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HUD Releases FY 2016 Inflation Factors for HCV Funding Renewal
The Department of Housing and Urban Renewal (HUD) recently issued the inflation factors to adjust fiscal year 2016 renewal funding for the Housing Choice Voucher (HCV) Program of each public housing agency. The notice appears in the April 15 Federal Register. These inflation factors incorporate economic indices to measure the expected change in per unit costs for the HCV program. To view the tables, click the Web Link provided.
Tax Issues and Tax Reform
"Will House Tax Reform Task Force's Work Be Significant?"
Congress
"Cantwell Urges More Federal Resources for Affordable Housing"
State and Local Activities
"Tax Protection for Developers of Low-Income Housing Sails Through Committee"
"In Midst of Building Boom, Tampa Brainstorms Affordable Housing"
Green Building
"Efficiency, Solar and Storage Offer a Unique Opportunity to Bring Clean Energy to Affordable Housing"
Management and Compliance
"The Right (and Wrong) Ways to Comment on a QAP"
Industry Trends
"Key Guidelines for Developing Adaptive-Reuse Projects"
Association News
Free Housing Credit Webinar
Understanding the Renters LIHTC Program Serves
Deadline for Grants for Lead Paint Programs Approaches
Register Online for NAHMA’s June Meeting
NAA Conference Goes to San Francisco
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Tax Issues and Tax Reform
Will House Tax Reform Task Force's Work Be Significant?
Novogradac Journal of Tax Credits (04/16) Novogradac, Michael J.
Getting major legislation passed in a presidential election year can be challenging, largely due to an uncertain future. However, it is still important to position the legislation for the next administration. In February, the office of House Speaker Paul Ryan (R-Wis.) announced the creation of six Republican task forces, including one focusing on tax reform and another on poverty, opportunity, and upward mobility. The latter task force in late February released a series of seven goals that include helping people move from welfare to work and securing and strengthening social safety net programs. The task force also listed nine policy reforms, including several items aimed at combating fraud and waste and requiring programs to focus "on results, not inputs." A case can be made that the low-income housing tax credit (LIHTC) and new markets tax credit (NMTC) are two private sector-led tools that help secure affordable housing and economic opportunity for the poor and low-income families and communities. Also in November, 34 of the Senate's 100 seats will be contested, and all 435 House of Representatives seats are up for election. Ideas discussed by the task forces could form the basis of legislation in the future. For that reason alone, those in the tax credit community should remain alert and aware and make it clear that such credits are valuable.
Congress
Cantwell Urges More Federal Resources for Affordable Housing
Associated Press (03/24/16)
On March 24, U.S. Sen. Maria Cantwell (D-Wash.) joined mayors from across Puget Sound, calling for a 50 percent increase in the federal low-income housing tax credit (LIHTC). "We are going to push our colleagues to sign and support this legislation, and ultimately get it passed this year," she said. The mayors joined Cantwell at Patrick Place in Seattle, a 71-unit apartment building for former homeless men and women. The project by the Catholic Housing Services of Western Washington received $7 million in federal tax credits. Since the creation of the LIHTC program 30 years ago, the tax credits have helped build nearly 3 million housing units nationwide. About 75,400 units were built in Washington state. Everett Mayor Ray Stephanson said the city of Everett has been struggling with homelessness and other street issues for years, but it is now committed to increasing low-income housing units. "These tax credits are incredibly important," he said, noting that 2,900 housing units have been built in his community using such credits. Seattle Mayor Ed Murray said he declared an emergency on homelessness in Seattle last fall in part to request aid from the federal and state governments. He said the city has stepped up by passing housing levies, but that the federal tax credit used by nonprofit and private developers is still the largest resource for constructing low-income housing in Seattle.
State and Local Activities
Tax Protection for Developers of Low-Income Housing Sails Through Committee
New Orleans Times-Picayune (04/18/16) McClendon, Robert
The Louisiana Legislature's House Ways and Means Committee voted unanimously on April 18 to pass HB 610 on to the floor for debate with a favorable recommendation. The bill, sponsored by Lake Charles Republican Mark Abraham, would make it easier to develop low income housing. The bill would prohibit assessors from taking the tax credits into consideration when assessors evaluate properties, which diminishes their assessed values and, thus, their tax bills. Archie Jones of the Louisiana Association of Affordable Housing Providers said the bill was necessary to "bring calm to a scary and uncertain atmosphere that exists for affordable housing in the state." Developers who use low-income-housing tax credits to finance projects are required to cap rents for 15-30 years on any units built with funding obtained through the credits. Backers of the bill note that in most parishes, assessors take this reduced income stream into account when establishing the taxable value of a low-income development. In St. Tammany Parish, however, Assessor Louis Fitzmorris calculates the value based on the income the property could earn if it charged market rate rent. Orleans Parish Assessor Erroll Williams adds the value of the tax credits to the rent-controlled revenue.
In Midst of Building Boom, Tampa Brainstorms Affordable Housing
Tampa Tribune (FL) (03/24/16) O'Donnell, Christopher
A shortage of affordable housing in the Tampa, Fla., area prompted the Tampa Housing Authority and the city's Housing and Community Development department to meet with the Tampa City Council on March 24. Roughly 25,000 individuals and families are on the waiting list for public housing accommodation, according to the Tampa Housing Authority. The waiting list to get federally subsidized Section 8 voucher housing was closed in 2008 to avoid giving others "false hope." About 4,000 families and individuals remain on the list. And while wages for many are rising only slowly if at all, the average Tampa rent rose 5.3 percent in 2015 to an average of $995 per month, according to a Marcus & Millichap's Tampa Apartment Research Report. In Hillsborough County, about 28,000 households spend at least half their income on rent and utilities. Metro 510, a six-story residential tower, is one of the few examples of a private developer taking advantage of low-income housing tax credits from the state. With that money, developer Sage Partners was able to offer 120 loft apartments for rent at well below market rates. However, counties usually receive only one such award per year because lawmakers want to share the incentives statewide. Another obstacle to offering affordable housing is Tampa Bay's lack of mass-transit, which compels developers to build parking lots for all tenants, says Leroy Moore, chief operating officer of the Tampa Housing Authority.
Green Building
Efficiency, Solar and Storage Offer a Unique Opportunity to Bring Clean Energy to Affordable Housing
Greentech Media (03/23/16) Waite, Wayne; Milford, Lewis
Clean energy advocates working in the affordable housing sector say the next steps for cutting energy costs for low-income tenants will require integrated strategies that enable property owners to better manage energy demands and improve the financial outcomes of energy investments. Many analysts say that that energy storage will be a significant component of this future. In the last five years, solar PV costs have declined to the point that standalone solar PV systems can be financially feasible for affordable housing owners and at times more feasible than deeper energy-efficiency retrofits. The growing market for third-party ownership structures and improved access to solar investment funds have enabled turnkey financial options that leverage real estate depreciation tax benefits to provide financing without the need for upfront capital investments by the property owner. Under third-party-ownership arrangements, the value available to building owners and their tenants increases as the cost per kilowatt-hour decreases. Where solar incentives and tax benefits are fully leveraged to write down project costs, as in the case of LIHTC transactions, the economic benefits can be potentially larger, provided that the solar costs do not escalate after installation. Battery storage offers an important pathway for maintaining and enhancing the value proposition of energy investments like solar PV for all customers, but especially in affordable housing. When installed at multifamily affordable housing with solar PV, energy storage can capture solar savings and shelter system owners and/or tenants from changes in utility rate structures and cost fluctuations.
Management and Compliance
The Right (and Wrong) Ways to Comment on a QAP
Affordable Housing Finance (03/30/16) Shelburne, Mark
Qualified allocation plans (QAPs) typically involve debate, and differences of opinion are to be expected. One of the main channels for debate is through the submission of comments. All QAPs need to reflect a consensus of the state's industry participants, which is only possible through diverse, widespread, and actionable input. QAPs need to be specific, and the agency should not be assumed to share the same knowledge. Commenting before the first draft is particularly important for major departures, no later than 10 days after a formal period opens. Most agencies at least informally accept feedback year-round. Submissions should be made more than once, particularly when there are multiple drafts. It is important to note that all communications will be public, either by being posted to a website or a public records request, and an email is as good as a letter. Knowledge of the program is helpful, but not required. It is also important to pay attention to others' perspectives to make it easier to respond to their arguments. Examples and results are more convincing than opinions, and the use of "spin" should be avoided. QAPs can be like battleships: powerful tools that require time and space to change course. If the QAP does not initially resonate, the idea may simply be ahead of its time and need longer to evolve.
Industry Trends
Key Guidelines for Developing Adaptive-Reuse Projects
Affordable Housing Finance (04/07/16) Gomez, Todd
Adaptive-reuse projects involving vacant or underused real estate can be beneficial for both communities and developers. Potential real estate targets for adaptive-reuse include unoccupied schools, mills, office buildings, and factories in urban and suburban settings. When assessing a potential property for adaptive reuse, developers need to consider whether a mixed-income or 100 percent affordable project meets the needs of the local market. Adaptive-reuse projects are often eligible to receive low-income housing tax credits and grants from local, state, and federal policies. Bank of America Merrill Lynch recently provided $7 million in construction financing and $7 million in low-income housing and historic tax credit investments to help convert an abandoned high school into 48 affordable senior housing units in Augusta, Maine. In addition to understanding and applying the basic adaptive criteria outlined above, it is also important to team up with experienced partners, including legal counsel, tax advisers, and other professionals in evaluating and structuring such projects. Other key factors developers should consider include whether the housing will be geared toward specific generational cohorts, environmentally conscious residents, and/or job-specific interests like teachers and healthcare workers, and whether the property offers access to parking, transportation, and tenant amenities. Developers must be careful around environmental due diligence before embarking on a project.
Association News
Free Housing Credit Webinar
Learn about the trending issues in housing credit management without leaving your office. This free two-hour webinar takes place Wednesday, May 18, beginning at 2 p.m. Eastern time. Register for the free webinar by clicking the Web Link below.
The first 1.5 hours of the instructional portion will cover:
- How HUD’s final rule on streamlining administrative regulations affects your housing credit or blended site, presented by Heather Staggs, SHCM, president of S.T.A.R. Momentum.
- What’s new with the IRS, presented by Gwen Volk, SHCM, president, Gwen Volk Infocus Inc.
- Income limits and how to count family members on a blended property, presented by Dodi Gershen, SHCM, vice president and director of management, The Gershen Group.
- And more.
The final 30 minutes will be set aside for questions and answers. The webinar is free to current SHCM certified professionals and $75 for all others. Please be sure that you renewed your SHCM credential in 2015 in order to participate in this webinar free of charge.
If you have any questions about your renewal, contact Natasha Patterson of NAHMA at npatterson@nahma.org. For webinar registration issues, contact Shana Treger at NAAEI, shana@naahq.org or 703-797-0608.
Understanding the Renters LIHTC Program Serves
HUD issued a report on the demographic and economic data on renters living in Low-Income Housing Tax Credit (LITHC) units, “Understanding Whom the LIHTC Program Serves: Tenants in LIHTC Units as of December 31, 2012,” which uses data from state agencies administering the LIHTC. Congress mandated the collection and publication of this data when it passed the Housing and Economic Recovery Act of 2008.
The report provides information and summary tables about the income, race, ethnicity, family composition, age, rental assistance usage, disability status and rent burden of renters living in LIHTC properties as of the end of 2013. According to the document, 34,807 properties are reported as active in the LIHTC program. Approximately 48 percent of tenant households were extremely low-income, earning 30 percent or less of area median income (AMI), and 34 percent of households were very low-income, earning between 30 and 50 percent of AMI. More than half of renters—55.6 percent—paid 30 percent or less of their income towards rent. To read the full report, click the Web Link.
Deadline for Grants for Lead Paint Programs Approaches
There is still time to apply for more than $100 million in grants available to help eliminate dangerous lead-based paint hazards from the homes of lower income families from HUD. These grants are intended to protect young children from lead poisoning and provide an opportunity for states and local communities to establish programs to control health and safety hazards by assessing and remediating lead-based paint and other housing related health hazards. The deadline for applications is April 28.
The grants to states and local governments are being offered through HUD’s Lead-Based Paint Hazard Control Program totaling $43 million, and its Lead Hazard Reduction Demonstration Program, totaling $45 million. In these grant programs, HUD is providing nearly $13 million in healthy homes supplemental funds to promote identify and remediate additional housing-related health hazards in homes with lead-based paint hazards. For more information regarding grant process and how to apply, click the link provided below.
Register Online for NAHMA’s June Meeting
Preregister for the NAHMA June summer forum, scheduled for June 15 in San Francisco. The daylong event includes a keynote luncheon, Vanguard Awards ceremony, and NAHMA Educational Foundation dinner and fundraiser. The forum is held in conjunction with the NAA annual Conference and Exposition, June 16-18, and requires separate registration. The NAHMA forum focuses on public policy and takes place at Parc 55 San Francisco, a Hilton Hotel. A preliminary agenda with highlights of the NAHMA meeting and the sessions NAHMA will be presenting at the NAA conference is on the Meetings webpage at www.nahma.org. To register, click the Web Link below.
NAA Conference Goes to San Francisco
The 2016 NAA Education Conference & Exposition will be held in San Francisco, June 16-18, at the Moscone Convention Center. Join more than 9,200 apartment housing industry professionals in an exciting, collaborative environment. Gain inspiration and motivation from three general sessions featuring top-name keynote speakers, along with 65 education sessions. Discover the latest products and services at the NAA Exposition, with exhibits from more than 450 suppliers.
Click the Web Link below to register.
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The three 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), the National Apartment Association Education Institute (NAAEI), and LeadingAge.
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
NAHMA Public Policies Forum
June 15, 2016
More
NAA Education Conference & Exposition
June 15-18, 2016
More
NAHMA Regulatory Issues Meeting
October 23-25, 2016
More
LeadingAge Annual Meeting & EXPO
October 30-November 2, 2016
More
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