Don't 'Kill' The Low Income Housing Tax Credit, Expand it

September 22, 2017                     By:  Jane Graff, Michael Bodaken, Patrick Sheridand & Terry Parker

Leaders of four of the largest affordable housing nonprofits make the case for the LIHTC.

In a recent op-ed published in The Wall Street Journal (“Kill the Loopholes, Including the One for Low-Income Housing”), authors Chris Edwards and Vanessa Brown Calder argue that the low-income housing tax credit, the most successful tool we have to create affordable housing, should be eliminated. This idea would have detrimental impacts for millions of people nationwide.

As the leaders of the country’s largest affordable housing nonprofits, we know that the housing credit is a critical incentive for private investment in housing that is affordable. Over the last 30 years, virtually all affordable rental housing in this country has been built or rehabilitated with housing credit support.

The housing credit should be expanded, not “killed.” Currently more than one in four renters pays more than half of their income on housing costs, and waiting lists for affordable housing are already years long—many aren’t even open to new applicants, the backlog is so enormous. Without building more affordable housing with the housing credit, these problems will only grow worse. Moreover, Matthew Desmond, in his Pulitzer Prize-winning book Evicted, demonstrates that housing stability is the gateway to breaking the cycle of poverty....................Read More

If Rent Were Affordable, the Average Household Would Save $6,200 a Year

September 20, 2017                     By: Tanvi Misra

A new analysis points to the benefits of ending the severe affordability crisis.

If renters paid just what they could afford in rent, the average household would have $6,200 a year more in their pocket to spend on groceries, childcare, medical care, and education—things one in five households have been skimping on to make rent. Collectively, that would amount to $124 billion that can help fuel economic growth.

A new apartment complex in North Dakota, advertising its vacancy. //Andrew Cullen/Reuters

These estimates of the 100 most populous U.S. cities come from a new analysis by the National Equity Atlas—a joint project by PolicyLink and the USC Program for Environmental and Regional Equity. “Renters are the lifeblood of cities,”Angela Glover Blackwell, CEO of PolicyLink, said in a statement. “If rents were affordable, renters could meet their basic needs like transportation, food, and child care and contribute even more to thriving communities. This would have a positive ripple effect throughout their regions.”.........................Read More

ULI report: Here are 5 ways states can create affordable housing

September 18, 2017                    By: AZRE

State governments, in partnership with cities and other local jurisdictions, can and should do more to promote housing development, affordable housing and choice through smarter local land use policies and incentives, according to a new Urban Land Institute (ULI) report, Yes in My Backyard.

Rising housing costs are creating hardships for millions of U.S. households and taking a toll on economic growth – a problem made worse by local zoning and land use regulations and development review processes that impede affordable housing development, the report explains. While municipalities have more autonomy in some states than others, states do have significant power to affect these regulations. However, the report notes, relatively few states have seized opportunities to deploy their authority and resources to help localities plan and accommodate housing development through land use and zoning policies......................Read More

Affordable Housing Developers Face New Challenges

September 19, 2017                     By: Bendix Anderson

The federal LIHTC program is providing less funding in 2017 than it did in prior years.

Affordable housing developers are facing more obstacles to building new projects, even though the need for affordable housing seems to grow stronger every year.

“We believe affordable housing production, that is, the development or preservation of projects financed with Low Income Housing Tax Credits (LIHTCs), will be at best flat to last year,” says Richard Gerwitz, co-head of Citi Community Capital, a community lending and investment arm of Citi.

The most important government program that helps fund new affordable housing—the federal LIHTC program—is providing less funding in 2017 than it did in prior years. At the same time, developers of all types have to pay more to compete for workers, construction materials and development sites. All that adds up to the likelihood that fewer units of affordable housing will start construction this year compared to 2016, even though the need for affordable housing may have never been greater, according to numerous studies and reports................Read More

Creativity Key To Affordable Housing Funds

September 18, 2017                       By: John Salustri

The affordable housing sector is in financial crisis.  And this year, it seems the crisis is becoming more chaotic. In the midst of chaos, creativity in the approach of funding is what you need.

NEW YORK CITY—Affordable housing is multifamily’s problem child, largely pushed aside by the bigger paydays of the luxury market, bureaucratic oversight and dwindling funds for construction. Relief from this chaotic condition lies largely in the hands of lawmakers, leaving it to the creativity of practitioners, the developers and the financial sources to fill the gaping holes in the system.

Rendering of Center\West in Baltimore

“The country is experiencing an unprecedented rise in renting,” says Al Beaumariage, KeyBank’s SVP and program manager for affordable housing. Since the current upswing began in about 2010, “the number of renter households has increased on average by 800,000 annually. So today, nearly 39 million people in the US, or one in eight, are calling apartments home.” Still, he adds, a mere 300,000 apartments are coming out of the ground annually, only 40,000 of which are affordable............Read More

Starrett City Sells For $850M, Donald Trump Stands to Profit

September 7, 2017                                  By: Matthew Rothstein

The largest affordable housing project in America has been sold, pending approval from the Department of Housing and Urban Development.

Starrett City, virtually an ecosystem unto itself between the East New York and Canarsie neighborhoods in Brooklyn, is under agreement for a sale to a joint venture of recently formed Brooksville Co. and Rockpoint Group for over $850M, the New York Times reports. The sale is expected to close in 2018.

The 145-acre Starrett City is home to a racially diverse mix of low, moderate and middle income families with 100% designated affordable units. The 46-building, 5,881-unit complex has its own ZIP code, school system and power plant. All told, it houses at least 15,000 residents.....................Read More

Even Affordable Rentals are too Expensive for Lowest Income Tier

By:    Suzanne De Vita                        August 29, 2017

Housing in major metropolitan areas is moving beyond the means of many, with renters, especially, burdened by rising rents and standstill wages. Affordability has become so strained, according to a recent analysis by Zillow, that even cheap rentals are out of reach for the very segment they’re priced for.

Researchers at Zillow assessed income data from the U.S. Census Bureau against rents, discovering that low-income renters in the 25 largest metropolitan areas are spending much more than what is recommended on rent, even in locations where rentals are priced inexpensively for the market.

The consequence, the research shows, is a lapse in savings that could be disastrous for renters already severely financially strapped. (In a separate analysis, Zillow projected homeless populations in metropolitan areas should rents rise 5 percent in 2017, with stark repercussions.) Roughly 70 percent of renters have not saved three months’ worth of living expenses..................Read More

Multifamily Industry Sees Continued Market Growth, Increased Affordability Challenges

September 6, 2017                         By: Christopher Spina - Freddie Mac

Freddie Mac Releases New Survey of Industry Participants

MCLEAN, VA--(Marketwired - Sep 6, 2017) - According to a new survey commissioned by Freddie Mac (OTCQB: FMCC), a significant majority of the multifamily industry believes the rental housing market will continue to grow, fueled by increasing demand and a growing population. At the same time, however, a plurality of participants is less optimistic about the outlook for affordable housing as compared to just one year ago.

Commissioned by Freddie Mac in partnership with the real estate media and intelligence firm Hanley Wood, the survey gauged the attitudes of industry participants in sectors such as property development; building and construction; property management; lending, financing and investing; and government and trade associations.

Specifically, the survey found that 60 percent of industry participants anticipate the multifamily housing market will grow over the next 3-5 years, while only about 15 percent see it slowing down. Of those who believe the industry will grow, nearly one-third cite supply and demand as the justification for this continued growth, while another 17 percent cite population growth...................Read More

This grim map shows all the places working-class Americans can't afford to live

September 5, 2017                               By: Shawn Langlois

For much of this country’s working class, the American Dream is dead. In case you didn’t already know that, cost-estimating website HowMuch.net created a grim map that tells the sad tale.

The Statue of Liberty stands in the foreground as Lower Manhattan is viewed at dusk.

In the chart below, each bubble represents a city. The color corresponds to the amount of money the average American family has left over at the end of the year after paying for their living costs, like housing, food and transportation. The darker the shade of red, the worse off you are. The greener, the better. The bubble size also fits a sliding scale.

There's a lot of red on that map..............Read More