landscaping, and other top-quality features; shared amenities like parking, gardens, playgrounds, spas, and exercise rooms; and affordable rents.
Apartment Owners React Cautiously to Proposed GSE Reform
CoStar Group (02/16/11) Drummer, Randyl
The good news for the apartment sector is that the Obama administration, in a plan presented by U.S. Treasury Secretary Timothy F. Geithner earlier in February, appears to offer unprecedented support for rental housing, a departure from previous administrations. Doing away with the profitable apartment business of Fannie and Freddie along with the dysfunctional residential mortgage programs would be a mistake, apartment advocates assert. "Reform is absolutely necessary to address the serious flaws in the single-family sector. But as the administration recognizes, policymakers need to understand that the GSEs' multifamily programs were not part of the meltdown, and they are a vital capital source for the rental housing sector," NMHC said in a statement. "We are encouraged that the Obama Administration explicitly notes the need to support rental housing and to return to a housing framework that understands that not every American wants to, or should, own a house," NMHC President Doug Bibby said. Bibby urged legislators to proceed with caution and to avoid putting rental housing at risk of turning into a "collateral victim of the single-family meltdown." "Quite simply, the GSEs' multifamily programs are not broken," Bibby stated. Bibby said the apartment industry is ready to pay for a continued federal guarantee, priced so it does not compete unfairly against private debt capital.
U.S. Housing Starts Rise More Than Economists Forecast on Multifamily Jump
Bloomberg (02/16/11) Kowalski, Alex
A spike in multifamily construction helped push housing starts up 15 percent in January to an annualized rate of 596,000, higher than the forecasted 539,000. While there was a 1 percent drop in single-family home construction, work started on 78 percent more structures with two or more units—the highest rate since February 2009. Home builders are struggling with excess inventory and experts say sales will stay depressed this year but potentially rise near the end of the year on lower prices and borrowing costs. But some industry experts say affordability is much less a problem than unemployment and general consumer fears about the economy.
Apartment Groups Welcome Obama 'Better Buildings Initiative'
Bradenton Herald (FL) (02/03/11)
The National Apartment Association (NAA) and the National Multi Housing Council (NMHC) on February 3 released a joint statement concerning the Better Buildings Initiative announced by President Obama. The statement was issued by Eileen Lee, NAA/NMHC's Vice President of Energy and Environment. It read: "We commend the Obama Administration for its focus on energy efficiency in commercial properties, including apartments, and for taking an incentive-based approach to achieving meaningful reductions in our building energy usage. Energy consumption and energy policy are priority issues for the apartment sector." The plan includes a number of items long advocated by both organizations, most notably reforming the existing building efficiency tax incentives. Lee added, "Changing the deduction to a more generous tax credit and creating more incentives for owners to undertake costly retrofits on existing properties are welcome changes. The President's plan would also wisely ensure that real estate investment trusts (REITs) can take advantage of the credit."
More People Choosing to Rent, Not Buy, Their Home
MarketWatch (02/08/11) Hoak, Amy
U.S. Census Bureau data show a drop in the nation's homeownership rate to 66.5 percent in 2010 from 67.2 percent in 2009 and 69 percent in 2005. While concerns about additional declines in house prices, uncertainty in the job market, and tighter credit standards have been attributed to the increase in renters, experts say the number of renters may be rising because more people are making purchase decisions based on their personal finances rather than the anticipated return on investment. MPF Research says a surge in rental demand will translate into a 5.1 percent average hike in rents this year. "Demand came out really, really strong and much stronger than the jobs market would have suggested," says Greg Willett, vice president of research at MPF. He says one apartment was absorbed for every three to four new jobs last year, versus one apartment per every six or seven jobs historically. According to National Multi Housing Council Chief Economist Mark Obrinsky, "Rising apartment demand reflects a drop in demand for homeownership in today's marketplace. This growing demand against the backdrop of the lowest apartment starts in 40 years -- barely enough to offset the units lost to demolition and obsolescence -- will result in further tightening in the apartment sector in the near term."
Bed Bug Summit: Solution to Infestations 'Not Rocket Science'
Christian Science Monitor (MA) (02/01/11) Trumbull, Mark
At the U.S. Environmental Protection Agency's National Bed Bug Summit on Feb. 1, officials called for a coordinated national response. Experts emphasized the importance of integrated pest management, which could control the bed bug problem by educating to prevent infestations, detecting problems early, and formulating the appropriate response. Given that bed bugs increasingly are resistant to pesticides, chemicals alone are not a solution. Hosted by the EPA, the summit featured pest-control experts who emphasized the importance of regular building inspections, public education campaigns, and well-designed treatment plans that involve a mix of chemicals, heat treatments, and low-tech solutions, such as machine drying laundry.
Property Compliance News Briefs: Florida Housing Finance Corporation
Novogradac Journal of Tax Credits (03/11)
For purposes of low-income housing tax credit (LIHTC) asset management, the Florida Housing Finance Corporation is now defining a student as an individual who is a full-time attendee of an educational organization that maintains a regular facility and curriculum and has a regularly enrolled student body in attendance at the location where it conducts its educational activities. The student must attend the facility for at least five months during a calendar year. The official out-of-compliance date for a full-time student household is the first day of the fifth month in a calendar year in which students attended school full-time. Florida Housing says there will be no reportable noncompliance if the full-time student household moves out before the last day of the fifth month.
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