WASHINGTON, D.C. – December 27, 2001
The Federal Housing Finance Board in today’s Federal Register published a proposed rule that would amend the regulation of its Affordable Housing Program (AHP) to improve its operation and effectiveness. The proposed changes include allowing the Federal Home Loan Banks (FHLBs) to award scoring points to projects applying for AHP subsidy which use federal government properties and allowing FHLBs additional time after completion of a rental project to review the documentation relating to project compliance. The Finance Board will accept written comments on the proposed rule through February 25.
WASHINGTON, D.C. – December 26, 2001
The Internal Revenue Service (IRS) and Treasury Department today published temporary regulations providing guidance for taxpayers claiming the new markets tax credit (NMTC) under section 45D of the Internal Revenue Code. For more information about the NMTC program and the regulations that went into effect today, visit www.newmarketscredits.com.
WASHINGTON, D.C. – December 20, 2001
The U.S. Department of the Treasury yesterday announced the official opening of the $15 billion New Markets Tax Credit (NMTC) program, which was signed into law as part of the Community Renewal Tax Relief Act on December 21, 2000. The Community Development Financial Institutions (CDFI) Fund, which will administer the program, today issued guidance on the community development entity (CDE) certification process and a request for CDE applications. Guidance on the tax credit allocation process and applications for tax credit allocation will be published early next year. For more information, click here.
WASHINGTON, D.C. – December 19, 2001
Starts of new housing rose by 8.2 percent in November to a seasonally adjusted rated of 1.65 million units, the Commerce Department reported yesterday. Multifamily housing starts rose by more than 28 percent to 384,000 units - their highest rate since March of this year. The National Association of Home Builders (NAHB) credits the strong increase to optimism among builders, continuing low interest rates and better than average weather conditions.
SACRAMENTO, Calif. - December 14, 2001
The California Tax Credit Allocation Committee today released its proposed Draft Regulations for 2002 for implementing the federal and state low-income housing tax laws. The public comment period on these proposed regulations will run through January 14, 2002, and two public hearings will be held, on January 8 and 9. To view the draft regulations, or for details on the public comment period, click here.
HONOLULU, Hawaii – December 13, 2001
In response to an economic decline caused by a lack of tourism following the September 11 attacks, the Hawaii legislature held a special session and last month passed legislation allowing for a temporary additional tax credit to help boost the construction industry. The 4 percent credit is applicable to construction or remodeling costs up to $250,000 per unit before July 1, 2002 for residential property, including affordable housing projects. The credit will be administered through the Hawaii Department of Taxation. To view the bill, click here.
WASHINGTON, D.C. – December 11, 2001
Armando Falcon, Jr., director of the Office of Federal Housing Enterprise Oversight (OFHEO) today announced improvements to OHFEO’s risk-based capital rule, which was published September 13 in the Federal Register. The final rule prompted concern from affordable housing professionals that interest from government sponsored entities (GSEs) in housing finance agency (HFA) bonds may be diminished by a provision that would enforce counterparty discounts. Falcon said the modifications were meant to improve the ability of the rule to closely tie capital to risk. To view the proposed changes, click here. The complete risk-based capital rule is available at www.ofheo.gov. For analysis of the risk-based capital rule, read Novogradac & Company LLP’s “Article of the Month.”
WASHINGTON, D.C. – December 10, 2001
A study released last week by Rep. Mark Green (R-Wis.) found that proposed legislation to allow Ginnie Mae a broader role in mortgage markets would revitalize the Federal Housing Administration (FHA) and give the FHA and Ginnie Mae net income gains of more than $200 million annually. The study, “An Analysis of Ginnie Mae Choice,” was written by economists Ann B. Schnare, former Vice President for Housing Economics and Financial Research at Freddie Mac, and Susan E. Woodward, previously chief economist and deputy assistant secretary at HUD, and examines the impact of House Resolution 3206 by Rep. Marge Roukema (R-N.J.), and Senate Bill 1620 by Sen. Wayne Allard (R-Colo.). For copies of the proposed legislation, click here.
WASHINGTON, D.C. – December 7, 2001
A group of democrats including New York Comptroller H. Carl McCall and California Treasurer Philip Angelides met this week as part of a lobbying effort to urge the federal government to boost infrastructure investment by guaranteeing certain state bonds. An overview of the group’s policy views, which include an increase in the limits on the amount of bonds states can sell for affordable housing, can be found in “Rebuilding America: Economic Recovery Through Capital Investments For The Future.” For more information, click here.
WASHINGTON, D.C. – December 6, 2001
The U.S. Department of Housing and Urban Development (HUD) today announced a final rule that will take effect January 7 and implement sections 561 and 562 of the Multifamily Assisted Housing Reform and Affordability Act of 1997, which concern HUD’s ability to impose civil money penalties. Section 562 authorizes HUD to impose civil money penalties for violations of Section 8 project-based housing assistance payments contracts.
WASHINGTON, D.C. – December 4, 2001
House Ways and Means Committee Chairman Bill Thomas (R-Calif.) yesterday announced that House and Senate leaders have reached an agreement on procedures for a conference on economic stimulus legislation. The House in October passed its version of an economic stimulus bill, H.R. 3090, which would repeal the corporate alternative minimum tax. In his announcement, however, Thomas did not mention any specifics of the compromise legislation except to promise that it “would offer real help to unemployed Americans.” Conferees were to be named today.
WASHINGTON, D.C. – December 3, 2001
A joint effort by the Smart Growth Network (SGN) and the National Neighborhood Coalition (NNC) last week yielded “Affordable Housing and Smart Growth: Making the Connection,” a new report which found that policies that expand the quality, supply and distribution of affordable housing can also promote smart growth. The report features 19 approaches that represent a range of options for the public, private and nonprofit sectors to pursue both smart growth and affordable housing goals. To view a copy of the report, click here.
COLUMBIA, S.C. – November 30, 2001
The North Carolina Court of Appeals reversed a decision of the Property Tax Commission that affirmed the ad valorem tax valuation of a property in Durham County. The case was remanded to the commission, which may either hold a new hearing to redetermine the value of the property in question or remand the matter to the county. In either event, the court ruled that the method used for the redetermination must take into account the market standard for property restricted by the requirements of § 42. For more information, click here.
WASHINGTON, D.C. -- November 29, 2001
On November 26 the Internal Revenue Service (IRS) clarified that some investments in qualified community development entities (CDEs) may be eligible for the New Markets Tax Credit (NMTC), even if made prior to the formal issue of a credit allocation to the qualified CDE. IRS Notice 2001-75 responded to questions as to whether an equity investment in an entity could be eligible for designation as a qualified investment if it is made prior to the CDE's certification and before it is allocated credits. The IRS has said that while the investments may be eligible for the tax credits, those credits cannot be claimed until the CDE has entered a formal agreement with the government. More information about the NMTC program and IRS Notice 2001-75 can be found at www.newmarketscredits.com.
WASHINGTON, D.C. - November 28, 2001
The Internal Revenue Service (IRS) this month issued a series of Private Letter Rulings (PLRs) regarding buildings financed with tax-exempt bonds. In PLRs 200147008 to 200147011, the IRS ruled that the redemption of tax-exempt bonds at any time on or after the date that a low-income housing project has been placed in service under § 42 does not preclude the classification of the project under § 42(h)(4)(B). For these and other relevant IRS rulings, click here.
WASHINGTON, D.C. – November 26, 2001
The U.S. Department of Housing and Urban Development (HUD) today released revised Annual Adjustment Factors (AAFs) for the Section 8 Housing Assistance Payment Program, effective October 1, 2001. The AAFs are used to adjust contract rents and are based on residential rent and utility cost changes from the most current Bureau of Labor Statistics Consumer Price Index and HUD’s rent change surveys. To view the HUD Notice, click here.
SACRAMENTO, Calif. - November 21, 2001
The Staff of the California State Board of Equalization recently proposed changes to the Assessors’ Handbook Section 267, “Welfare, Church, and Religious Exemptions,” which concerns the availability of the property tax exemption for affordable housing projects. Comments on the proposed changes - the clarification of phrasing as well as certain statutory changes - will be accepted through December 17. For more information, click here.
WASHINGTON, D.C. – November 20, 2001
Starts of new housing dropped by 1.3 percent in October to a seasonally adjusted rated of 1.55 million units, the Commerce Department reported yesterday. Reflecting the recent economic downturn, single-family housing starts dropped 1.2 percent and multifamily housing starts fell 1.6 percent. The National Association of Home Builders (NAHB) last week announced, however, the building industry has started to rebound. NAHB’s monthly Housing Market Index (HMI) rose two points this month, after recording its single largest monthly drop of nine points in October.
WASHINGTON, D.C. – November 19, 2001
Rep. Nancy Johnson (R-Conn.) on Friday introduced legislation that would reverse rulings in five Internal Revenue Service technical advice memoranda (TAMs) excluding impact fees from the eligible basis of a low-income housing tax credit project. House Resolution 3324 is co-sponsored by Reps. Charles Rangel (D-N.Y.), Mark Foley (R-Fla.) and Gary Miller (R-Calif.) and has been referred to the Ways and Means Committee. To view a recent draft of the legislation, click here. A copy of the final bill will be posted as soon as it is published by the Library of Congress.
SACRAMENTO, Calif. – November 15, 2001
California’s recently ended legislative session saw passage of numerous bills that will impact the affordable housing industry. For a comprehensive wrap-up of the state's legislation, including those bills that failed, refer to the report, “Affordable Housing Legislative Review,” by Stephen Ryan, chairman of the affordable housing practice group at McCutchen, Doyle, Brown & Enersen, LLP. To view the report, click here.
WASHINGTON, D.C. – November 14, 2001
The Internal Revenue Service (IRS) yesterday published bond factor amounts for October through December (Rev. Rul. 2001-53). The revenue ruling provides the amounts used to calculate the amount of bond considered satisfactory under § 42 (j)(6) regarding disposition of qualified low-income buildings and interests therein. To view the updated figures, click here.
AUSTIN, Texas – November 13, 2001
The Texas Department of Housing and Community Affairs (TDHCA) Board of Directors meets tomorrow to approve a final draft of its 2002 Qualified Allocation Plan (QAP). To help applicants prepare their pre-applications and applications for the highly competitive tax credit allocation process, Novogradac & Company LLP is offering two intensive, one-day Tax Credit Application workshops -- in Dallas on December 11 and in San Antonio on December 18. To view Texas’ and other states' 2002 Draft QAPs, click here.
WASHINGTON, D.C. – November 12, 2001
The Senate Finance Committee last week approved the “Economic Recovery and Assistance for American Workers Act of 2001,” a Democrat-sponsored $66.4 billion economic stimulus package. The House last month approved House Resolution 3090, the $100 billion Republican stimulus plan, which would repeal the corporate alternative minimum tax and could stimulate demand for tax credits and tax-exempt bonds. President Bush has requested that Congress reach an agreement for an economic stimulus package by month’s end.
WASHINGTON, D.C. – November 9, 2001
A group of the nation’s mayors met this week with Tom Ridge, Director of the Office of Homeland Security, to follow-up on their appeal for a national plan that would include doubling the allocation of low-income housing tax credits and lifting the cap on state and local tax-exempt bonds. These measures are part of a sweeping set of recommendations, issued last month at the U.S. Conference of Mayors’ Emergency Safety and Security Summit, that call for improving security and stimulating the economy through strategic investments in the nation's infrastructure. For more information, click here.
SACRAMENTO, Calif. – November 8, 2001
With approximately $70 million in funding available in its Multifamily Housing Program, the California Department of Community Development (HCD) is holding four application workshops this month to assist project owners and developers: tomorrow's workshop will be held at the Ronald Reagan State Building in Los Angeles; Nov. 13's at the San Diego State Building in San Diego, Calif.; Nov. 16's at HCD Headquarters in Sacramento, Calif.; and Nov. 19's at the SF Civic Center Complex, Hiram Johnson Building in San Francisco.
WASHINGTON, D.C. – November 7, 2001
A House-Senate conference committee yesterday approved a final version of House Resolution 2620, the fiscal year 2002 appropriations bill for the U.S. Departments of Veterans Affairs (VA) and Housing and Urban Development (HUD). H.R. 2620 grants a total of $30 billion in budget authority to HUD, including full funding for Section 8 contract renewals and funds for 26,000 incremental vouchers. It provides $1.846 billion for the HOME investment partnerships program as well as $574 million to HOPE VI. The bill also raises Federal Housing Administration (FHA) multifamily mortgage limits by 25 percent and authorizes a new hybrid FHA adjustable-rate mortgage program.Both houses of Congress must now approve the final bill before it can be sent to President Bush. To view H.R. 2620 and other affordable housing legislation, click here.
WASHINGTON, D.C. - November 6, 2001
Legislation introduced last week would expand Ginnie Mae (Government National Mortgage Association) and allow it a broader role in mortgage markets. Senate Bill 1620, sponsored by Sen. Wayne Allard (R-Colo.), and House Resolution 3206, introduced by Rep. Marge Roukema (R-N.J.), would put Ginnie Mae in direct competition with Fannie Mae and Freddie Mac and could increase affordable housing opportunities. Ginnie Mae currently backs only home loans guaranteed or insured by government agencies. To view the legislation, click here.
WASHINGTON, D.C. – November 5, 2001
Organizations including the National Association of Home Builders (NAHB) and American Consumers for Affordable Housing (ACAH) held a briefing today regarding the U.S. Department of Commerce’s preliminary ruling to impose anti-dumping duties on Canadian lumber imports. The NAHB says the decision would harm housing affordability, estimating that a 32 percent lumber tariff – a 12.6 percent anti-dumping tax plus a 19.3 percent countervailing tax approved in August - could add as much as $1,500 to the cost of building a new home.
WASHINGTON, D.C. – November 2, 2001
The National Low Income Housing Coalition (NLIHC) this week reported that an informal survey of housing agencies suggests that new federal spending on affordable housing could provide a boost to the economy. A group of Democratic senators is proposing the inclusion of $4.1 billion for housing in the economic stimulus package currently being considered in Congress, but opponents of the proposal argue that housing money could not be spent fast enough to affect the current economic downturn. For the full NLIHC statement, click here.
NEW YORK – October 31, 2001
Moody’s Investors Service (Moody’s) reports that despite an economic slowdown, tax-exempt housing bond issuers, particularly state housing finance agencies (HFA), are stronger than ever. Moody’s asserts that the $15 billion combined fund balance for state HFAs and their 13 percent median profitability ratio should allow them to “easily withstand” some of the negative effects of the sagging economy, and consequently predicts a stable outlook for the state HFA industry. For more information about state tax-exempt bond allocating agencies, click here.
WASHINGTON, D.C. – October 30, 2001
The Federal Home Loan Bank of Atlanta (FHLBA) has announced the award of grants to several affordable housing ventures in the District of Columbia and surrounding areas. In Washington, FHLBA awarded a total of $925,000 to four local community partnerships, in Virginia eight partnerships will split $1.8 million and two communities in Maryland will receive a sum of about $1 million. The grants come from FHLBA’s affordable housing program and will be used to develop and rehabilitate very low- to moderate-income housing units.
WASHINGTON, D.C. – October 25, 2001
Economists and housing representatives at the National Housing Center this week said the nation’s home building industry is expected to hold up fairly well in the face of a decline in economic growth. Fannie Mae Chief Economist David Berson said the decade, as a whole, would in fact be one of the strongest for housing growth.
TORONTO, Canada – October 24, 2001
The Mortgage Bankers Association of America (MBA) last week released a list of priority policy recommendations as part of the organization's overall national policy agenda. A plan to increase development of affordable rental housing in order to spur economic investment is included in the proposals MBA will take to Congress. The goals are intended to boost consumer confidence while increasing activity in the housing market.
SACRAMENTO, Calif. – October 23, 2001
The California Tax Credit Allocation Committee last week issued new procedures affecting the 10 percent carryover test. Under the revision, applicants may be allowed to submit evidence that the test was met after year-end deadlines. However, even if applicants request the six-month extension, they must still submit an application, evidence of land purchase or lease, applicable exhibits and fee payment by November 1, 2001. To review the changes, click here and follow the California link.
WASHINGTON, D.C. - October 22, 2001
Senate Bill 1554, authored by Max Cleland (D-Ga.) and sent last week to the Senate Finance Committee, would amend the Internal Revenue Code to provide an increased low-income housing credit for property located immediately adjacent to Qualified Census Tracts (QCTs). Speaking to participants at Novogradac & Company LLP’s 8th Annual Affordable Housing Conference last week in San Francisco, managing partner Michael J. Novogradac announced that the new QCTs and Difficult to Develop Areas (DDAs) had been released recently with 30 percent new bonus areas added for LIHC properties. QCTs usually change once every 10 years, but this year was an exception, said Novogradac, noting a change that now defines a QCT as a census tract in which 50 percent of the households have incomes below 60 percent of area median gross income or a poverty rate of 25 percent or more. Additional QCTs and DDAs will be released next year, said Novogradac.
SAN FRANCISCO, Calif. – October 18, 2001
Speaking to participants at Novogradac & Company LLP’s 8th Annual Affordable Housing Conference that opened today in San Francisco, David Gasson, vice president of public affairs for Boston Capital, outlined some of the affordable housing issues before lawmakers, who in the last few days have found themselves shifting their focus to matters of national security after anthrax spores showed up in their offices.
Distracted lawmakers are working from home district offices and makeshift spaces in Capital Hill hallways, said Gasson, attempting to address affordable housing matters that include the five Technical Advice Memoranda (TAMs) that the Internal Revenue Service issued a year ago. Congressional white knights Rep. Nancy Johnson (R. Conn.) and Rep. Charles Rangel (D-N.Y.) are championing the industry cause on TAM matters. “We’re trying to get the legislation through soon, but I’m not holding much hope [for quick passage],” Gasson said.
Also on lawmaker plates is the Economic Stimulus Package, a $160 billion partisan version of which passed the U.S. House of Representatives earlier this week. Economic stimulus issues that could affect the affordable housing industry are proposals for a 5-year carryback on net operating losses (NOL) and the repeal of the corporate alternative minimum tax (AMT) and making the AMT credit for corporations refundable. Gasson said the $160 billion House package has “no chance of going anywhere.” If anything, he added, a $45 billion to $65 billion package might have a 50/50 chance of success. “The business in the deepest trouble now is the U.S. government,” he noted.
WASHINGTON, D.C. – October 17, 2001
Starts of new housing rose 1.7 percent in September to a seasonally adjusted annual rate of 1.574 million, the Census Bureau reported today. National Association of Home Builders (NAHB) President Bruce Smith attributes some of the strong showing to a rebound in the multifamily sector, which increased 6.3 percent from the previous month. The NAHB yesterday announced that its Housing Market Index (HMI), an indicator for single-family housing, dropped eight points in October, from 54 to 46. This was the largest single month's decrease since NAHB started compiling the HMI in 1985.
WASHINGTON, D.C. – October 16, 2001
The National Association of Home Builders’ (NAHB) last week released a statement reaffirming its support for the statutory income requirements of the Low Income Housing Tax Credit (LIHC) program. NAHB is also recommending the creation of a new program to help working families with incomes between 60 and 100 percent of the median income, which often pay more than half their incomes for housing but are not currently served by a federal housing program.
SACRAMENTO, Calif. – October 15, 2001
Gov. Gray Davis yesterday signed S.B. 975, which significantly expands the application of prevailing wage laws to public projects, including affordable housing. Last week, Davis signed eight other pieces of affordable housing legislation, including: A.B. 637, A.B. 807, S.B. 73, S.B. 211, S.B. 459, S.B. 520, S.B. 891, and S.B. 985.
WASHINGTON, D.C. – October 12, 2001
Fannie Mae announced yesterday that U.S. Bank/Firstar Home Mortgage has been approved as a national Fannie Mae servicer of mortgages originated as part of the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Homeownership Program. Fannie Mae Vice President for Housing and Community Development Julia Gould said Fannie Mae’s partnership with U.S. Bank/Firstar should help efforts to facilitate the participation of more lenders in the Section 8 Homeownership Program.
LOS ANGELES – October 11, 2001
Bank of America announced last week a $10 million investment in the Low Income Housing Fund (LIHF). The investment will be added to LIHF’s $74 million Revolving Loan Fund and will be used to develop affordable housing among other projects, including special needs housing and community centers. LIHF is a national community development organization aimed at assisting nonprofit groups working to increase the supply of affordable housing and special needs housing in low-income neighborhoods.
WASHINGTON, D.C. - October 10, 2001
According to the National Low Income Housing Coalition’s annual report, “Out of Reach,” released last week, in no single jurisdiction in the United States can minimum wage workers afford the fair market rent for homes in their communities. The report found that to afford the median fair market rent for a two-bedroom rental unit, a worker would have to earn $13.87 per hour, which is equivalent to 269 percent of the federal minimum wage, or work 108 hours a week earning $5.15, the federal minimum wage.
SACRAMENTO, Calif. - October 9, 2001
The State of California Department of Housing and Community Development (HCD) last week released “Pay to Play, Residential Development Fees in California, 1999,” a report analyzing California’s residential development fees. The report uses findings from a 1999 survey of 89 California cities and counties to identify typical residential development fee amounts, and provides examples of how local governments could improve administration of permit fees. To view the report, click here.
WASHINGTON, D.C. - October 4, 2001
The Internal Revenue Service’s Tax Exempt Bonds (TEB) office reported this week that it found a high rate of non-compliance among issuers and users of tax-exempt bonds during examinations of arbitrage rebates and small issue bonds. TEB conducted field examinations of 104 bonds issued in 1991 and 1992 and found problems in 24 cases. According to the TEB office, of the 24 cases with violations, 17 involved new bond issues and seven involved refunding of bonds.
WASHINGTON, D.C. -- October 3, 2001
The Federal Housing Finance Board announced today amendments to its regulation governing the operation of its Affordable Housing Program (AHP). The amendments are effective Nov. 2 and are aimed at improving the operation and effectiveness of the AHP.
WASHINGTON, D.C. - October 2, 2001
The Department of Housing and Urban Development (HUD) published fiscal year (FY) 2002 Fair Market Rents (FMRs) yesterday. According to HUD, the FMR for an area is the amount that would be needed to pay the gross rent of privately owned, decent, safe and sanitary rental housing. The FY 2002 FMRs went into effect yesterday, the start of FY 2002. FMRs are used for programs such as the Housing Choice Voucher program among others.
WASHINGTON, D.C. – September 28, 2001
A recent study released by HUD examines how effective the Home Investment Partnerships Program (HOME) has been in providing affordable rental housing. The goal of HUD’s research was, in part, to determine the proportion of HOME-assisted rental units that were within affordability standards at least two years after initial occupancy.
SACRAMENTO, CALIF. – September 27, 2001
After nearly $150 million was left on the table at the California Debt Limit Allocation Committee (CDLAC) meeting in August, the Committee voted this month to hold a third round to allocate the remaining funds. The timing of the third round was structured so that those 9 percent projects that were unsuccessful in the California Tax Credit Allocation Committee’s round awarded September 17 could apply for CDLAC funding yet this year. The deadline for third-round applications is October 4, with the Allocation Meeting scheduled for December 13.
WASHINGTON, D.C. – September 26, 2001
The House and Senate have reached an agreement to extend the life of the Office of Multifamily Housing Assistance Restructuring (OHMAR) to October 30, 2004, according to a spokesman for the Senate Banking, Housing and Urban Affairs Committee. The agreement has cleared the way for what is expected to be a swift approval a compromise measure that would also authorize the Section 8 Mark-to-Market program to continue until October 30, 2006. OHMAR, an independent branch of HUD, was slated to dissolve unless it was extended by September 30. To view relevant legislation, click here.
SACRAMENTO, CALIF. – September 25, 2001
SB 975, which requires any projects financed through Industrial Development Bonds issued by the California Infrastructure and Economic Development Bank must comply with existing laws pertaining to prevailing wages, has passed both houses of the California Legislature. The bill greatly expands the application of prevailing wage laws to public works projects, including affordable housing. Governor Gray Davis is expected to sign the bill into law. For a copy of the legislation, click here.
SACRAMENTO, CALIF. – September 24, 2001
Three bills passed during the recently ended California legislative session hold potential for a positive impact on the affordable housing industry. S.B. 73 increases the state low-income housing tax credit from $50 million to $70 million annually and allows for the credit to be indexed to inflation. S.B. 211 increases from 20 percent to 30 percent the housing set-aside for redevelopment agencies seeking to extend their redevelopment projects’ existence and A.B. 637 requires all redevelopment funds be used in proportion to the actual housing needs of the community. For copies of the bills , click here.
SACRAMENTO, CALIF. – September 21, 2001
Meeting in Sacramento on September 17, the California Tax Credit Allocation Committee (TCAC) awarded $52,408,050, less $21,339,138 allocated to setasides, in federal tax credits and $34,565,861 in state tax credits to 67 applicants. Projects for families received the lion’s share of the tax credits ($22,885,876), followed by housing for seniors ($8,322,383). San Diego County received the greatest amount of federal tax credits ($5,498,413) and Orange County won the largest share of state credits ($5,809,559).
WASHINGTON, D.C. – September 20
Due primarily to a drop-off in multifamily production, nationwide housing starts declined 6.9 percent in August to a seasonally adjusted annual rate of 1.53 million units, according to a Commerce Department report released today. The National Association of Home Builders notes that today's report indicates that prior to the September 11 terrorist attacks, the nation's housing market was operating at a strong, but somewhat slower pace than it had been in the first half of 2001, but above the pace set in the same period last year.
SAN FRANCISCO – September 15, 2001
Novogradac & Company LLP, in consultation with its co-sponsors Sonnenschein, Nath & Rosenthal, Simpson Housing Solutions LLC, Columbia Housing Corporation (a subsidiary of PNC Bank), and PW Funding/Kasper Mortgage Capital, after thoughtful consideration, has postponed the 8th Annual Affordable Housing Conference, scheduled to be held in San Francisco, September 20-22. The Conference and the Pre-Conference Workshop will be rescheduled for the end of October.
"We appreciate everyone’s understanding of our decision," said Michael Novogradac, managing partner of Novogradac & Company LLP, "and recognize that many of you want to remain close to home with family and friends, remembering those who so tragically lost their lives in New York, Washington, D.C. and Pennsylvania. The business of learning how best to build affordable housing for our Nation’s needy, while truly important, will wait as our Nation recovers from the terrible events of September 11.
"Out of respect for our Nation’s suffering from the tragedies of the last week, and upon reflection on the difficulties of air travel in the coming days," added Novogradac "we concluded that this decision will allow our Nation more time to heal, give the airlines and airports more time to return to more predictable and regular schedules, and give citizens and businesses more time to begin to return to their familiar routines."
Additional details on the rescheduled Conference date will be forthcoming the end of this week.
Novogradac & Company LLP also wants to express its thanks to all those who have given their time to the rescue efforts. Novogradac & Company LLP’s partners and employees are contributing to victim relief funds in New York City and Washington, D.C., and would like to share that information with you:
Community Foundation for the National Capital Region -Survivors’ Fund,
WASHINGTON, D.C. – September 11, 2001
HUD published a notice in today's Federal Register designating difficult development areas and qualified census tracts for the low-income housing tax credit program. Projects in those areas and census tracts can get a 30 percent increase in eligible basis. Click here for the text and list of QCTs. Learn more about difficult development area designations and qualified census tracts at Novogradac & Company’s 8th Annual Affordable Housing Conference to be held in San Francisco September 20 –22 at San Francisco’s Hotel Nikko.
WASHINGTON, D.C. - September 6, 2001
Nineteen states will share $896,929 in low-income housing tax credits from the 2001 national pool of unused carryover credits. Texas received the largest allocation, $153,575, followed by Florida, $117,712, and Illinois, $91,469. The Internal Revenue Service announced the pool allocations in Rev.Proc. 2001-44, which was published in the August 27 Internal Revenue Bulletin. For a list of states' allocations in IRS Bulletin 2001-35, click here.
WASHINGTON, D.C. - September 4, 2001
The General Accounting Office on July 31 released its interim findings on the costs of various federal housing programs, including the low-income housing tax credit and HUD voucher programs. A final report is due in mid- to late-October. An analysis of the Congressionally mandated study compares total per-unit costs of the various housing assistance programs. For the GAO’s response to the mandate in the Quality Housing and Work Responsibility Act of 1998, click here.
SACRAMENTO, Calif. -- August 31, 2001
The California Debt Limit Allocation Committee (CDLAC) staff has approved revisions to Sections 19 and 20 of its procedures, effective August 22, 2001. All applications must include a new addendum to be considered for the rental project pool allocation. CDLAC is the agency responsible for allocating tax-exempt bonds for affordable housing projects. There also is information on CDLAC’s web site pertaining to commitment letters for credit enhancement and a description of the proposed market area as required by the procedures.
AUSTIN, Texas -- AUGUST 28, 2001
The Texas Department of Housing and Community Affairs awarded $7 million in funding to 30 not-for-profit and for-profit housing entities through its Housing Trust Fund and the HOME Investment Partnership Program. $3.2 million was allocated to 13 housing entities that will create or preserve 1,182 units of affordable housing in 12 Texas cities. Another 13 were awarded a total $562,000 to obtain technical assistance for increasing their ability to produce affordable housing efficiently and effectively. $1.9 million was awarded to four developers for the preservation of 165 units of affordable or subsidized rental housing through acquisition or acquisition and rehabilitation of existing affordable multifamily properties.
SACRAMENTO, Calif. - August 27, 2001
Taking advantage of an undersubscribed second round, the California Debt Limit Allocation Committee staff on September 6 will ask Committee members to hold a third round of rental project allocations for 2001. About $150 million in private activity bonds remains from the second round of funding, which took place on August 22. CDLAC executive director Laurie Weir says if the Committee approves the request, she anticipates applications will be due the first week of October with allocations made the second week in December.
WASHINGTON, D.C. -- August 23, 2001
HUD, which under the 2000 Tax Act is authorized to designate as many as 40 renewal communities, including at least 12 in rural areas, is inviting applications for the designation. Applications should be submitted by October 12 by the state and local governments that have jurisdiction over the nominated area, or the governing body for areas on Indian reservations. The renewal communities will be eligible for special tax incentives for economic revitalization. Regulations for the program were published in the Federal Register on July 9.
SEATTLE, Wash. -- August 20, 2001
Standard & Poor’s (S&P) has upgraded the King County Housing Authority’s bond rating from “A” to “A+” on the $4 million in tax-exempt bonds that were issued for the purchase of Fairwood Apartments in unincorporated King County, near Renton, Wash. This is the fourth KCHA bond issue (out of four) to be upgraded to an A+ under S&P’s Affordable Housing Program criteria.
SACRAMENTO, Calif. - August 17
Governor Gray Davis today signed AB 1044 by Assemblymember Carole Migden (D-San Francisco), which provides an increase of $2.2 billion in funding for the California Housing Finance Agency (CHFA). The extra funding brings the agency's debt capacity to $11.15 billion from $8.95 billion. The increase authorized by this legislation will help CHFA finance affordable housing for 19,000 families. For more information on CHFA, click here.
WASHINGTON, D.C. - August 16, 2001
Falling interest rates, rising home prices, and strong underlying demand continue to fuel the housing sector amid broad economic weakness, as housing starts rose 2.8 percent in July from the previous month to a seasonally adjusted annual rate of 1.67 million, the Commerce Department reported today. Single-family starts rose 1.5 percent to a seasonally adjusted annual rate of 1.3 million, and multifamily starts posted a 7.6 percent gain to stand at 368,000 units. Building permits, which can be an indicator of future building activity, declined 1.8 percent overall. Single-family permits were down 1.9 percent while the multifamily side remained flat.
SAN FRANCISCO - August 15, 2001
The Federal Home Loan Bank of San Francisco announced that approximately $18.1 million will be made available in the second round of the 2001 Affordable Housing Program (AHP) competition. The application deadline for the round is Oct. 1, 2001. The AHP is used to provide grants and subsidized loans for single-family and multifamily projects targeting low- to moderate-income households. To access AHP application materials and related information, click here.
CROWNSVILLE, Md. -- August 13, 2001
The Maryland Department of Housing and Community Development Department (DHCD) completed its Spring 2001 competitive round and on July 31 announced that 12 of 27 project requests had been selected to receive $10,043,688 of Rental Housing Funds and $5,002,383 of Low Income Housing Tax Credits. Requests of almost $21 million of Rental Housing Funds (including $10,680,688 from non-entitlement areas for federal HOME funds) and $16 million of Tax Credits were received. DHCD has moved the date for the Fall 2001 round to Oct. 26, 2001. The proposed changes will be posted to the DHCD website as soon as they are available. Oral and written comments are being accepted and the required public hearing for the QAP is scheduled for mid-September.
DES MOINES, Iowa -- August 9, 2001
The Iowa Finance Authority on August 1 approved $44.4 million in tax credits for 15 projects in 11 communities. The projects are expected to provide 516 affordable rental units for families, the elderly and special needs populations. Forty-four for-profit and not-for-profit developers had requested more than $119 million in tax credits. In conjunction with the awarding of tax credits, the Iowa Department of Economic Development approved $5.1 million in federal HOME funds for nine of the successful applicants.
WASHINGTON - August 8
On August 1, the Senate Banking Committee approved S. 1254, which would reauthorize the Multifamily Assisted Housing Reform and Affordability Act of 1997. The bill would extend the Section 8 Mark-to-Market program for five years. S. 1254 and H.R. 2589, a House bill that would extend Mark-to-Market for three years, would bring the Office of Multifamily Housing Assistance Restructuring (OMHAR) under the Federal Housing Administration. In addition, the Senate bill would expand HUD’s power to determine which projects would be subject to the Mark-to-Market program, as well as determine those projects’ rents. Sen. Wayne Allard (R-Colo.) offered an amendment that would require the General Accounting Office to provide annual evaluations of the program.
WASHINGTON - August 6
By a vote of 94 - 5, the Senate on August 2 passed the FY 2002 VA, HUD and Independent Agencies Appropriations bill (H.R. 2620). The House or Representatives approved the bill on July 31by a vote of 336 - 89. Conferees will take up the bill after they return from recess on September 4. Senate conferees are Sen. Barbara Mikulski (D-Md.), Patrick Leahy (D-Vt.), Tom Harkin (D-Iowa), Robert Byrd (D-W.Va.), Herb Kohl (D-Wis.), Tim Johnson (D-S.D.), Ernest Hollings (D-S.C.), Daniel Inouye (D-Hawaii), Christopher Bond (R-Mo.), Conrad Burns (R-Mont.), Richard Shelby (R-Ala.), Larry Craig (R-Idaho), Pete Domenici (R-N.M.), Mike DeWine (R-Ohio), and Ted Stevens (R-Alaska). The House has yet to name its conferees.
ATLANTA - August 3
In its ongoing effort to increase the nation's supply of affordable housing, the Federal Home Loan Bank of Atlanta recently announced $18.6 million in Affordable Housing Program (AHP) grants to develop rental and owner-occupied housing for thousands of low- and moderate-income families in 11 states and the District of Columbia. The awards will create or rehabilitate 3,594 affordable-housing units in Alabama ($976,000 for 210 units), Florida ($4.2 million for 783 units), Georgia ($3.2 million for 516 units), Louisiana ($155,000 for 25 units), Maryland ($1million for 196 units), North Carolina ($3.9 million for 742 units), Pennsylvania ($265,000 for 45 units), South Carolina ($588,000 for 90 units), Tennessee ($1 million for 182 units), Texas ($530,000 for 83 units), Virginia ($1.8 million for 419 units), and the District of Columbia ($925,000 for 303 units).
AUSTIN - August 1
The Texas Department of Housing and Community Affairs (TDHCA) yesterday allocated Low-Income Housing Tax Credits for 64 projects totaling $27,534,046. “The [TDHCA] Board approved fairly close to the original recommendations, with a few changes,” says Jeff Crozier, a manager with the Austin, Texas office of Novogradac & Company LLP. One of those changes was the replacement of the 96-unit, $766,065 River Glen project in Wichita Falls with the 112-unit, $786,341 Parkstone Crossroads Apartments. Of the 5,485 total units the Board approved for development, 4,425 are low income. The number of original applications for the state’s $31 million tax credits allocation was 162 for a total request of $91, 330,307. For more information on the applicants and awards, click here.
WASHINGTON, D.C. - July 31
On a vote of 336 to 89, the House today passed H.R. 2620, the FY 2002 VA-HUD and Independent Agencies appropriations bill. The Senate hopes to vote yet this week, before the month-long summer break, on its version (S. 1216). The House and Senate will conference when they return in September to compromise on a final version of the bill. Earlier, the House defeated two amendments to its appropriations measure. In a 214 to 197 vote, an amendment by Rep. Marcy Kaptur (D-Ohio) would have taken $175 million from the increase allotted for the HOME program's Homeownership Initiative and used it for the Drug Elimination Grant Program. The other amendment, offered by Rep. Barney Frank (D-Mass.), would have eliminated the $200 million increase in HOME funds earmarked for the Administration's Downpayment Assistance Initiative and placed it in the HOME formula amount. That vote was 247 to 163.
SEATTLE - July 27
The Federal Home Loan Bank of Seattle announced that eight projects were selected from a record number of applications to receive a total of $10,000 each in Challenge Fund grants. The revolving fund provides grants to financial institutions to pay for predevelopment expenses associated with affordable housing. The selected projects are located in Idaho, Utah, Hawaii, Montana and Alaska and include 348 units of worker housing, 154 units of low-income and senior housing and 12 units for homeless families. The bank also awarded $6.5 million in Affordable Housing Program grants to 29 projects selected from a record 135 applications received for the AHP's first funding round this year. The 29 projects total 1,066 units and range from a $10,000 grant for a Habitat for Humanity development to an $880,000 grant to help purchase 220 affordable homes for families transitioning from rental to homeownership. Thirteen of the projects serve homeless, nine serve native people, 10 preserve Section 8, LIHTCs or USDA 515 projects and two serve farm workers. For more on the FHLB programs and recipients, click here.
WASHINGTON - July 25
The AFL-CIO Housing Investment Trust (HIT) is forming a new national housing production relationship with Lend Lease Mortgage Capital and Fannie Mae designed to leverage $1 billion of investment capital to finance the production of between 5,000 and 7,000 rental units in major cities across the country. The initiative will target 30 percent of these units to low- and moderate-income households. HIT, as it corresponds to Lend Lease, plans to invest more than $750 million in the production program over the next five years. In the last decade HIT worked through the Fannie Mae DUS program to create 4,000 units in 24 projects with total development costs of over $500 million and HIT investment of $205 million. Approximately 85 percent of these projects were constructed for low-income households using low-income housing tax credits and other public subsidies. For more on HIT click here.
WASHINGTON, D.C. - July 20
With favorable financing and healthy price increases buoying demand, the housing market continued to show resilience with housing starts up 3 percent in June. Multifamily starts grew by 9.3 percent and single family construction moved up by 1.4 percent. The Commerce Department reports the seasonally adjusted annual rate was 1.658 million for the month, with second-quarter total starts averaging 1.631 million units. That’s slightly better than the 1.672 million in the first quarter. The National Association of Home Builders is forecasting 1.59 million housing starts for 2001, up about 1 percent from last year. Housing starts for the first six months of 2001 were up 0.5 percent over the same period a year ago.
Washington, D.C. -- July 19
Sen. Robert Torricelli (D-N.J.) has introduced legislation intended to spur public-private partnerships by providing tax credits for the development of low-to-moderate single-family homes, including condominiums and cooperatives. S. 1081, the Affordable Housing and Environmental Action Through Development Act (AHEAD), contains several tax incentives for developers, including:
A deduction from gross income of the first $10,000 of gain from the sale of each home that qualifies for a tax credit.
An extension of the existing 10 percent rehabilitation tax credit to properties placed in service, from 30 years to at least 50 years, as an inducement for the rehabilitation of older buildings.
A reduction in reportable gain under the existing low-income housing tax credit by allowing certain industry practice development costs to be included in the eligible basis of the property. Included are costs for site preparation, state and local impact fees, reasonable development costs, professional fees related to basis items, construction financing costs (but not land acquisition costs), and on-site and adjacent improvements required by state or local government.
The proposed legislation requires 40 percent of the homes in the development plan be reserved for homebuyers whose income is lower than the median income of the area. Additionally, homebuyers are restricted for five years from selling their properties to anyone whose income is above the area’s median income. To access S.1081, click here.
WASHINGTON, D.C. -- July 17
The National Association of Realtors (NAR) and the Citizens Against Government Waste (CAGW) testified last week before the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises (GSEs) on a proposal to shift most of the regulation of Fannie Mae and Freddie Mac from the Department of Housing and Urban Development to the Federal Reserve Board. The NAR’s position is that such legislation would reduce government-sponsored enterprises effectiveness as mortgage investors and give banks control of financial markets, limiting consumers’ choices and homeownership opportunities. The citizens’ coalition, on the other hand, pointed to the costs and risks to taxpayers inherent in the activities of GSEs, saying that Fannie Mae and Freddie Mac have become ascendant in the financial markets by converting congressionally conferred benefits into a highly efficient profit-delivery system. For more on CAGW’s position click here. To visit NAR click here.
WASHINGTON - July 13, 2001
Legislation to increase the Federal Housing Administration loan limits by 25 percent was introduced in the U.S. Senate yesterday. Senators Jon Corzine (D-N.J.) and Thomas R. Carper (D-Del.) are sponsoring the bill. The legislation is similar to a measure, H.R. 1629, introduced in the House of Representatives by Marge Roukema (R-N.J.) and Barney Frank (D-Mass.) The Coalition for Affordable Rental Housing praised the move, calling it a critical step toward addressing the nation’s rental housing needs and Mortgage Bankers Association president Andrew D. Woodward called on both the Senate and the House to pass the legislation swiftly.
Washington, D.C. -- July 10, 2001
The U.S. Department of Housing and Urban Development has released its 284-page “The Fiscal Year 2002 Annual Performance Plan.” HUD's five strategic goals for 2002 and their performance measures are addressed. To learn more about and how HUD will promote and manage its programs for adequate and affordable housing, economic opportunity and living environments free from discrimination click here.
WASHINGTON, D.C. - July 6, 2001
The U.S. Department of Housing and Urban Development has issued an interim rule to raise the annual mortgage premium (MIP) charged for certain FHA multifamily housing loan programs to 80 basis points, from 50 basis points, effective Aug. 1, 2001. The rule and a companion implementing notice were published in the Federal Register on July 2. Not affected are certain non-HOPE VI low-income housing tax credit projects and Title IX programs. Comments are invited by August 1. For a full text of the rule and notice click here
The California Tax Credit Allocation Committee has released the names of 174 applicants for its federal and state low-income housing tax credit programs. The Committee received requests for more than $134.3 million in federal tax credits and more than $82.1 million in state tax credits. Credits are allocated on a competitive basis so that those meeting the highest housing priorities and public policy objects determined by the Committee will have first access to the credits. No competitive scores have yet been released. Therefore, it is difficult to conclude, from the information provided, which projects will be funded.
Lawmakers recently introduced a bill that would establish a national trust fund for the development, rehabilitation and preservation of safe, decent and affordable housing for low-income families. Sponsors of H.R. 2349 propose using part of the projected surpluses of the Federal Housing Administration insurance fund. The legislation could provide as many as 200,000 new homes or apartment units.
The Senate Appropriations Committee has unanimously approved a supplemental spending bill that would release $40 million in credit subsidy for the Federal Home Administration (FHA) multifamily insurance program. The bill would remove the emergency designation and other limitations from $40 million in funding that Congress appropriated for the FHA multifamily credit subsidy last year. The FHA mortgage insurance program was shut down April 19 when the agency ran out of its loan loss reserve, which halted the construction of more than 50,000 rental units across the country.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in July. The appropriate percentage for the 70 percent present value credit is 8.28 percent, up from June's 8.26 percent. The 30 percent present value credit is 3.55 percent, up slightly from June's 3.54 percent.
Top U.S. Department of Housing and Urban Development (HUD) official John C. Weicher said on June 20 that the mark-to-market program, administered by HUD’s Office of Multifamily Housing Assistance Restructuring (OMHAR), should be extended for another three years. Designed to save taxpayer dollars by restructuring mortgages and rents on Section 8 units to bring them up to market rates, the mark-to-market program was scheduled for termination on Sept. 30. Weicher told the housing subcommittee of the Senate Banking Committee that the Bush administration favors a three-year extension of the mark-to-market program, although the administration has not yet decided whether OMHAR will continue administering the program.
In May, multifamily housing starts rose by 0.7 percent, and single-family starts fell by 0.2 percent, reported the U.S. Commerce Department on June 19. Overall, housing starts were virtually unchanged from April, with a seasonally-adjusted annual rate of 1.6 million units.
Multifamily properties accounted for the largest share of commercial banking loans originated in 2000, with 42.8 percent and a volume of $26.5 billion, according to a recent survey conducted by the Mortgage Bankers Association of America (MBA). The MBA reported that commercial mortgage bankers originated more than 6,600 loans in 2000, with a total production volume of $62 billion.
President George W. Bush reiterated his commitment to the single-family tax credit program and other homeownership initiatives, in his weekly radio address on June 9. The single-family tax credit program would provide $1.7 billion annually in tax credits to support the rehabilitation and construction of affordable single-family homes. For more information about the program, click here.
The Millennial Housing Commission (MHC), a 22-member committee created by Congress to examine federal affordable housing policy and recommend legislation, seeks comments on a report about the low-income housing tax credit (LIHC) prepared for the MHC by Recapitalization Advisors, Inc. The report asserts that over the last 14 years, the LIHC program has shown rising effectiveness and efficiency with respect to utilization rates, demand-supply imbalance, equity raised per dollar of federal expenditure, range of property types financed and operating/compliance performance.
The U.S. Department of Housing and Urban Development (HUD) announced on June 1 that it would institute an immediate increase in the Federal Home Administration (FHA) multifamily insurance premium. HUD is proposing $40 million in supplemental funds to restart the multifamily insurance program in exchange for a 30 basis point premium increase. The FHA mortgage insurance program was shut down April 19 when the agency ran out of its loan loss reserve, which halted the construction of more than 50,000 rental units across the country. Some affordable housing advocates have said that the premium hike would cause multifamily rents to increase.
The U.S. Senate has confirmed President George W. Bush's nominees for management positions at the U.S. Department of Housing and Urban Development (HUD). The Senate confirmed Alphonso Jackson as HUD's deputy secretary, John C. Weicher as federal housing commissioner and assistant secretary of housing, Syracuse Mayor Roy A. Bernardi as assistant secretary of community planning and development and Richard A. Hauser as HUD’s general counsel.
The California Tax Credit Allocation Committee (TCAC) has released a second batch of frequently asked questions regarding the 2001 low-income housing tax credit application cycle. The deadline for the Golden State’s $50.8 million in federal credits is June 15.
The low-income housing tax credit (LIHC) program is the most successful federal affordable housing program within the past 30 years, according to a new report written by Recapitalization Advisors, Inc. for review by the Millennial Housing Commission (MHC), a 22-member committee created by Congress to examine federal affordable housing policy and recommend legislative changes. The report asserts that over the last 14 years, the LIHC program has shown rising effectiveness and efficiency with respect to utilization rates, demand- supply imbalance, equity raised per dollar of federal expenditure, range of property types financed and operating/compliance performance.
The California Debt Limit Allocation Committee (CDLAC) has adopted a new point category designed to encourage greater energy efficiency in qualified residential rental projects, CDLAC Executive Director Laurie Weir told the 22nd Annual Housing California Conference on May 22. Adopted by the panel on May 8, the category allows multifamily housing bond applicants to receive a maximum of seven points for using sustainable building methods, meaning the developer uses materials that increase energy efficiency by at least 15 percent above California Energy Commission Title 24, Part 6, of the California Code of Regulations.
To counter the crippling effect of the energy crisis, the California Public Utility Commission (PUC) should reclassify low-income housing tax credit (LIHC) properties with regulatory agreements as residential so that sponsors are eligible for baseline reductions, panelists told the 22nd Annual Housing California Conference on May 21. Currently, baseline exemptions do not apply to LIHC properties because rental housing is classified as commercial. This change would encourage conservation and reduce the burden of electricity hikes to affordable housing sponsors. To access an article about utility allowances and LIHC properties, click here.
New federal legislation would enable the production of more affordable rental housing, Daisy Stiner, executive director of the Texas Department of Housing and Community Affairs, told attendees of Novogradac & Company LLP’s Credit & Bond Financing for Affordable Housing Conference on May 18. The two versions of the legislation—HR 951 and SB 677—would allow states to use the greater of the statewide median income or area median income for the purpose of calculating income limits for the low-income housing tax credit (LIHC) program—a reform that is expected to increase the number of LIHC-eligible tenants in rural areas. To access HR 951 and SB 677, click here.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in June. The appropriate percentage for the 70 percent present value credit is 8.26 percent, up from May’s 8.19 percent. The 30 percent present value credit is 3.54 percent, up from May's 3.51 percent.
Developers of low-income housing tax credit (LIHC) properties should be aware that qualified census tracts (QCTs) will change significantly come fall, said Michael J. Novogradac at Novogradac & Company LLP’s Credit & Bond Financing for Affordable Housing Conference on May 17. LIHC projects located in a QCT qualify for a 30 percent increase in eligible basis. The U.S. Department of Housing and Urban Development (HUD) recalculates QCTs every 10 years, when new census figures are released. A QCT is an area in which 50 percent or more of households earn 60 percent or less of the area median income, or which has a poverty rate of at least 25 percent. Novogradac estimated that the new calculations would be available sometime in the fall.
Moody’s Investors Service has downgraded California’s credit rating because of the power crisis’ increasing drain on state coffers. Moody’s lowered its rating on $19.8 billion of state general obligation bonds from Aa3 to Aa2.
Multifamily housing starts dropped 15.3 percent to a 321,000 unit rate in April, offsetting the double-digit gain seen in March, the U.S. Commerce Department reported May 16. However, overall housing starts rose 1.5 percent in April from the previous month to a seasonally-adjusted annual rate of 1.61 million units. The overall rise in housing starts was due to a 6.7 percent increase in single-family production.
Multifamily housing units made up 25 percent of the nation’s housing stock in 1999, down from 27.8 percent in 1970, the Census Bureau reported. "Our Homes, Our Neighborhoods" presents findings from the 1999 American Housing Survey. The Census Bureau conducts this survey for the U.S. Department of Housing and Urban Development (HUD) with occupants of 47,000 housing units across the U.S. To access the survey, click here.
The Texas Department of Housing and Community Affairs has posted its 2001 low-income housing tax credit (LIHC) submission log. There were 162 applications submitted for the 2001 cycle, which closed April 23. Developers requested roughly $92 million in LIHCs, while $31 million is available.
The California Tax Credit Allocation Committee (TCAC) has released its frequently asked questions regarding the 2001 low-income housing tax credit application cycle. The deadline for the Golden State’s $50.8 million in federal credits is June 15.
The gap between California’s rich and poor residents narrowed in the mid- to late 1990s, according to a Public Policy Institute of California (PPIC) report released on May 9. The report also showed that the state’s income inequality remains much higher than it was in the 1970s and 1980s. Since 1969, the gap between rich and poor has grown 50 percent in the Golden State, compared to 25 percent in the rest of the nation. For more information, click here.
Read May’s Article of the Month: "Bush Proposes Single-Family Tax Credit Modeled on LIHC" by Jennifer A. Hurley of Novogradac & Company LLP. To access the article, click here.
The Rural Housing Service (RHS) has expanded its Multifamily Housing Guaranteed Loan program to finance the acquisition and rehabilitation of existing units, the U.S. Department of Agriculture announced May 8. RHS is encouraging developers to rehabilitate existing units, using the $85 million in loan guarantee authority remaining for the fiscal year. Previous regulations only allowed funds to be used for new construction.
The bipartisan Millennial Housing Commission (MHC), created by Congress to develop legislative recommendations for housing policy, announced on May 7 that it is seeking written testimony from housing experts nationwide on how the government can better support affordable housing opportunities. Responses must be submitted by June 29, 2001. The MHC is expected to issue its report to Congress in March 2002.
The development of more than 50,000 rental units throughout the country will come to a halt unless Congress and the Bush administration act quickly to reverse the announced shutdown of the Federal Home Administration (FHA) mortgage insurance program, according to testimony by the Mortgage Bankers Association of America (MBA). The FHA has said that it will stop insuring multifamily housing loans this month because the agency has run out of money to back those loans. Congress has already appropriated money to continue insuring some loans, but the Bush administration has not released the funds. A $40 million emergency supplemental appropriation could be tapped to preserve affordable rental housing developments only if the Bush administration declares an emergency. For more information about the crisis, click here.
National Association of Home Builders President Bob Nielsen urged Congress to clarify the definition of "eligible basis" within the low-income housing tax credit (LIHC) program to include development costs, at a May 3 House Financial Services Committee hearing. Nielsen also encouraged Congress to increase the loan limits for Federal Home Administration (FHA) multifamily mortgage insurance and to create a new multifamily production program targeting the working poor.
The California Senate Appropriations Committee has unanimously passed S.B. 73, which would increase the state low-income housing tax credit (LIHC) cap from $50 million to $70 million and provide an index for inflation. The legislation has now been placed on the Appropriations suspense file, which means that it will undergo another Appropriations Committee hearing.
Reps. Marge Roukema (R-N.J.) and Barney Frank (D-Mass.) have introduced legislation that would raise the cap on multifamily mortgage loans insured by the Federal Housing Administration (FHA). The bill proposes a 25 percent increase in FHA-insured loan limits, but no index for inflation.
The Internal Revenue Service has released the monthly bond factor amounts for April, May and June 2001. These amounts are used to calculate the amount of bonds considered satisfactory for dispositions of qualified low-income buildings or interests for buildings placed in service from 1987 to 2001. To access the monthly bond factor amounts, click here.
As part of a new pilot program, the Internal Revenue Service (IRS) and U.S. Treasury Department will examine how local impact fees associated with low-income housing tax credit (LIHC) properties will be treated with regards to eligible basis, according to an April 26 announcement. The Industry Issue Resolution Pilot Program is designed to establish a consistent IRS position on industry issues. The eligible basis topic is one of seven issues to be considered by the IRS and Treasury.
Spurred by the Golden State’s energy crisis, rating giant Standard & Poor’s has downgraded California’s bond rating from AA to A+. The two-notch downgrade "reflects the mounting and uncertain cost to the state of the current electrical power crisis, as well as its likely long-term detrimental effect on the state’s economy," S&P said in a statement.
The California Debt Limit Allocation Committee (CDLAC) has released a revised list of its 2001 Round 1 multifamily developers.
The Internal Revenue Service (IRS) has issued an Advance Notice of Proposed Rulemaking (ANPRM) regarding the New Markets Tax Credit (NMTC) Program. The ANPRM offers guidance on how entities should apply to receive NMTC allocations, as well as the competitive procedure through which such allocations will be made. The ANPRM requests public comments within 60 days of its publication in the April 23 Federal Register.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in May. The appropriate percentage for the 70 percent present value credit is 8.19 percent, down from April's 8.21 percent. The 30 percent present value credit is 3.51 percent, a very slight decrease from April's 3.52 percent.
Although nationwide housing starts fell 1.3 percent in March to a seasonally adjusted rate of 1.6 units—the second consecutive monthly decline—the multifamily sector saw a remarkable 10.4 percent gain to a rate of 372,000 units, the Commerce Department reported on April 17. This was the highest level of multifamily starts since February 2000. The overall decline in housing starts was due exclusively to a 4.3 percent decrease in single-family starts to a rate of 1.24 million units. Residential building permits also fell, with a 5.5 percent decline in the multifamily sector and a nearly 3 percent decline on the single-family side.
The California Senate Housing Committee has unanimously approved a bill introduced by state Sen. Joseph Dunn (D-Garden Grove) that would increase the state low-income housing tax credit (LIHC) by $20 million, with an index for inflation. The bill will be heard by the Senate Appropriations Committee on April 23. To access SB 73, click here.
The California Debt Limit Allocation Committee (CDLAC) has released its 2001 preliminary staff recommendations for qualified residential rental projects in the first funding round.
As part of California Gov. Gray Davis' (D) newly enacted $850 billion energy conservation plan, $50 million in low-interest loans and grants will be available to low-income residents, small businesses and homeowners for energy-efficient construction or retrofitting. The state will give $240 million in aid to low-income ratepayers, $100 million of which will go to subsidize utility costs for poor residents. In addition, $120 million will be spent on subsidies and grants for home energy savers such as insulation and low-flow showerheads.
The application for 9 percent low-income housing tax credits (LIHCs) is now available on the California Tax Credit Allocation Committee (TCAC) web site.
President George W. Bush (R) sent Congress his detailed fiscal year 2002 budget, which includes U.S. Department of Housing and Urban Development (HUD) funding. Bush proposes a 25 percent increase in funding for the Federal Housing Administration (FHA) multifamily loan limits, but would cut Community Development Block Grant (CDBG) funding from $5.056 billion to $4.702 billion. Other provisions include full funding for Section 8 contract renewals, $1.8 billion for HOME, $574 million for HOPE VI and $783 million for Section 202 elderly housing. Bush also advocates a $1.7 billion homeownership tax credit to support the rehabilitation or construction of single-family homes by low-income households over a five-year period. To access Bush's budget blueprint for HUD, click here.
Sen. Orrin Hatch (R-Utah) has introduced legislation that would amend the low-income housing tax credit (LIHC) program to allow states to use the greater of the statewide median income or the area median income (AMI) for the purpose of calculating LIHC income limits. Currently, states are required to use the AMI. The bill is identical to the H.R. 951, introduced by Rep. Amo Houghton (R-N.Y.) last month.
The U.S. Department of Housing and Urban Development (HUD) has released its fiscal year 2001 income limits. To access the income limits and related information, click here.
House Ways and Means Committee members Nancy Johnson (R-Conn.) and Charles Rangel (D-N.Y.) will introduce legislation in late April aimed at rectifying the so-called "TAM problem." The Internal Revenue Service (IRS) last October released five technical advice memorandums (TAMs) that some industry practitioners say seriously harm the low-income tax credit industry by limiting what costs can be included in eligible basis.
The California Debt Limit Allocation Committee (CDLAC) has delayed making its round one multifamily housing bond recommendations until April 11, Executive Director Laurie Weir announced April 3. Because of the delay, appeals to the staff recommendations will be due April 18.
The U.S. Department of Housing and Urban Development (HUD) has announced that it will delay the release of its fiscal year 2001 income limits until mid-April. The receipt of late census data and other statistical information, as well as the recently adopted procedural changes, contributed to the delay. HUD usually releases the income limits in early February. To access historic HUD income limits, click here.
Rep. Clay Shaw (R-Fla.) has introduced a bill that would allow owners of historic homes a tax credit for up to 20 percent of qualified rehabilitation expenses, with a cap of $40,000. The legislation is modeled after an existing tax credit for the rehabilitation of historic buildings. "This legislation will provide a tremendous opportunity for families to realize the American dream and purchase a home. It will also help the local communities by stimulating older, declining neighborhoods and communities," Shaw said in a statement.
More than two-thirds of low-income renter households in the California spend over half of their income on housing costs, a new report by the California Budget Project (CBP) found. The report reveals that low-income renters (those with household incomes under $15,000) out number affordable housing units (those under $400 per month) in the Golden State by more than 2-to-1—a shortage of 581,304 units. To access Still Locked Out: New Data Confirm that California's Housing Affordability Crisis Continues, click here.
Rep. Carrie Meek (D-Fla.) has introduced a bill intended to ensure that Community Development Block Grant (CDBG) funds target low-income neighborhoods. The bill would require that 80 percent of all CDBG funds be used to benefit low-income people, a 10 percent increase over the current requirement. The bill would also allocate 40 percent of CDBG fund to support activities that directly benefit people with incomes below 50 percent of the area median income. Supporters argue that the bill will help the CDBG program achieve its original goals of increasing affordable housing stock, revitalizing communities, and removing urban blight and slums.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in April. The appropriate percentage for the 70 percent present value credit is 8.21 percent, down from March's 8.24 percent. The 30 percent present value credit is 3.52 percent, a very slight decrease from March's 3.53 percent. To access low-income housing tax percentages from January 1997 to April 2001, click here.
Rep. Thomas M. Barrett (D-Wis.) reintroduced a bill aimed at modernizing the nation’s fair lending laws on March 6. First introduced in July 2000, the Community Reinvestment Modernization Act (CRA) is intended to improve minorities’ and low- income citizens’ access to financial services such as insurance. The legislation would also penalize financial institutions that have engaged in predatory lending through reduced CRA ratings. "CRA is paramount to continuing the progress this country has made toward eradicating discrimination in the financial services marketplace," Barrett said in a statement. Other objectives of the bill include improving data collection for small businesses and farm loans; requiring a notice and public comment period for mergers between banks, insurance and investment companies; and prohibiting insurance companies that violate fair housing court consent decrees from affiliating with banks.
In his first major action as housing secretary, U.S. Department of Housing and Urban Development (HUD) Secretary Mel Martinez proposed on March 20 that HUD raise the limit for Federal Housing Administration (FHA)-insured loans by 25 percent. The proposal is expected to provide an annual increase of $300 million in insured mortgages for affordable multifamily housing. The FHA loan limits were last increased in 1992, although housing construction costs have jumped 25 percent since that time, HUD said. In a statement about the increase, Secretary Martinez voiced his support for affordable housing programs such as the low-income housing tax credit, tax-exempt bonds and HOME. These programs are "a great example of federal, state and local governments working with the private sector to tackle the dual problem of housing affordability and availability in America," he said.
Multifamily housing starts gained 8.5 percentage points in February to a seasonally adjusted rate of 332,000 units, the U.S. Commerce Department reported March 16. The increase was due mostly to big gains in the Northeast. The Midwest and West saw housing start declines of 2.7 percent and 8.1 percent; the South experienced a slight increase of 1.5 percent, and the Northeast boomed with a 21 percent gain over January's figures. Residential building permits fell 3.1 percent, with a 0.9 decline in the multifamily sector.
President George W. Bush announced on March 15 that he will nominate three individuals to influential posts at the Department of Housing and Urban Development (HUD). As predicted, Roy A. Bernardi, currently the mayor of Syracuse, N.Y., has been selected to serve as Assistant Secretary for Community Planning and Development. Bush also intends to nominate Alphonso R. Jackson, current president of American Electric Power-TEXAS, as Deputy Secretary. John C. Weicher, senior fellow and director of urban studies at the Washington-based Hudson Institute, is slated for the position of Assistant Secretary for Housing/Federal Housing Commissioner.
Although large real estate investment trusts (REITs) experienced growth after two sluggish years, most of the nation's apartments are still owned and managed by individuals and smaller companies, according to an annual list of the 50 largest apartment owners and managers in the U.S. Still, the list, compiled by the National Multi Housing Council (NMHC), gave the two top spots to the Apartment Investment Management Company and Equity Residential Properties Trust, both large REITs.
The new construction of federally insured affordable housing is almost nonexistent in several large cities where there is a critical need for affordable housing, according to recent data from the Coalition of Affordable Rental Housing (CARH). In New York City, Boston and San Francisco, no new units of Federal Housing Administration (FHA)-insured multifamily housing were developed in 2000. This was also the case in Akron, Baltimore, Birmingham, Cincinnati, Norfolk, Oakland, Providence, Rochester, Salt Lake City, San Jose, Syracuse and Tampa, reported CARH. In Dallas, Los Angeles and Washington, D.C., only one FHA-insured multifamily development was produced last year. The data released by CARH demonstrates that all of these cities have huge numbers of working families facing a "critical housing need"--defined as families that pay more than 50 percent of their income for housing or that live in severely inadequate housing.
The coalition, established on March 13 at the Mortgage Bankers Association (MBA) National Housing Summit, is calling on Congress to increase by 25 percent the amount that FHA can insure for multifamily housing, with additional allowances for high-cost areas. The mortgage limits have not been increased since 1992, although housing construction costs have jumped by 25 percent since that time, said CARH. In addition to MBA, CARH members include the AFL-CIO Housing Investment Trust, National Apartment Association, National Association of Home Builders, National Leased Housing Association, National Multi Housing Council, National Association of Realtors and U.S. Conference of Mayors. To access the coalition's data, click here.
The California Tax Credit Allocation Committee (TCAC) has posted its market study guidelines for developers seeking low-income housing tax credits (LIHCs). For 2001, both 9 percent and 4 percent/bond applicants must conduct market studies. TCAC notes that the agency has different market study requirements depending on project size and financing type.
The Internal Revenue Service (IRS) has just released its 2001 population figures. These figures are used to determine each state’s low-income housing tax credit and private activity bond volume caps.
Rep. Amo Houghton (R-N.Y.) has introduced legislation designed to make low-income housing tax credit (LIHC) projects in rural areas more financially feasible. H.R. 951, coined the Housing Bond and Credit Modernization and Fairness Act, would allow states to use the higher of the area median income (AMI) or statewide median income for the purposes of calculating applicable income limits. To access H.R. 951, click here.
To meet demand, an annual average of 1.82 million new housing units must be built during the next 10 years, according to a recently published forecast by the National Association of Home Builders (NAHB). The Next Decade for Housing projects an annual number of 343,000 multifamily starts, 1.203 million single-family starts and 276,000 mobile home shipments during the 2001-2010 period. The report also states that rental, starter-home and broader seniors markets will strengthen in the second half of the decade.
The Internal Revenue Service has released the monthly bond factor amounts for January, February and March 2001. These amounts are used to calculate the amount of bonds considered satisfactory for dispositions of qualified low-income buildings or interests for buildings placed in service from 1987 to 2001. To access the monthly bond factor amounts, click here.
Low-income housing tax credit (LIHC) properties have notably high rates of compliance, according to a recently released report by the Internal Revenue Service (IRS). The report revealed that 154 out of 402 audits of LIHC cases were those in which no changes to the tax return were recommended. The IRS determined that the overall no-change rate for LIHC properties was 69 percent—a strikingly high figure compared to the typical no-change rates of 15 to 30 percent for partnerships and corporations. The report found that the most common compliance problems among LIHC properties were the reduction of eligible basis, disallowed developer fees and at-risk/bona fide financing.
For the first time, the California Tax Credit Allocation Committee (TCAC) will have separate applications for 9 percent and 4 percent transactions for the 2001 program year.
ATLANTA—Novogradac & Company LLP is pleased to announce the promotion of Jeffery W. Faile from senior accountant to manager, effective February 1, 2001. Working in the accounting and consulting firm’s Atlanta office, Faile specializes in developer consulting with an emphasis in forecasting, low-income housing tax credit applications and partnership taxation. He also teaches property compliance and tax credit application workshops nationwide. To access the press release, click here.
Preliminary estimates reveal that 2000 was one of the housing market’s most successful years, despite a downturn in the second half of the year, according to the February U.S. Market Conditions, a U.S. Department of Housing and Urban Development (HUD) publication. During the fourth quarter of 2000, the number of total housing starts rose, although multifamily starts decreased, said HUD. Additionally, the publication reported that affordability improved as a result of declining interest rates and the homeownership rate decreased slightly from the record set in the third quarter. Price movements were mixed, as new home prices increased and existing home prices decreased. To access more information about fourth quarter U.S. housing market conditions, click here.
U.S. Census Bureau officials announced on March 1 that they would not recommend adjusting 2000 census figures to compensate for a possible undercount. A recent survey concluded that the census population count of 281 million had missed 3 million people, including a disproportionate number of minorities. However, officials said that they could not rely on the survey as a basis for adjusting the figures because of possible statistical errors and discrepancies with other official documents. The recommendation will now go before Commerce Secretary Donald Evans, who has said that he opposes the adjustment.
Because the IRS determines the annual low-income housing tax credit and private activity bond caps based on the most recent population estimates, the bureau’s decision to forgo the adjustment would mean the loss of thousands of tax credit dollars for low-income housing. States with large minority populations, such as California, New York and Texas, would be affected most by the outcome. To access more information about the 2000 census, click here.
President George W. Bush released an outline of his fiscal year 2002 budget proposal for the federal government on Feb. 27. A Blueprint for New Beginnings: A Responsible Budget for America’s Priorities would expand the U.S. Department of Housing and Urban Development (HUD) budget from $28.5 billion to $30.4 billion—a modest increase compared to the $7.3 billion increase of last year. Bush plans to send his full budget to Congress in April.
The U.S. Department of Housing and Urban Development (HUD) has published its 2001 Super Notice of Funding Availability (NOFA). The 788-page document announces the funding available for various housing and community development programs, along with grant application deadlines. For information about HUD’s schedule of webcast briefings on various grant programs, click here.
The California Department of Housing and Community Development (HCD) has announced the availability of up to $60 million in funding for the Multifamily Housing Program, which provides low-interest loans to affordable housing developers. HCD says that the funds will be used to finance multifamily rental and transitional housing projects involving new construction, rehabilitation, acquisition and rehabilitation, or conversion of nonresidential structures. Applications are due on March 30, and HCD expects to issue commitments to successful applicants in late May.
The percentage of low-income housing tax credit (LIHC) units located in extremely poor neighborhoods is declining, determined a report recently released by the U.S. Department of Housing and Urban Development (HUD). The report states that for projects placed in service between 1992 and 1994, 39 percent of units were located in census tracts where more than 30 percent households were below the poverty line. From 1995 to 1998, the comparable percentages were only 18, 19, 20 and 21. The report attributes the decline to the increasing proportion of LIHC properties located in suburban areas compared to central city neighborhoods. To access Updating the Low Income Housing Tax Credit (LIHTC) Database Final Report, click here.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in March. The appropriate percentage for the 70 percent present value credit is 8.24 percent, up very slightly from February’s 8.23 percent. The 30 percent present value credit is 3.53 percent, the same as in February.
The California Tax Credit Allocation Committee (TCAC), the agency responsible for allocating low-income housing credits in the Golden State, has announced that it will hold a single funding round in 2001, with a June 15 application deadline.
Housing starts rose in January to 1,651,000, representing an increase of 5 percent over the previous month’s rate, but a decline of 5 percent since last January, the U.S. Commerce Department reported Feb 16. The seasonally adjusted rate for multifamily construction was 311,000 in January, up slightly from December’s rate of 264,000.
The California Tax Credit Allocation Committee (TCAC), the agency responsible for allocating low-income housing tax credits in the Golden State, published its second draft 2001 program regulations on Feb. 8.
The National Association of Realtors (NAR) forecasts that the U.S. economy is increasingly likely to rebound in the second half of 2001 after experiencing a brief dip or negative growth. Housing continues to be the most stable sector of the economy, but is showing some signs of weakening, according to NAR. The association expects housing starts to decline 1.4 percent this year to a total of 1.58 million units.
Homebuilders in California constructed 147,586 new housing units in 2000, only 59 percent of the estimated 250,000 new homes and apartments needed annually to meet job and population increases, said an industry trade group on Feb. 6. Although home production in 2000 rose 5.3 percent from 1999, reported the Construction Industry Research Board, production declined in many major job centers. Single-family construction fell by 15 percent in Santa Clara County; by 12 percent in Orange County; by 10 percent in San Francisco, San Mateo and Marin counties; by 8 percent in San Diego County and by 1 percent in the East Bay. Industry leaders contend that regulations limiting the construction of new housing are to blame for the housing shortage.
A new state law, signed by Delaware Gov. Ruth Ann Minner (R) on Feb. 2, provides homeowners and investors with an incentive to preserve the state’s historic properties. Sponsored by state Rep. Joseph DiPinto (R), the Historic Preservation Tax Credit Act offers renovators tax credits of as much as 40 percent of renovation costs. The federal tax credit program, in contrast, extends tax credits equal to 20 percent of expenditures to rehabilitate a certified historic property, or 30 percent for properties housing low-income tenants. The Delaware law sets the tax credit cap at $3 million a year; additionally, the maximum tax credit for the renovation of a single owner–occupied historic property is $20,000.
SAN DIEGO—Working families in America are increasingly unable to find decent, affordable homes, reported the Mortgage Bankers Association of America (MBA) and the National Housing Conference (NHC) in a joint presentation at a Feb. 6 affordable housing conference. Relying on data from the U.S. Census Bureau’s 1999 American Housing Survey, the MBA and NHC determined that the number of middle-income families facing a critical housing need rose by 38 percent between 1997 and 1999. These are families earning between 50 and 120 percent of the median income. Families earning between 80 and 120 percent of the median income who face a critical housing need increased by 74 percent—an increase of 90 percent for renters and 66 percent for homeowners. A family experiences a critical housing need if it is paying more than half of family income for housing or living in severely inadequate housing. The findings demonstrate that the crisis in affordable housing is not limited to the poorest Americans, said representatives from the MBA and NHC.
Fannie Mae announced on Feb. 2 that it surpassed all of its year 2000 goals. Last year, over 49 percent of Fannie Mae–financed units went to low- and moderate-income households, compared to the company’s goal of 42 percent; nearly 31 percent of such units were located in underserved areas, compared to a goal of 24 percent. Special affordable housing—which serves low- and very low-income households living in both single-family and multifamily residences—accounted for 22 percent of the company’s financed units, outstripping the goal of 14 percent. During the year 2000, Fannie Mae delivered a total of $3.8 billion in multifamily special affordable financing against a minimum goal of $1.29 billion.
Housing affordability in California fell to 32 percent in December 2000, a decline of 4 percentage points since the previous December, the California Association of Realtors (CAR) reported on Feb. 1. CAR’s monthly housing affordability index determines the percentage of households that can afford to purchase a median-priced home in California. San Francisco, at 10 percent, was again the least affordable county in the state; Contra Costa, San Mateo and Santa Cruz counties followed, each at 14 percent. For the entire San Francisco Bay Area region, affordability was 18 percent. San Diego, at 24 percent, was the least affordable county in Southern California. The high desert area in Southern California boasted the most affordable housing in the state, with 67 percent of households able to purchase a median-priced home. Nationwide, housing affordability is 55 percent, unchanged from last year.
State Sen. Joseph Dunn (D-Garden Grove) recently introduced a bill that would increase the California’s low-income housing tax credit (LIHC) cap by $20 million to a total of $70 million a year. The bill would also provide an adjustment for inflation for the calendar year 2002 and thereafter.
A diverse coalition of business, development, labor and affordable housing advocates in California recently released its revised policy agenda, intended to increase housing availability and affordability in California’s major employment areas. California’s dearth of affordable housing, already a critical problem, is expected to worsen in 2001, said Job-Center Housing Coalition members. The Job-Center Coalition outlined several legislative goals in its new agenda, including to establish a plan for meeting California’s long-term housing need, to support housing close to jobs, and to bring affordable townhomes and condos back into production by curbing unnecessary lawsuits while protecting homeowners. The coalition also favors eliminating barriers to infill housing projects, opening development opportunities in abandoned urban centers, and providing a continuum of state funding to support affordable housing for low- and moderate-income families.
Lack of affordable housing is San Francisco’s most crucial problem, according to poll results released by the Chamber of Commerce on Jan. 30. Of the 500 registered voters who responded to the telephone survey, 38 percent cited housing costs as their primary concern. Homelessness was number two on the list, with 12 percent naming it the city’s biggest problem. The survey indicates the public’s support for "smart growth," policies that encourage carefully planned growth. One example of smart growth favored by the Chamber of Commerce is the idea of higher housing densities along major public transportation lines—a plan that would presumably help to reduce traffic problems.
The California Debt Limit Allocation Committee (CDLAC) is informally requesting private activity bond applicants to voluntarily submit information about how they will cope with California’s rising utility costs, according to a Jan. 26 memorandum issued by CDLAC. CDLAC stresses that the request is for informational purposes only, and will not be used to determine allocations.
Most apartment industry leaders balk at the notion that the U.S. is headed toward a recession, concluded the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions, released on Jan. 26. Of the respondents to the first quarter 2001 survey, only 4 percent said that a "hard landing" is the likely outcome of the recent economic slowdown. According to the survey, 49 percent of respondents said that a "bumpy landing"—in which growth slows to a below-average rate, then rebounds—was the most likely scenario; 42 percent chose a "soft landing," in which growth slows to a sustainable pace.
The General Accounting Office (GAO) has removed the U.S. Department of Housing and Urban Development (HUD) from its "high-risk" list, according to a recent GAO report. In 1994, GAO designated all HUD programs as high risk, contending the agency was prone to waste, fraud, abuse and mismanagement. GAO changed HUD’s overall status in January 2001 when it took some HUD programs off the high-risk list. Two of the principal HUD programs that remain on GAO’s high-risk list are single-family mortgage insurance and rental assistance. To access Major Management Challenges and Program Risks: Department of Housing and Urban Development (GAO-01-248), click here.
The Senate voted unanimously to approve Mel Martinez for secretary of the U.S. Department of Housing and Urban Development on Jan. 23. A graduate of the Florida State University College of Law in 1973, Martinez practiced law in Orlando for 25 years. During the 1980s, he served as chairman of the Orlando Housing Authority; since 1998, he has served as chairman of Florida’s Orange County, which encompasses the city of Orlando. Martinez, 54, co-chaired Bush’s presidential campaign in Florida.
The Senate Banking, Housing and Urban Development Committee voted unanimously to approve Mel Martinez, President George W. Bush’s (R) selection for housing secretary, on Jan. 22. The full Senate is expected to confirm Martinez on Jan. 23.
The number of renter households with worst case housing needs decreased significantly between 1997 and 1999, reversing a 10-year trend of increasing worst case needs, according to a report released this month by the U.S. Department of Housing and Urban Development (HUD). Renter households with worst case housing needs—defined as those who spend more than half of their gross income on housing costs or live in severely inadequate housing—totaled 4.86 million in 1999, compared to 5.38 million in 1997. HUD attributes the 8 percent drop in severe housing problems to rising incomes of very-low-income renters. Median income among very-low-income renters increased 14 percent in 1999, while median rents increased by only 6 percent. To access HUD’s report, click here.
The Internal Revenue Service (IRS) has released its low-income housing tax credit percentages that apply to low-income rental housing buildings placed in service in February. The appropriate percentage for the 70 percent present value credit is 8.23 percent, down from January’s 8.33 percent. The 30 percent present value credit is 3.53 percent, down from January’s 3.57 percent.
President-elect George W. Bush’s (R) nominee for housing secretary, Mel Martinez, breezed through a two-hour Senate confirmation hearing on Jan. 17. He is expected to secure a unanimous Senate confirmation next week, possibly as early as Jan. 20. During the confirmation hearings, Martinez assured Democratic senators that he would strengthen the U.S. Department of Housing and Urban Development (HUD), which has been a target of Republican budget-cutting plans in the past, and increase the agency’s role in providing affordable housing for low-income and minority Americans. His proposals to increase homeownership include a plan to allow low-income families to apply federal rental vouchers toward purchasing a home, tax credits for financial institutions that match the savings of low-income earners, and tax credits designed to encourage the construction and rehabilitation of single-family homes in economically distressed communities.
Housing production decreased during the year 2000, the U.S. Commerce Department reported on Jan. 18. Housing starts fell to 1.59 million units, a decline of 4.4. percent from 1999’s vigorous pace of 1.67 million units. Multifamily starts plummeted by 21 percent in December to a seasonally adjusted annual rate of 262,000 units, more than counterbalancing November’s double-digit increase. For all of 2000, multifamily housing production was down slightly from 1999, at 330,000 units.
Fiscal year 2001 income limits will not be released until March, most likely toward the end of the month, according to HUD sources. HUD cites three reasons for the delay. First, the agency received census and other statistical data late. Second, a recent policy change eliminated most of the downward adjustments to income limits. Finally, HUD’s programming staff recently lost three out of four of its members to retirement, presumably due to the new presidential administration.
In his fiscal year 2001-2002 budget, California Gov. Gray Davis (D) has proposed adding $200 million to the existing $100 million for the Jobs-Housing Balance Improvement Program, an effort that provides incentives to cities and counties to bolster their level of housing permits. Davis also proposed spending $7.5 million to rehabilitate 206 migrant farmworker-housing units in Merced and Yolo counties. To access the governor’s proposed budget, click here.
The Internal Revenue Service has released the monthly bond factor amounts for October, November and December 2000. These amounts are used to calculate the amount of bonds considered satisfactory for dispositions of qualified low-income buildings or interests for buildings placed in service from 1987 to 2000. To access the monthly bond factor amounts, click here.
The California Tax Credit Allocation Committee has unveiled new regulations governing the Golden State’s $50 million federal tax credit program. The proposed 2001 regulations reflect programmatic changes enacted in a $450 billion budget package. TCAC will hold two public hearings regarding the proposed changes: Jan. 30 in Los Angeles and Feb. 1 in Sacramento.