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

10 Takeaways From AHF Live

November 16, 2018                      By: Donna Kimura, Christine Serlin

From Opportunity Zones to the LIHTC market, there was no shortage of topics at AHF's annual conference.

Here are 10 quick takeaways from AHF Live: The Affordable Housing Developers Summit held Nov. 12-14 in Chicago.

Nearly 1,200 developers, finance executives, housing officials, and service providers gathered for the annual event, which featured informative workshops and high-level discussions of the industry's hot-button issues.

1. To-do List

The No. 1 priority for LIHTC advocates is to get a fixed 4% floor for low-income housing tax credits (LIHTCs) generated by tax-exempt private-activity bonds. Novogradac & Co. has estimated that more than 65,000 additional affordable homes could be financed from 2019 to 2028 if the rate were fixed.

The industry is looking to see where legislation for the 4% fix and other housing tax credit improvements could get attached during the lame-duck Congress.

“We’re going to push really hard. I’m optimistic that we can get something done, and we’re going to be pushing really hard for all of you to get that 4% fix,” said Bob Moss, principal and national director of governmental affairs at CohnReznick............Read More

Why affordable housing is scarce in progressive cities

November 16, 2018                      By: Patrick Sisson

Plenty of factors can explain the crisis of housing affordability plaguing U.S. cities—a shortage of new construction, a lack of tenant protection, greedy developers and speculators, or a lack of upzoning. But according to San Francisco-based housing activist Randy Shaw, author of Generation Priced Out: Who Gets to Live in the New Urban America, one of the true challenges is the entrenched power and privilege of an older generation of homeowners.

San Francisco, California | Shutterstock

“No progressive city posts “Priced Out: Only the Affluent Allowed” signs in it neighborhoods,” he writes in the book’s introduction.“But that’s what’s happened.”

Shaw, who runs the Tenderloin Housing Clinic in San Francisco, has a first-hand understanding of the causes of today’s crisis, having witnessed his city’s transformation over the last few decades into a poster child for extreme housing costs. He also knows many of the traditional solutions, having pushed for the tenant protections that make San Francisco a progressive beacon for renter’s rights.....................Read More

Enacting a Phased-in 50 Percent LIHTC Allocation Increase Could Create More Than 264,000 Affordable Rental Homes

November 9, 2018                                         By: Dirk Wallace, Michael Novogradac, Peter Lawrence

While tax reform is projected to reduce the amount of affordable rental housing production financed by the low-income housing tax credit (LIHTC) by about 235,000 over 10 years, there existed prior to tax reform and still exists today after tax reform, a tremendous unmet need for more production. According to Harvard’s Joint Center on Housing Studies, more than 11 million renter households pay more than 50 percent of their income on rent. According to the National Low Income Housing Coalition, the U.S. has a shortage of more than 7.2 million rental homes that are affordable and available to extremely low-income households. The provision of the Affordable Housing Credit Improvement Act (S. 548) that would have the biggest impact on that need remains the provision to enact a permanent 50 percent allocation increase, phased in at 10 percent annually over 2019-2023................Read More

Affordable Housing Wins at the Ballot Box in 2018

November 8, 2018                        By: Jared Brey

Gregorio Casar spent Election Day trying to calm his nerves. Casar, a second-term city councilman in Austin, wasn’t up for election on Tuesday, but voters were slated to decide on a $250 million affordable housing bond measure that he helped craft. He got to his polling place at 6 a.m., an hour before it opened, and says he “wasn’t even close to being the first in line.” It was a high-energy election. Texas Democrats were fired up by the prospect that the Congressman Beto O’Rourke of El Paso might pull off an upset and unseat Republican Senator Ted Cruz. And outside the state, it seemed like the whole country was at stake.

A city hall rally held by the Keep Austin Affordable coalition in June 2018.

When the votes were counted, O’Rourke had narrowly lost, but Austin’s Proposition A had passed with flying colors, earning more than 73 percent of the vote.

“When we were first putting this package together, there were a lot of people who I really respect who said that a $250 million housing bond was a failure out of the gate,” Casar says. “Last night, all across Texas, but in Central Texas especially, our communities showed that the world of the possible is much broader than people might have imagined when people show up and fight and are inspired, and when people show up and vote.”....................Read More

Healthy, Well-Designed Multifamily Projects Can Also be Affordable

October 30, 2018                   By: Travis Gonzalez

Woodlawn Station - Courtesy of Skender

At Woodlawn Station, residents have access to a computer room, a roof deck and a community room. On the first floor, 15K SF of retail will play host to local businesses. The complex's design is modern, with metal panels on the exterior, exposed ductwork, white concrete ceilings and kitchen islands made from recycled materials.

Some of the apartments even have a view of Downtown Chicago.

This isn’t a Class-A apartment high-rise cropping up in one of Chicago's wealthiest neighborhoods; it is a mixed-income development set to revitalize the Woodlawn community in Chicago's South Side.

Woodlawn Station, and similar projects across Chicago and the U.S., have started to embrace designs that go beyond simply providing a shelter for an underserved population. They are creating amenities that improve the well-being of the communities the developments serve. For Skender, which served as the base building and interior construction manager, Woodlawn Station is a testament to how smart design and efficient construction practices can improve how developers approach affordable housing projects................. Read More

What Happens When Affordability Restrictions Expire for Half a Million Homes?

October 22, 2018                By: Jared Brey

As rents continue to rise more quickly than incomes across the U.S., cities have become increasingly focused on affordable housing: How to pay for it, where to put it, and how to keep it from disappearing.

(Credit: NLIHC/PAHRC)

Hundreds of thousands of affordable units created under one of the biggest federal housing programs ever could start disappearing soon, in a manner of speaking. According to a new report from the National Low Income Housing Coalition and the Public and Affordable Housing Research Corporation, nearly half a million units created with Low Income Housing Tax Credits (LIHTCs) could be lost in the next ten years.

Most LIHTC (“ly-tek”) units are required to remain affordable for 30 years, the report notes. The LIHTC program was created in 1987, and the affordability requirements have started to expire on the first funded units. Between 2020 and 2029, more than 485,000 units will reach year 30, and could become unaffordable to low-income residents — including their existing tenants — without additional subsidy, the report says................Read More

Nearly 500,000 LIHTC Units at Risk of Being Lost

October 18, 2018                      By: Christine Serlin

Report details challenges of properties reaching Year 30 between 2020 and 2029.

Almost half a million low-income housing tax credit (LIHTC) units will reach their 30-year mark and the end of their federally mandated affordability restrictions between 2020 and 2029, according to a joint report by the National Low Income Housing Coalition (NLIHC) and the Public and Affordable Housing Research Corp. (PAHRC).

Daniel Yentel

According to the report, this amounts to nearly one-quarter of all current LIHTC units. These 486,799 LIHTC units, which are located in over 8,400 properties, do not receive other types of subsidies that would extend their affordability. In addition, without new capital investment for rehabilitation, these units also are at risk of physical deterioration.

Based on data from the National Housing Preservation Database and other sources, Balancing Priorities: Preservation and Neighborhood Opportunity in the Low-Income Housing Tax Credit Program Beyond Year 30 details what’s at risk, the challenges that lie ahead for preserving the existing affordable housing stock, and solutions for a housing safety net.............Read More

Report: Federal Low Income Housing Program Lacks Basic Anti-Fraud Safeguards

September 25, 2018                By: Christian Britschgi

The Low-Income Housing Tax Credit program is on the receiving end of yet another negative government watchdog report.

The federal government's flagship affordable housing program lacks basic anti-fraud safeguards, according to a new government watchdog report.

Arturo Osorno/Dreamstime.com

Last week the Government Accountability Office (GAO) released an investigation into the $9 billion a year Low Income Housing Tax Credit (LIHTC) program, finding that it lacks the necessary monitoring to prevent contractors, developers, and other program beneficiaries from fraudulently overbilling the system.

This has been a long-running problem for the LIHTC program, which has been wracked in recent years by revelations of large-scale fraud and abuse. In 2016, a group of developers and contractors in Florida pled guilty to defrauding LIHTC of some $36 million in affordable housing funds. That same year, a Los Angeles housing developer was indicted on charges stemming from an effort to defraud the program of some $50 million.

In both cases, developers conspired with contractors to inflate the construction costs of their affordable housing projects, something the complex, poorly monitored LIHTC program does little to guard against................................Read More

Jimmy Carter says the Trump administration is ignoring the affordable-housing shortage crisis

August 30, 2018                  By: Emma Newburger

• Former President Jimmy Carter told CNBC that the Trump administration is ignoring a national housing crisis, and he urged voters to support candidates who promote affordable housing.
• Carter also called for broad reform of the U.S. Department of Housing and Urban Development. He said this fall’s elections offer voters a chance to support an issue that has been widely overlooked by candidates in this year’s midterm election cycle.
• "Low-income housing needs to be raised much higher as a priority for our country," Carter said in a phone interview. "That's the first step toward making people who are now dependent on government assistance, on welfare rolls, to get a good job and have a chance to raise their families and put their kids through school."

Thony Belizaire | AFP | Getty Images

Former US President Jimmy Carter helps build a house as he visits the construction site of houses being built by Carter's Habitat for Humanity foundation for victims of the earthquake in Leogane. Haiti in 2012

Former President Jimmy Carter told CNBC this week that the Trump administration is ignoring a national housing crisis, and he urged voters to support candidates who promote affordable housing.

"Low-income housing needs to be raised much higher as a priority for our country," Carter said in a phone interview. "That's the first step toward making people who are now dependent on government assistance, on welfare rolls, to get a good job and have a chance to raise their families and put their kids through school."...........Read More

Affordable Housing: A Safe Investment in Unpredictable Times

August 23, 2018                       By:  Laura Calugar

Avanath Capital Management’s John Williams and Jun Sakumoto explain why affordable housing properties should be seen as opportunities to produce consistent returns. The two executives also revealed their expectations regarding the sector going forward.

Affordable housing is still a hot button issue in many metros across the U.S. According to a recent Yardi Matrix report, despite a strong half of 2018 for the multifamily market, affordability has highly effected rent growth in New York, San Francisco and other large metros. At the same time, at the National Apartment Association’s Apartmentalize conference in San Diego, in June, industry professionals highlighted the benefits that an affordable housing community can bring to a neighborhood.

Jun Sakumoto and John Williams

Avanath Capital Management President & Chief Investment Officer John Williams and Chief Operating Officer Jun Sakumoto discuss the misconceptions regarding profitability in the sector as well as possible solutions to the growing shortage of units for middle-income renters................................Read More

Rising Interest Rates Are Another Blow to Affordable Housing Market

August 14, 2018                        By: Orla McCaffrey

Higher borrowing costs make new projects harder to launch and put future refinancing into question

Rising interest rates are undermining efforts to build more affordable housing, creating larger funding gaps for an industry already grappling with cuts in government subsidies and rising construction costs.

This year’s climb in borrowing costs—coupled with expectations that they will keep rising—has driven down the amount of debt used to fund affordable housing deals, said Michael Novogradac, managing partner of Novogradac & Co., an accounting firm that specializes in affordable housing.

The Genesis Apartments in New York's Harlem are a mixed-income housing project completed in 2011.  PHOTO: Joanna Huckeba/The Wall Street Journal

While national data on the closing rates for affordable housing financing isn’t widely collected, many developers say the rates offered by major national lenders have risen steadily in the past two years. At Bridge Housing, one of the largest affordable housing development groups on the West Coast, both short- and long-term debt rates have climbed.

The permanent debt rate—a measure of the long-term debt projects pay to lenders—was 4.18% for a Bridge project completed in the Mission District of San Francisco in 2016. This year, a proposed development less than a mile away, with the same developer and a similar amount of debt, closed at a rate of 5.06%. The fed-funds rate rose about 1% in the interim........................Read More

As Affordable Housing Crisis Grows, HUD Sits on the Sidelines

July 27, 2018                     By: Glenn Thrush

WASHINGTON — The country is in the grips of an escalating housing affordability crisis. Millions of low-income Americans are paying 70 percent or more of their incomes for shelter, while rents continue to rise and construction of affordable rental apartments lags far behind the need.

Ben Carson, the housing secretary, with Terrace McCoy at a homeless youth center in Las Vegas. Mr. Carson continues to prioritize his push to reduce, rather than expand, assistance to the poor. John Locher/Associated Press

The Trump administration’s main policy response, unveiled this spring by Ben Carson, the secretary of housing and urban development: a plan to triple rents for about 712,000 of the poorest tenants receiving federal housing aid and to loosen the cap on rents on 4.5 million households enrolled in federal voucher and public housing programs nationwide, with the goal of moving longtime tenants out of the system to make way for new ones.

As city and state officials and members of both parties clamor for the federal government to help, Mr. Carson has privately told aides that he views the shortage of affordable housing as regrettable, but as essentially a local problem..............Read More

Young, Cantwell, King and Bipartisan Senators Introduce Bill to Create Affordable Housing Task Force

July 18, 2018            By:  Todd Young

WASHINGTON, D.C. — Today, U.S. Senators Todd Young (R-Ind.), Maria Cantwell (D-Wash.), and Angus King (I-Maine), along with Senators Dean Heller (R-Nev.), Tim Kaine (D-Va.), Doug Jones (D-Ala.), Cory Gardner (R-Colo.), Marco Rubio (R-Fla.), and Chris Coons (D-Del.) introduced the Task Force on the Impact of the Affordable Housing Crisis Act, which seeks to better understand and respond to America’s affordable housing crisis by creating a bipartisan affordable housing task force.

For millions of Americans, a lack of affordable housing has negative, profound, and lasting consequences. Research shows that an inability to access safe and affordable homes jeopardizes educational performance and economic mobility, and leaves families with fewer dollars to spend on health care, groceries, and other important expenses – further ingraining families in the cycle of poverty.

In order to solve the housing crisis, we need a better understanding of its impact on other government programs and areas of life.The affordable housing task force will evaluate and quantify the impact of housing costs on other government programs and provide recommendations to Congress on how increase affordable housing options in order to improve the effectiveness of other federal programs................Read More

Tax Incentives For Affordable Multifamily Housing

July 9, 2018                           By: Betsy Kim

Co-founders and principals of Standard Companies, Jeffrey E. Jaeger and Scott J. Alter, share key pointers on affordable housing.

NEW YORK CITY—The principals of the investment and asset firm Standard Companies, in a GlobeSt.com interview, explain a new benefit for the affordable housing sector. The company was founded 10 years ago, with its subdivision Standard Communities, by Jeffrey E. Jaeger, who works in Los Angeles, and Scott J. Alter, based in New York City. The mission of Standard Communities is preserving and upgrading affordable housing across the country.

Scott J. Alter and Jeffrey E. Jaeger, co-founders and principals, Standard Companies

Jaeger acknowledges the tremendous expense of new construction. That’s why Standard Communities focuses on preservation. He says there’s a large stock of housing built as affordable from the 1950s through the present day but many buildings have affordability restrictions which are expiring or at the risk of expiring.

“It’s considerably cheaper to preserve an existing building that is affordable than it is to build something new,” Jaeger says. “Our focus is working with the available tools to help preserve assets and provide a return on capital to do so.”..................Read More

6 Reasons Housing Is About To Become Even More Unaffordable

6/19/2018                                       By: Michael Hobbes

A new report reveals rising rents and surging inequality - and it's only going to get worse.

By nearly every measure, the American housing sector is broken. For decades, city, state and federal policies have contributed to rising rents, falling subsidies and the systematic shift of homeownership to older, richer and whiter Americans.

That’s the undeniable upshot of a new report from the Joint Center for Housing Studies at Harvard University. The report compiles hundreds of metrics on the health of America’s housing sector and finds that, despite some short-term progress since the recession, the long-term prognosis is grim.

The housing crisis is the ticking time bomb at the heart of the American economy, wiping out savings, increasing inequality and reducing the ability of workers to weather the next recession. It has been in front of us all along, but now, finally, it is impossible to ignore....................Read More

Affordable Housing Success Strategies

By:  Red Capital Group, LLC

A respected industry leader shares his prescription for 2018 and beyond.

The National Low Income Housing Coalition recently issued a comprehensive report on the nation’s inventory of affordable rental housing. The 2018 findings will surprise very few in the affordable housing industry: Affordable housing options are dwindling for many Americans.

Tracy Peters has some ideas that can help. Peters runs the affordable housing team at RED Capital Markets, LLC, a leading tax-exempt bond underwriter and mortgage lender. His firm has successfully financed thousands of affordable housing projects over the last 27 years. He recently shared his views on the opportunities ahead:

What’s on the minds of affordable housing developers today?

I think many developers are concerned about the continued pressure on state and federal budgets for housing. Although we have had some recent good news out of Washington on the housing budget front, developers must be diligent in order to preserve rental subsidies and other federal housing programs. Many are concerned with continuing increases in construction pricing and shortages in the skilled trades...................Read More

How affordable housing for a few can help us all

June 15, 2018                            By: Robert E. Cornegy, Jr.

A housing project in my district affords 10 working-class families the opportunity to become homeowners. Some may see that as too generous, while lamenting the lack of affordable housing citywide. That’s shortsighted: Affordable homeownership will lead to a stronger, fairer city.

Shutterstock

Indeed, the Van Buren Green project is exactly what’s right about Mayor de Blasio’s housing plan, which has already created almost 90,000 homes and apartments toward an ambitious 300,000-unit affordable-housing goal.

And though the majority of New Yorkers are renters — and his plan slants toward rentals — helping New Yorkers own a piece of their city is an essential piece of the puzzle.

Affordable homeownership offers security to families, too many of whom worry they are losing their place in the city they love. It allows New Yorkers of lesser means to grow equity that can then be passed along to future generations.................Read More

Analysis: HUD plan would raise rents for poor by 20 percent

June 4, 2018               By: The Associated Press

CHARLESTON (AP) Housing Secretary Ben Carson says his latest proposal to raise rents would mean a path toward self-sufficiency for more than 4 million low-income households across the United States by pushing more people to find work. For Ebony Morris and her four small children, it could mean homelessness.

Morris lives in Charleston, South Carolina, where most households receiving federal housing assistance would see rents rise an average 26 percent, according to an analysis done by Center on Budget and Policy Priorities for The Associated Press. Her increase would be nearly double that.

Overall, the analysis shows that in the 100 largest U.S. metropolitan areas, low-income tenants — many of whom have jobs — would have to pay roughly 20 percent more each year for rent under the plan. That’s about six times greater than the growth in average hourly earnings, putting poor workers at an increased risk of homelessness because wages haven’t kept pace with housing expenses.

“I saw public housing as an option to get on my feet, to pay 30 percent of my income and get myself out of debt and eventually become a homeowner,” said Morris, whose rent would jump from $403 to $600. “But this would put us in a homeless state.”..........................Read More

'Failing' affordable housing system 'requires decisive federal leadership'

May 29, 2018                      By: Naaman Zhou

Academics call for independent advisory body and long-term approach

A national housing strategy is needed to fix Australia’s “failing” affordable housing system, according to a report from academics at the University of Sydney, the University of New South Wales and Curtin University.

The report, released by the Australian Housing and Urban Research Instituteon Tuesday, called for a coordinated “whole-of-government” approach and decisive federal leadership.

It said Australia’s housing policy was “weak and/or inappropriate” and public funding was inadequate.

Australia has a shortfall of more than 200,000 affordable dwellings. In New South Wales there are more than 60,000 households on the social and affordable housing waiting list, and more new dwellings were constructed between 1990 and 1995 than 1995 and 2010....................Read More

Why are nearly 1 in 4 Millennials still living with mom? Lack of affordable housing

May 28, 2018                                            By:  Annie Nova, CNBC

Looks like many Millennials won't have to go out of their way to see mom for Mother's Day.

That's because nearly 23% of Millennials already live with their mother, according to a new report from Zillow, an online real estate database company. In 2005, about 14% did so.

To crunch the numbers, Zillow analyzed U.S. Census Bureau data from 2005 through 2016, focusing on households in the 50 largest metros that included a mom, and a younger resident age 24 to 36.

"You would expect young adults living at home to return to historic norms," said Aaron Terrazas, senior economist at Zillow, speaking about how we've recovered from the housing bubble. "But the trend hasn't decreased — if anything, it's increased.".................Read More

How Do We Proactively Preserve Unsubsidized Affordable Housing?

May 23, 2018                         By: David Luberoff, Deputy Director

Robust land bank and land trust partnerships, long-term lease-purchase programs, and low-interest renovation loans with affordability requirements are three tools that policymakers and mission-driven organizations can use to get ahead of real estate price appreciation, according to Proactive Preservation of Unsubsidized Affordable Housing in Emerging Markets: Lessons from Atlanta, Cleveland, and Philadelphia, a new working paper jointed published by the Joint Center for Housing Studies and NeighborWorks® America. Written by Matt Schreiber, a Master of Urban Planning student at the Harvard Graduate School of Design who was a 2017 Edward M. Gramlich Fellow in Community and Economic Development, the paper draws on work done by public and non-profit entities in all three cities.

North Philadelphia (Credit: Tony Fischer/Flickr)

In those places, Schreiber notes, median house prices range from $60,000 to $250,000, which suggests that they have an ample supply of affordable units. However, housing in those markets actually remains out of reach for so many residents, whose incomes are not growing as rapidly as house prices, which, according to Zillow's Home Value Index, rose by 8-11 percent in 2017. Such increases, and the fact that prices rose in more than 90 percent of the zip codes in those three cities, led Schreiber to ask what policymakers and the leaders of mission-driven organizations could do to get ahead of real estate price appreciation and, in doing so, proactively preserve their city's stock of affordable housing.................Read More

HUD's proposed changes create hurdles not ladders

5/14/2018            By: Aufa Atta-Mensah & Connie M. Razza, Opinion Contributor

In the midst of a Twitter feed alight with stories about police being used to shut black people out of places to eat, drink, exercise, and relax, comes a story about Trump’s Department of Housing and Urban Development (HUD) using policy to do the same. The federal government is adding new and significant hurdles to communities of color — particularly black people — being able to access housing.

Reporting earlier this year revealed that HUD is intending to remove from its mission the goal of creating inclusive, discrimination-free communities. It has retreated from pending fair-housing enforcement actions. And it closed April — the month that marks the 50th anniversary of the Fair Housing Act — with a proposal that will harm the families most in need of housing assistance. The so-called “Making Affordable Housing Work Act of 2018” increases rents, enables work requirements, and worsens the prospects for families and communities..............Read More

The Case for Building Public Housing That Doesn't Suck - And Lots of It

May 2, 2018                         By: Eli Day

An interview with the co-author of an ambitious plan to tackle America's housing crisis.

Housing has been one of the single greatest vehicles for building wealth in the United States. Yet the ranks of Americans who can’t find affordable housing are swelling.

Although the problem goes back decades, the collapse of the housing bubble in 2008 and the recession that followed made it impossible to ignore how dysfunctional America’s housing landscape has become. Today, nearly half of renters pay more than 30 percent of their income on housing. After declining during the Obama years, the number of homeless people rose to over 550,000 in 2017. According to the Urban Institute, there is only enough “adequate, affordable and available” housing for 46 percent of the roughly 11.8 million extremely low-income households. Nevertheless, Secretary of Housing and Urban Development Ben Carson is touting legislation that would triple rents for some of the poorest public housing residents.......................Read More

IRS Releases Official Population Figures to Calculate LIHTCs, PABs

May 3, 2018                           By:  Novogradac & Company LLP

Reporting an annual growth rate of 0.7 percent nationwide to 325.7 million residents, the Internal Revenue Service today released official population figures for the 2018 calendar year for purposes of calculating states’ allocations of low-income housing tax credits (LIHTCs) and private activity bonds. The state LIHTC cap is the greater of $2.70 per resident or $3,105,000 and state bond caps are the greater of $105 per resident or $310,710,000. Idaho and Nevada were the fastest growing states by percentage, while Texas and Florida gained the most residents by numeric growth. Eight states dropped in population, with Illinois having the largest numeric decline...................Read More

HUD Secretary Ben Carson to propose tripling rent for some low-income Americans receiving federal housing subsidies

April 25, 2018                            By: Tracy Jan

Housing and Urban Development Secretary Ben Carson on Wednesday will propose tripling the amount the poorest households are expected to pay for rent as well as encourage those receiving housing subsidies to work, according to the administration’s legislative proposal obtained by The Washington Post.

U.S. Secretary of Housing and Urban Development Ben Carson testified before a Senate Banking Committee hearing last month. (Reuters/Kevin Lamarque)

The move to overhaul how low-income rental subsidies are calculated would affect more than 4.5 million families relying on federal housing assistance. The proposed legislation would require congressional approval.

Tenants generally pay 30 percent of their adjusted income toward rent or a public housing agency minimum rent — which is capped at $50 a month for the poorest families. The administration’s legislative proposal sets the family monthly rent contribution at 35 percent of gross income or 35 percent of their earnings working 15 hours a week at the federal minimum wage. Under the proposal, the cap for the poorest families would rise to approximately $150 a month, three times higher than the current minimum..........................Read More

Two Steps to Ensure Affordable Housing Production is not Lost

April 2, 2018                       By: Michael Novogradac

Affordable rental housing survived the tax reform war of 2017, though not unscathed. Now it needs to stabilize and prepare to rebuild–and it took a first step to do so in March.

Tax credits and private activity bonds (PABs) were all under significant threat during 2017’s yearlong battle over tax reform, which resulted in the passage of H.R. 1 in December 2017. The legislation preserved the low-income housing tax credit (LIHTC), PABs, the new markets tax credit (NMTC) and renewable energy investment tax credit (ITC) and production tax credit (PTC); while preserving but changing the historic tax credit (HTC). Considering that the House version of tax reform included the elimination of the tax-exemption of PABs, which help fund more than half of LIHTC developments every year, things could have been considerably worse.

However, merely preserving these incentives doesn’t mean they escaped unharmed–particularly the LIHTC. The damage to affordable housing from the tax legislation is steep, primarily because the reduction of the top corporate tax rate from 35 percent to 21 percent.

That means the value of the tax losses that accompany LIHTC investments is reduced. A Novogradac & Company analysis found that the 14 percent lower corporate tax rate likely reduces the amount of LIHTC equity that can be raised by about 14 percent. In dollar value, that’s roughly $1.7 billion each year........................Read More

Congress Helps Affordable Housing Developers

April 3, 2018                            By: Bendix Anderson

The new federal budget just passed by Congress includes a few changes that will strengthen the LIHTC program.

Affordable housing developers got a nice surprise when Congress passed its federal budget for 2019, which became law in March 2018.

“The recently enacted omnibus contains some welcome increases that will help affordable housing production,” says Scott Hoekman, senior vice president and chief credit officer for Enterprise Community Investment, a non-profit based in Washington, D.C. that helps finance and build affordable housing.

The affordable housing industry has been troubled by uncertainty recently. The Tax Cuts and Jobs Act of 2017 kept the low income housing tax credits (LIHTC) program, but its new, lower corporate tax rate has made the LIHTC program less effective.

The new federal budget just passed by Congress will make up for some of those losses. Plus, the budget includes a few changes that will strengthen the program.

“The industry can now once again focus on building and preserving affordable housing,” says Hoekman.....................Read More

This beautiful neighborhood is defying Section 8 housing stereotypes - take a look

April 1, 2018                                                        By: Leanna Garfield

Today's stereotypes of what public housing looks like originated four decades ago.

In 1978, the Jimmy Carter administration created the Housing Choice Voucher program, also known as Section 8, which provides assistance to low- and moderate-income families to rent affordable housing built by local housing authorities.

Westlawn Gardens, a public-housing development in Milwaukee, Wisconsin. HUD/APA

You've likely seen some of these 1980s-era apartment buildings — characterized by their boxy shapes and shabby brick facades — which come with a number of negative stereotypes. A 2010 analysis points to five major public concerns around Section 8 units: a lack of maintenance, expectation of crime, disapproval of housing as a handout, reduction of property values, and physical unattractiveness.

A redeveloped public-housing neighborhood in Milwaukee, Wisconsin could defy those old attitudes. Called Westlawn Gardens, it features green lawns, a community garden, new sidewalks and stormwater drains, and attractive apartment units with bright exteriors and modern interiors. Milwaukee's housing authority contracted the architecture firms Torti Gallas & Partners and Kindness Architecture & Planning to redesign Westlawn....................Read More

A Bipartisan Victory for Affordable Housing

March 28, 2018              By: Bob Moss & David Gasson

Bob Moss and David Gasson write that the LIHTC is a priority for both parties

The affordable housing industry is celebrating a significant victory in our never-ending pursuit of additional resources to address the nation’s growing affordable housing crisis. With the passage of the fiscal year 2018 omnibus budget, Congress has restored some of the resources to the low-income housing tax credit (LIHTC) that had been diminished with the passage of the Jobs and Tax Cuts Act of 2017 in December.

Inclusion of a 50% cap increase to the 9% LIHTC over four years (2018-2021) and the permanent initiation of the income-averaging provision will provide much-needed financial and housing resources to communities across the country. In addition, appropriators recognized the damage inflicted on the Department of Housing and Urban Development (HUD) budget, and thus those Americans that rely on HUD’s assistance, by repeatedly reducing resources to much-needed programs as recently noted in reports by both the Joint Center for Housing Studies at Harvard University and the National Low Income Housing Coalition. Acting on this information, as well as countless meetings with housing advocates, the appropriators increased the fiscal 2018 HUD budget by 10% over fiscal 2017 numbers. Credit for this abounds but special mention must go to Sen. Susan Collins (R-Maine), chair of the Appropriations THUD (Transportation, Housing and Urban Development and Related Agencies) subcommittee, for her steadfast support for affordable housing. More on the ongoing budget battle at a later date...........................Read More

9 challenges affordable housing needs to overcome

March 24, 2018                     By: Aliens Group

Affordable housing has become a popular term in India for more than a decade now with several governments trying to provide for the shortage of houses for the mid and low income people. Are governments really successful in reducing this gap of demand and supply for affordable homes in the country? Has affordable housing been able to meet its goals and deliver to as per expectations?

The recently launched FICCI- CBRE whitepaper on 'Affordable Housing – The Next Big Thing?' highlights that "the segment hasn't really gained the required momentum to address this gap. A major reason has been the lack of private participation in the segment."

Under the Modi government, the past few years have seen maximum activity on Indian real estate scene, such as the launch of Mission Housing For All by 2022, imparting infrastructure status, implementation of RERA, revision of REIT guidelines, PPP policy, and a dedicated fund for affordable housing as a budget provision.

Speaking at the Conference on 'Pradhan Mantri Awas Yojana - Housing for All by 2022', organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Ministry of Housing and Urban Affairs in Delhi, Minister of State (Independent Charge) for Housing and Urban Affairs, Hardeep Singh Puri said that PMAY is not just successful but is roaring and hence brings the opportunity for the private players to be the part of the scheme......................Read More

The LIHTC Continues to Serve Those Most in Need of Affordable Housing

March 26, 2018                    By: Peter Lawrence

The low-income housing tax credit (LIHTC), continues to serve the nation’s most vulnerable households, according to “Understanding Whom the LIHTC Program Serves: Data on Tenants in LIHTC Units as of December 31, 2015,” a U.S. Department of Housing and Urban Development’s (HUD) report released March 20, 2018. The report provides insight into households in LIHTC rental homes including information about race, ethnicity, family composition, age, income, use of rental assistance, disability status, and monthly rental payments.

There are several caveats to consider about HUD’s data. First, not all data reported by housing finance agencies (HFA) are collected in a manner consistent with HUD’s demographic data collection standards. Second, what’s reported does not capture all LIHTC households because some HFAs did not submit 2015 data. In addition, the information is requested at the household level or for individual household members, but reporting is not consistent. Still, the data submitted is significantly large enough to be a representative sample and provides useful information about the economic and demographic profiles of households residing in LIHTC properties...................Read More

Affordable Apartments Lost

By: Multifamily Executive           Sponsored by PNC Bank

Every year, thousands of apartments are demolished - often by owners who can no longer pay to make the repairs needed to keep the apartments habitable.

Every year, thousands of apartments are demolished, often by owners who can no longer afford the repairs needed to maintain them.

These units are often among the most affordable homes in their respective markets, with the people living in them frequently having few other housing choices. The elimination of these apartments from the housing stock only exacerbates the already critical nationwide shortage of low-income housing. However, new financing tools are helping recapitalize these units, repair their problems, and keep them affordable.

“We’re not going to be able to build our way out of the affordable housing crisis … something needs to be done to preserve the existing stock, as well,” says Caitlin Sugrue Walter, senior director of research for the National Multifamily Housing Council (NMHC).................Read More

Housing as a hub for health, community services, and upward mobility

March 15, 2018                       By: Stuart Butler & Marcela Cabello

There is a growing recognition that, for people and neighborhoods to be healthy and successful, different sectors must work together and that investments in one sector can bring dividends in others. Housing, for example, is increasingly understood to be an important determinant of success in life, affecting health, access to education, and the opportunity for upward mobility.

The condition and location of a family’s home can affect such things as respiratory health and “toxic stress” among children, which can have lasting effects on individuals throughout their lives. The availability of good social services, positive social networks, and job opportunities can determine whether a family achieves the American Dream or not.

In “Housing as a hub for health, community services, and upward mobility” (PDF), Stuart Butler and Marcela Cabello explore the ways in which housing can affect the lives and success of individuals, and how the effect varies for different segments of the population. But, the authors find that in many instances there are a number of policy and other issues obstructing the capacity of housing to serve this vital purpose........................Read More

The Gap: A Shortage of Affordable Rental Homes

No State Has an Adequate Supply of Affordable Rental Housing for the Lowest Income Renters

Widespread Shortage of Affordable Housing

The U.S. has a shortage of 7.2 million rental homes affordable and available to extremely low income renters, whose income is at or below the poverty guideline or 30% of their area median income. Only 35 affordable and available rental homes exist for every 100 extremely low income renter households. Extremely low income households face a shortage in every state and major metropolitan area, including the District of Columbia. Among states, the supply of affordable and available rental homes ranges from only 15 for every 100 extremely low income renter households in Nevada to 59 for every 100 extremely low income renter households in Maine. For the 50 largest metropolitan areas in the U.S, the supply ranges from 10 affordable and available rental homes for every 100 extremely low income renter households in Las Vegas, NV to 47 in Providence, RI.................................Read More

For Low-Income Renters, the Affordable Housing Gap Persists (citylab.com)

March 14, 2018                               By: Alicia Doktor

Finding affordable housing isn’t getting any easier for the more than a quarter of U.S. renters that are extremely low-income. For six years, the National Low Income Housing Coalition has released an annual report calculating the discrepancy between available affordable housing units and renters who earn below the poverty line or 30 percent of the area median. Last year, they found that for every 100 households categorized as extremely low income (ELI), only 35 affordable rental homes are available—a shortage of over 7 million affordable and available homes. That same figure stands today.

Part of this shortage is caused by an influx of higher income households into more affordable homes: Almost half of the affordable rental units are occupied by families that earn above the poverty line. As incomes get higher, cumulative shortages get less pronounced. Households that earn less than 50 percent AMI have 56 affordable and available rental homes; those below 80 percent have 93.....................................Read More

Want Affordable Housing? Just Build More Of It

March 14, 2018                          By:  Noah Smith

Urban California should emulate Tokyo, which ensured the supply of dwellings stayed ahead of population growth.

After years of dithering and hoping the problem would go away, California is finally taking steps to address its housing crisis. In 2017 the state passed a series of billsdesigned to encourage the construction of new affordable housing -- streamlining the regulatory approval process, providing more state funding and cracking down on local governments that fall short of their housing goals. Now, state Senator Scott Wiener is pushing a new more aggressive package of legislation.

Build up, not out.     Photographer: Joe Sohm/Visions of America/UIG/Getty Images

The most dramatic change Weiner would make, which is similar to a parallel effort in the state assembly, would be to force cities to allow dense housing development near public transit. This is a great idea to help poor Californians, since lower-income people are more likely to use transit, and are the ones suffering the most from the housing shortage. Sadly, the bill is already encountering opposition from homeowners’ groups, which are no doubt eager to push up their property values. It is also receiving pushback from the Sierra Club, which offered the tortured rationale that allowing dense housing near public transit would cause political support for transit to drop. Other opponents claim that allowing new development would raise rents -- a dubious assertion that is theoretically possible, but highly unlikely...................Read More