Because of the shutdown, more than 1,000 affordable housing contracts have expired

January 8, 2019                                  By: Suzy Khimm and Laura Strickler

"It's a mess," an affordable housing advocate said. "The pain is coming a lot earlier than we thought."

Federal contracts for more than 1,000 government-funded properties that house low-income renters have already expired as a result of the government shutdown, which could delay critical repairs and place poor families at risk of eviction, advocates and landlords say.

The Headquarters of the Department of Housing and Urban Development in Washington.  Carol M. Highsmith / Buyenlarge/Getty Images File

About 1,150 contracts with private landlords have expired since the shutdown began on Dec. 22, according to Jereon Brown, a spokesman for the Department of Housing and Urban Development. That represents about 5 percent of all contracts for a federal Section 8 program known as Project-Based Rental Assistance, which subsidizes rent and utilities for 1.2 million low-income families, including many who are elderly or disabled.

About 500 more contracts will expire in January and 550 in February if the shutdown continues, HUD said in a statement.

HUD has told the landlords participating in the Section 8 program that they “can use their reserves, where available, to cover any shortfalls," said Brown. He said that most of the properties have cash reserves on hand, which are typically required by mortgage lenders...................Read More

Government Shutdown Could Lead to Millions of Evictions

January 7, 2019                                  By: Jeff Andrews

Funding for HUD's rental assistance would lapse if shutdown drags on

Entering its third week, and with no end in sight, the partial federal government shutdown is putting millions of low-income tenants who depend on funding from the Department of Housing and Urban Development (HUD) at risk.

Getty Images

On January 4, HUD sent a letter to 1,500 landlords who house tenants under various rental assistance programs, including Section 8 vouchers and project-based rental assistance, urging them not to initiate evictions for tenants over HUD funding that has now lapsed.

According the Washington Post, HUD officials didn’t realize this funding had lapsed on January 1, and the shutdown prevents them from renewing it. HUD officials are now tapping reserve funds and “scouring for money,” according to the Post.

About 95 percent of HUD’s 7,500 employees have been furloughed. The remaining 5 percent are exempt because they respond to emergency situations that endanger life or property.............Read More

AHF, Industry Leaders Count Down Top 10 News Events of 2018

December 26, 2018                             By: Christine Serlin

Opportunity Zones, income averaging, affordability crisis buzzwords for the year.

For the affordable housing industry, 2018 has been all about navigating the new environment post-tax reform. The year marked the first increase to the low-income housing tax credit (LIHTC) in over a decade, the anticipation of the new Opportunity Zone (OZ) incentive to spur investment in distressed communities, understanding the new income-averaging option for the LIHTC program, and the return of Fannie Mae and Freddie Mac to the tax credit investment market.

Affordable Housing Finance, with help from its Editorial Advisory Board members, counts down 10 notable news events for the industry in 2018.

1. Omnibus Housing Boost

Affordable housing programs were big winners as part of the $1.3 trillion omnibus spending plan agreed to by Congress in March. “The omnibus was good for LIHTC and appropriated housing,” says Bob Moss, principal and national director of governmental affairs for CohnReznick................Read More

Affordable Communities in Rural US: A Shrinking Inventory

November 15, 2018                             By: Laura Calugar

Insufficient federal funding, low incomes and an aging population are some of the main factors that have contributed to many rural areas' shortage of affordable housing.

Examining census tracts within counties that are eligible for U.S. Department of Agriculture’s housing programs, Urban Institute researchers discovered that more than 150 counties ranked as having most-severe need for affordable housing units. The number represents 5 percent of eligible counties and roughly 7 percent of all eligible rural population in the country.

The figures look worrying: 38 percent of the researched counties are having moderately severe rental housing needs and 58 percent showed less-severe needs for affordable rental housing production. Compared to national averages, counties with most-severe need had high unemployment rates, were overcrowded and had lower shares of federally subsidized rental units. Roosevelt County in New Mexico turned out to have the most severe need for affordable rental housing production, meeting the high-need thresholds across six of the report’s indicators: Population growth, persistent poverty and unemployment, overcrowded households and severely cost-burdened households.

Demand for affordable rental housing in rural communities severely exceeds supply and the existing stock has aged significantly. Corianne Scally, senior research associate in the Metropolitan Housing and Communities Policy Center at the Urban Institute, told Multi-Housing News that it is very difficult to estimate the number of units needed nationwide to meet the current demand for rural housing due to frequent demographic and market changes. However, she confirmed that “(the) analysis of more general indicators still reveals many communities exhibiting characteristics of need, such as population growth, low rental vacancy rates and many renters paying more than half of their income for rent.”........................Read More

The Man-Made Affordable-Housing 'Crisis'

November 29, 2018                      By: Kevin D. Williamson

Rules that prohibit cheap housing lead to ... a lack of cheap housing.

Houses in a suburb of Denver, Colo. (Rick Wilking/Reuters)

In Los Angeles, they are “back houses.” In Connecticut, they are “garage apartments.” In Philadelphia, the grander ones are “carriage houses.”

In Dallas, they are “granny flats,” and they are, for the first time in a generation, legal.

In Mandarin English, these domiciles are “accessory dwelling units,” smaller secondary residences built on the lots of other houses. They have different origins: In places where detached garages are common, many homeowners built small apartments above them, sometimes to house elderly relatives or other family members who could not quite manage on their own (an arrangement that became much more common during the Great Depression); these eventually became popular short-term residences for older teenagers, the domestic quarantine of whom is generally found to be desirable. In older and tonier neighborhoods, many began as servants’ quarters. I don’t suppose I need to explain how carriage houses got their name.........................Read More

Industry Rides LIHTC Market Changes

November 27, 2018                           By: Donna Kimura

Syndicators, investors discuss market changes, income averaging, costs.

Leading syndicators and investors discuss the low-income housing tax credit market at AHF Live: The Affordable Housing Developers Summit on Nov. 14 in Chicago.

Activity in the low-income housing tax credit (LIHTC) market gained momentum in the second half of 2018 after a sluggish start caused by the uncertainty created by the tax reform legislation.

“After people did figure out what their tax liability was they sort of came back into the market in a stronger way,” said Tony Bertoldi, executive vice president of CREA. However, there’s still a big separation between pricing expectations in terms of what investors are expecting and what developers need to make deals work, he said at AHF Live: The Affordable Housing Developers Summit in November.

Despite the market changes, a number of investors and syndicators reported being on pace to have their best year, including Bank of America Merrill Lynch, CREA, and WNC.................Read More

Affordable Housing Developers Face New Challenges

November 27, 2018                      By: Bendix Anderson

The decrease in the pricing of LIHTC credits, as well as rising construction costs may put a dent in affordable housing construction.

It’s getting harder for affordable housing developers to do new deals.

The affordable housing segment of the multifamily market is just getting used to the drop in the value of low-income housing tax credits (LIHTCs) caused by the tax reform law passed at the end of last year. Now rising interest rates and rising construction costs are making it even more difficult to build affordable housing properties.

“We are seeing the long-feared increase in interest rates,” says Patrick Sheridan, senior vice president of housing for affordable housing developer Volunteers of America. “The interest rate increases we are now experiencing are decreasing project feasibility, creating more demand for more soft debt sources.”.............Read More