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HUD Releases New Management Fee Add-On and Special Fees for Homeless Preference


The Department of Housing and Urban Development (HUD)’s Office of Multifamily Housing announced on Oct. 26 the availability of a new management fee add-on and special fee to assist in implementing a homeless preference. A special management fee will be permitted during a nine-month start-up period to enable owners/agents to create and implement the homeless preference process. The special fee amount is $2.50 per unit per month (PUPM). Once the homeless preference is in place, management agents may collect a monthly add-on fee as long as at least one previously homeless individual or household is admitted to a particular property during a one-year period. The add-on fee is $2 PUPM. The memo can be found by clicking on the Web Link provided below.
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Industry Trends


"The Outlook Is Positive for Affordable Housing"
"New CoStar Data Reveal a Vast National Inventory of Naturally Occurring Affordable Housing—and an Untapped Opportunity"

Tax Issues and Tax Reform


"Industry Leaders Weigh In on Trump Victory"
"Washington Wire: Common-Sense Suggestions to Increase PAB Cap Use for Affordable Housing"

Congress


"Debate Brews Over Middle-Income Housing Tax Credit"

State and Local Activities


"Voters Rally for Affordable Housing at the Polls"

Green Building


"Google Launches App for Environmentally-Friendly Building"

Association News


Register for Free CEU Webinar
Order Copies of NAA Educational Sessions
Purchase a One-Of-A-Kind Gift
Webinar Wednesdays Continue
Own Multifamily Housing: The Essential Industry Text
NAHMA Releases 2016 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Industry Trends


The Outlook Is Positive for Affordable Housing
National Real Estate Investor (11/03/16) Ahmed, Shan; Denham, Barbara Byrne

The Low-Income Housing Tax Credit (LIHTC) market currently accounts for about 90 percent of all affordable housing built in the United States. LIHTC properties tend to maintain high levels of occupancy and a foreclosure rate of less than 1.0 percent, and participation often allows banks to meet Community Reinvestment Act requirements. To ensure profit margins, an investor could directly subsidize the development cost of an LIHTC property and in return receive income tax credits for 10 years. The investor will agree to the LIHTC investment as long as the present value of the tax benefits exceeds the initial investment. Many investments are priced using internal rate of return (IRR), and each investor may have a different acceptable rate of return guided by the market environment, specific investment characteristics, and cost of capital. Potential benefits to investors include claiming depreciation and project deduction against other income and receiving tenant-based Section 8 benefits via the local public housing authority, which enables the landlord to charge a higher rent than the acceptable LIHTC rent. However, states monitor projects to ensure they meet income and eligibility requirements, and owners of LIHTC properties are required to document tenants' eligibility and report property compliance at least annually. Although the credits are generated for 10 years, the property must remain in compliance for 15 years. The affordable housing sector should remain profitable for both developers and investors for years to come.
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New CoStar Data Reveal a Vast National Inventory of Naturally Occurring Affordable Housing—and an Untapped Opportunity
Urban Land (10/16) Pyati, Archana

New data from CoStar estimates there are at least 5.5 million rental units of naturally occurring affordable housing (NOAH) across cities nationwide. One barrier to broader institutional investment in NOAH properties has been the lack of data on and insight into this asset class. Through granular data, CoStar researchers Shaw Lupton and Ethan Vaisman portray one- and two-star properties as both affordable across a wide range of metro areas and constituting a singular market opportunity mainly due to supply constraints and very low vacancy rates. "Thirty years ago, when the low-income housing tax credit was created, nobody thought of subsidized housing as a real estate asset class, but now they do," observes Buzz Roberts, president and chief executive officer of the National Association of Affordable Housing Lenders. Several firms in the marketplace have taken steps to preserve the nation's NOAH stock through innovative capital strategies. Avanath Capital Management, for instance, purchases assets in high-job-growth areas where incomes are rising and cross markets tax-credit properties adjacent to NOAH properties the firm owns, says John Williams, president and chief investment officer. Enterprise Community Investment recently closed on a $35 million conventional equity fund that has preserved 13 properties across the United States that serve a range of incomes. Enterprise acts as a limited partner, jointly investing in properties expected to generate returns of 9 percent at the end of the fund's life—typically eight to 10 years, according to Chris Herrmann, vice president, syndication.
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Tax Issues and Tax Reform


Industry Leaders Weigh In on Trump Victory
Affordable Housing Finance (11/09/16) Kimura, Donna

President-elect Donald Trump did not address affordable housing during the election race, so industry observers can only speculate about what he will do once he is in the White House. "With a President-elect Trump and a Republican Congress, I expect comprehensive tax reform to be one of the highest priorities for the new administration," says Michael Novogradac, managing partner of Novogradac & Co. "Republicans could decide to push for lasting, bipartisan tax reform and work with congressional Democrats, or they could decide to push for partisan tax reform through budget reconciliation, which would facilitate passage in the Senate. In the latter scenario, the Low-income housing tax credits (LIHTCs) and New Markets Tax Credits (NMTCs) would be at risk." Although LIHTCs and NMTCs are not specifically mentioned in the blueprint released by House Republicans earlier this year, the plan is critical of special-interest deductions and credits. It says "this Blueprint generally will eliminate special-interest deductions and credits in favor of providing lower tax rates for all businesses and eliminating taxes on business investment." Some in the industry remain hopeful that their cause will remain strong. "There is no doubt that the affordable industry can move forward with increasing the supply of funding for housing regardless of the election results," says Bob Moss, principal and national director of governmental affairs at CohnReznick. “Perhaps this historic event will galvanize the various voices in our industry into a singular voice to tell our story more effectively."
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Washington Wire: Common-Sense Suggestions to Increase PAB Cap Use for Affordable Housing
Novogradac Journal of Tax Credits (11/16) Vol. 07, No. 11 Novogradac, Michael

Studies show that there are only 31 affordable apartments available for every 100 extremely low-income households, while more than 11 million households pay more than 50 percent of their gross income on rent nationwide. Despite this need for rental housing, $65 billion in available private-activity tax-exempt bond (PAB) cap was not used in 2015, and only $54.5 billion was carried forward to this year. The Council of Development Finance Agencies says 13 states did not issue any of their PAB cap to affordable rental housing, while 15 used enough to retain their entire cap. Changes to increase PAB utilization would require federal legislation, such as instituting a permanent floor for 4 percent Low-Income Housing Tax Credits (LIHTCs). By making 4 percent LIHTC (and PAB) financing more attractive, bond use would rise. Legislation now before Congress has a provision to empower states to extend that potential basis boost to bond transactions to make more bond-financed developments financially feasible. For instance, expanding the list of cap-exempt facilities, such as airports and docks, would allow states to allocate more of their PAB cap to residential rental housing. It would be beneficial to change the tax code so that more types of facilities are exempt from the PAB volume cap. States could make such changes as using bonds exclusively for affordable rental housing until demand in a calendar year has been met; recycling the volume cap and use those bonds for other uses, since PAB developments paired with 4 percent LIHTCs create a benefit that does not exist for other uses of the bonds; and limiting PAB awards to eligible developments to maximize housing production.
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Congress


Debate Brews Over Middle-Income Housing Tax Credit
Affordable Housing Finance (11/08/16) Kimura, Donna

A recently proposed middle-income housing tax credit (MIHTC) is expected to be debated in coming months. Sen. Ron Wyden (D-Ore.) has introduced legislation to create a new MIHTC program intended to complement the long-standing and successful Low-income housing tax credit (LIHTC) program. The proposed MIHTC would serve residents who earn more than those who qualify for the LIHTC, which applies to those earning no more than 60 percent of the area median income (AMI). The MIHTC plan calls for at least 60 percent of a development's units to be rented to individuals with incomes less than or equal to 100 percent of the AMI. To ensure that the MIHTC would not detract from investment in low-income housing, a state's unused MIHTC dollars would be returned to the existing pool of funding for LIHTCs under the initial proposal. Reactions to the MIHTC plan have been mixed. The National Low Income Housing Coalition has expressed opposition to the plan, saying federal resources should be targeted to those with the greatest needs, noting that 75 percent of extremely low-income households are severely cost burdened, compared with 2 percent of median-income renters. Others also raise the idea of just expanding the LIHTC program. To that end, legislation has been proposed for "income-averaging" LIHTC properties, which would allow some apartments to serve residents up to 80 percent of the AMI as long as all of the units averaged out to 60 percent of the AMI.
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State and Local Activities


Voters Rally for Affordable Housing at the Polls
Apartment Finance Today (11/09/16) Serlin, Christine

Several communities around the nation saw victories for affordable housing in the November 8 elections. Oakland, Calif., voters approved a $600 million bond measure to improve city streets, add more affordable housing, and upgrade some community facilities; $100 million of it will be earmarked for affordable housing. In San Francisco, voters were in favor of Proposition C, which would allow the city to repurpose general obligation bond funds, which had been approved in 1992 for seismic upgrades, for the acquisition and rehab of multifamily housing that will be made permanently affordable. A $950 million affordable housing bond measure—comprised of $700 million for affordable housing, $100 million for affordable housing for low-income families, and $150 million for affordable housing and programs for working families—passed in Santa Clara County. San Diego voters were in favor of Measure M to construct additional affordable rental housing by lifting the city’s cap of subsidized housing units. Voters in Portland, Ore., also approved a $258.4 million bond measure, which will help build or preserve 1,300 rental units. In Maryland, a proposal to amend the Baltimore city charter to set up an affordable housing trust fund that would support and promote fair and affordable housing also was approved. The proposal did not specify how the trust fund would be funded. In North Carolina, a $25 million general obligation bond for affordable housing development passed in Asheville as did a $25 million housing bond in Greensboro, which will include the provision of $8 million in grants and loans to build low-income housing.
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Green Building


Google Launches App for Environmentally-Friendly Building
Proud Green Building (10/17/16)

Google plans to collect and analyze data to help companies cut their environmental footprints and make it all available to the public through a new application. Google's Portico, the Healthy Materials Tool, gathers data on the composition and environmental impact of building materials. The app will facilitate easy data access for companies targeting LEED certifications or other green building credentials and help them understand the material properties and potential effect on human health of building materials. The goal of the plan is to enable businesses to use more sustainable materials and trim greenhouse gas emissions. “When we think about the Third Industrial Revolution and the role Google played in it, we also think about the Fourth Industrial Revolution where this digital backbone could transform our relationship to the material world,” says Google sustainability officer Kate Brandt. “We would like to be a player.” Google currently is the world's biggest corporate renewable energy buyer, not including utilities. The company has massively reduced energy consumption at its data centers, signed 2.5 gigawatts worth of contracts worldwide in wind and solar energy, and committed to invest $2.5 billion in renewable energy.
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Association News


Register for Free CEU Webinar

The "You Do Not Need a Housing Credit Crystal Ball to Predict the Future!" webinar takes place Wednesday, Dec. 7, at 2 p.m. EST. Participation is free for current SHCM certification holders.
The topics covered include:
  • New and Pending Legislation presented by Heather Staggs, SHCM
  • VAWA Final Rule and New Guidance on Local Nuisance Ordinances presented by Gwen Volk, SHCM
  • Criminal Background Screening Update presented by Deborah Gershen, SHCM
The webinar provides 1.5 hours of instruction, which may be counted toward continuing education requirements, followed by a 30-minute question-and-answer session. It is $75 for non-SHCM professionals. Please, be sure that you renewed your SHCM credential in 2016. By renewing your SHCM in a timely fashion, you will receive the opportunity to participate in this webinar free of charge.
For renewal questions, contact Natasha Patterson of the National Affordable Housing Management Association (NAHMA) by emailing npatterson@nahma.org or calling 703-683-8630, ext. 117. For registration issues, contact Shana Treger of the National Apartment Association Education Institute (NAAEI) by emailing shana@naahq.org or by calling 703-797-0608.
To register for this course, click on the Web Link below.
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Order Copies of NAA Educational Sessions

Order your copy of more than 50 education sessions that were presented at the 2016 NAA Education Conference & Exposition in San Francisco. You may earn up to six continuing education credits toward your NAAEI credential renewal. Order today for $299.
NAHMA audio recordings will include the following sessions:
  • NAHMA Presents: A Year After SCOTUS—Latest Trends in Disparate Impact. Presented by Harry J. Kelly, Nixon Peabody LLP; and Michael W. Skojec, Ballard Spahr LLP
  • NAHMA Presents: Affordable Workforce Housing—Identifying the Need and Potential Solutions. Presented by Cynthia Parker, BRIDGE Housing; Angela Boyd, Enterprise Community Partners; and Elizabeth (Libby) Seifel, Seifel Consulting Inc.
  • NAHMA Presents: Key Federal Legislative and Regulatory Issues Impacting Affordable Multifamily Housing. Presented by Kris Cook, NAHMA; Greg Brown, NAA; and Tom Azumbrado, San Francisco Multifamily Hub, HUD
  • NAHMA Presents: Affordable Housing Preservation Options—Save It, Sell It, Buy It. Presented by Kasey Burke, Meta Housing Corporation; and Daniela Greville, McCormack Baron Salazar Inc.
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Purchase a One-Of-A-Kind Gift

Order the 2017 National Affordable Housing Management Association (NAHMA) Drug-Free Kids Calendar now by clicking on the Web Link below. Do not wait—the 2015 and 2016 editions sold out.
The calendars feature outstanding original artwork by children, seniors and adults with special needs living in affordable multifamily housing. This year’s contest also celebrated community spirit with its theme, Words That Heal: Stop Bullying, Spread Kindness.
The cost is $5.50 per calendar, which is a Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture allowable project expense.
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Webinar Wednesdays Continue

Join NAAEI, Apartment All Stars and Multifamily Insiders for Webinar Wednesdays, the largest premium webinar series in the industry to provide SHCM designates with access to industry thought leaders to discuss innovative ideas, best practices and emerging industry trends. These webinars will give participants the tools they need to become industry superstars in their own right. To review upcoming webinars, click the Web Link below.
  • Nov. 30: Doug Miller, Dark Clouds Are Gathering in Multifamily—Is It Time to Start Building Your Ark?
  • Dec. 14: Kate Good, Kate Good's 2017 Marketing Playbook
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Own Multifamily Housing: The Essential Industry Text

Multifamily Housing: The Essential Industry Text, has been developed as a definitive reference and interactive guide aimed at expanding the knowledge of multifamily professionals and as a complement to “on-the-job” experience for investors, developers, owners, managers, consultants and suppliers. As college students consider the apartment industry as a viable career option or choose to earn degrees in property management or real estate, this text offers a single source with best practices, uniform guidelines and standardized operational procedures, complete with a comprehensive glossary and industry terminology. Click on the Web Link below to purchase a copy.
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NAHMA Releases 2016 Affordable 100 List

The National Affordable Housing Management Association (NAHMA) announces its 2016 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 issues of Affordable Housing Finance magazine and Units magazine. 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.
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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.
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Upcoming Events

NAA Student Housing Conference & Exposition
February 14-15, 2017
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NAHMA Federal Affairs Issues (Winter) Meeting
March 5-7, 2017
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NAA Education Conference & Exposition
June 21-24, 2017
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NAHMA Regulatory Issues (Fall) Meeting
October 22-24, 2017
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November 2016