AFFORDABLE HOUSING INDUSTRY

The National Multi Housing Council (NMHC) and National Apartment Association (NAA) announced on November 18 that they will continue their joint legislative program, the NMHC/NAA Joint Legislative Program (JLP). The groups have agreed to extend their partnership for three years. The JLP’s legislative priorities include ensuring the industry’s continued access to capital as lawmakers reform and possibly restructure Fannie Mae and Freddie Mac; securing workable and cost-effective building energy efficient standards in energy and climate change legislation; opposing proposals to triple the taxation on a general partnership’s promote because such a change would have the unintended consequences of stifling the nascent economic recovery and exacerbating the nation’s affordable housing shortage; and opposing the Employee Free Choice Act, which would disproportionately increase the political power of unions at considerable cost to employees and businesses during a severe economic recession and sustained period of job loss.

A National Low Income Housing Coalition (NLIHC) analysis of American Community Survey (ACS) data shows the shortage of units affordable for renters earning under 30 percent of area median income (AMI) grew from 2.7 million units in 2007 to 3.1 million in 2008. The survey shows that there were 37 affordable rental units available for every 100 extremely low-income renter households in 2008. The deficit is rising because the number of extremely low-income renters is rising. ACS data show that the number of extremely low-income renter households increased by 3.5 percent. During the same period, the supply of rental homes affordable for extremely low-income families decreased by 1.8 percent. NLIHC anticipates that the shortage will likely be worse for 2009 and 2010 because of increases in unemployment. NLIHC has analyzed Public Use Micro Sample data from the 2007 and 2008 ACS. ACS, an annual survey of approximately 3 million households that provides recent information on the characteristics of Americans and their housing, publishes its data in the fall of the year after they have been collected.

STATE

On October 22, the California Supreme Court rejected an appeal in Palmer/Sixth Street Properties v. City of Los Angeles and let stand the Court of Appeals decision in that case. On July 22, 2009 the California Appellate Court ruled that the inclusionary housing requirements required by the city of Los Angeles for a mixed-use project being developed by Palmer/Sixth Street Properties LP (Palmer) are in conflict with California’s Costa-Hawkins Rental Housing Act (Costa-Hawkins). Based on the ruling in Palmer, it would appear that cities can no longer require inclusionary housing in California unless the city is providing direct financial contributions or other forms of assistance. However, the court did not rule that an impact fee by itself would be contrary to Costa-Hawkins. For more information, please refer to the article, “Recent Ruling Makes Changes to Inclusionary Housing in California,” by Thomas Stagg, CPA, in the October 2009 issue of the Novogradac Journal of Tax Credit Housing.

Oregon Housing and Community Services (OHCS) announced the award of nearly $70.5 million in low-income housing tax credits (LIHTCs), grant and loans on November 13. The funds will help preserve or create 444 units of affordable housing. OHCS awards included more than $3.7 million in annual LIHTCs, $21.2 million in Oregon Affordable Housing Tax Credits (OAHTCs) and almost $5 million in HOME funds. The properties to receive LIHTCs, OAHTCs and/or HOME funds are Quimby Apartments in Bend, 29th Place in Eugene, The Cedars in Grant’s Pass, Aspen Park in La Grande, Grand Apartments in Medford, Seneca Terrace in Milwaukie, Chaucer Court and Uptown Towers in Portland, Neu Place and Trillium Terrace in Roseburg and Sunrise Estates in The Dalles.

Ohio Capital Corporation for Housing (OCCH), a not-for-profit financial intermediary and locally-controlled syndicator of low-income housing tax credits (LIHTCs), announced on November 12 that it would close $170 million in financing for the creation and preservation of affordable housing in 2009. That amount includes the closing of more than $143 million in private capital. The $68 million Ohio Equity Fund for Housing XIX is funded by long-standing investors including Fifth Third Community Development Corporation, Key Community Development Corporation, JPMorgan Capital Corporation, The Huntington Community Development Corporation, Park National Bank and FirstMerit Bank. The $75 million The Nationwide Ohio ARRA Fund LLC, a joint effort between OCCH, the Ohio Housing Finance Agency and Nationwide Insurance with Nationwide as the sole investor. The Nationwide fund will facilitate the development of 16 properties awarded LIHTCs in 2007 and 2008. OCCH’s lending affiliate, the Ohio Capital Finance Corporation, received a $1 million award from the Community Development Financial Institutions Fund to provide predevelopment and acquisition financing for affordable housing in Ohio.

PEOPLE IN THE INDUSTRY

Priscilla Almodovar resigned on December 4 as president and chief executive officer (CEO) of the New York State Housing Finance Agency (HFA) and the State of New York Mortgage Agency (SONYMA), collectively referred to as nyhomes. Almodovar was appointed to the position in January 2007. During her tenure, nyhomes was the number one issuer of housing bonds in the country in 2007 and 2008. She increased the number of affordable rental units financed throughout the state to almost 4,000 units a year and prioritized preservation and 100 percent affordable housing properties. Crain’s New York Business reports that HFA Chairman Judd Levy will serve as acting president and CEO until a replacement is named.

Jonathan Plutzik has been elected to Fannie Mae’s board of directors. He will serve on the Compensation and Risk Policy & Capital committees. Plutzik served in the government and public finance groups at Credit Suisse Group for 24 years, becoming global co-head of the financial institutions group at Credit Suisse First Boston (CSFB). He retired as vice chairman of CSFB in 2002. At CSFB he managed investment banking activities and he has extensive experience working with federal agencies and state and local governments. Plutzik earned a masters of business administration from the Wharton School at the University of Pennsylvania and his bachelor of arts degree from Brandeis University.

Affirmed Housing Group (AHG) hired Nicki Cometa as its chief financial officer in September. Cometa has worked in the public and private sectors of the construction and homebuilding industry for 20 years. Before joining AHG, Cometa worked as a financial consultant in the construction industry. She was vice president of finance for Shea Homes from 2005 to 2008. Prior to that, Cometa served as finance manager at Ryland Homes and senior vice president of finance at Innovative Communities. She was a controller for TV Magic Inc. and worked at Breham Communities.

DEALMAKERS

Boston Capital announced on November 19 that it invested in Tamarack Place Apartments, an 83-unit multifamily development in Seattle, Wash. The apartments are part of a mixed-use, urban infill property being developed by the Seattle Housing Authority. Tamarack Place will include 24 one-bedroom, 53 two-bedroom, and six three-bedroom apartments in a four-story building. All of the apartments will be affordable to households earning below 60 percent of the area median income (AMI) and several units will be available to households earning below 30 percent AMI. Amenities will include water-conserving plumbing fixtures, Energy Star appliances, high-efficiency lighting fixtures, low volatile organic compound paints and individual thermostats. The community will feature a highly-efficient HVAC system, timed lighting, drip irrigation and light-colored concrete to reduce the heat island effect. The roof will be photovoltaic-ready with green, vegetated areas. Tamarack Place also received a $7 million in American Recovery and Reinvestment Act funds to resume construction.

Affirmed Housing Group broke ground on Magnolia Court in Manteca, Calif. on December 7. The 52-unit senior property was allocated low-income housing tax credits (LIHTCs) in 2008, which it exchanged for nearly $6.6 million in tax credit exchange program funds. The complex features seven studio, 36 one-bedroom and nine two-bedroom apartments. Amenities will include a common building and recreation center, and an on site manager and maintenance staff. The buildings will also feature solar panels and solar hot water systems. Unit amenities will include a refrigerator, dishwasher, disposal, range, and patio/balcony. Tenants will also have above ground plots that they can use for gardens. BOGC Inc. will serve as contractor for Magnolia Court and Studio E is the architect.

BONDS

Ohio Housing Finance Agency (OHFA) board on November 18 approved the issuance of as much as $28 million in multifamily mortgage revenue bonds. Proceeds from the bonds will be used to fund the acquisition and rehabilitation of nine multifamily properties, resulting in 450 units of affordable housing being preserved. The nine developments are Crescent Village Townhomes in Meigs County, Frontier Run in Van Wert County, Jeremy Park in Ashtabula County, Joshua Landing in Scioto County, Mallory Meadows in Hardin County, Moccasin Run in Crawford County, Post Woods Townhomes in Franklin County, Ursula Park in Clinton County and Willow Bend Townhomes in Franklin County. OHFA’s board approved an additional $1.5 million in funding from the Housing Development Assistance program for Frontier Run, Jeremy Park, Joshua Landing, Mallory Meadows, Moccasin Run and Ursula Park.

Silverwood Companies, David Mayhood and other local investors acquired The Fields of Westover, a 305-unit affordable housing community in Falls Church, Va. The apartments will undergo $4 million in renovations and be renamed East Falls Apartments. The Virginia Housing Development Authority provided $27 million in new tax-exempt bond financing for the acquisition. The new ownership assumed a $3.2 million taxable VHDA loan. Acquisition and renovation costs were about $35 million. Renovations will include refurbished kitchens and baths with new vinyl flooring, refinished hardwood flooring in the living areas, and replacing the heat pumps. Additionally, the developer will build a new community building with fitness, activity, and business centers. Silverwood will manage East Falls Apartments as a low-income housing tax credit (LIHTC) community, with 100 percent of the apartments allocated to individuals and families who earn 60 percent or less of area median income. The seller, Willston Commons LLC, renovated the one- and two-bedroom apartments in 1996 using equity from LIHTCs.

MassDevelopment announced on December 7 that it would issue $10.17 million in tax-exempt bonds on behalf of BC Tammy Brook LLC, an affiliate of Beacon Communities LLC, to purchase and manage Tammy Brook Apartments in Weymouth, Mass. Bond proceeds will go toward the acquisition and renovation of 90-unit affordable townhouse apartments. The bond financing will preserve 65 units of affordable housing. The MassDevelopment tax-exempt bonds allowed BC Tammy Brook to access federal low-income housing tax credits, resulting in $914,000 in equity. Tammy Brook Apartments community consists of 12 two-story townhouse apartment buildings, two tot lots, two basketball courts, a laundry facility and a small house that will serve as a residence for onsite maintenance staff. BC Tammy Brook will replace heating and hot water systems with high-efficiency systems, install low-flow water fixtures in kitchens and bathrooms, upgrade electrical systems, update smoke detector and carbon monoxide detector systems, install new roofs and convert the laundry facility and maintenance office into a handicapped-accessible management office and community space.