PAB Issuance for Multifamily Hits New Record; Overall Issuance Drops in 2020
Private activity bond (PAB) issuance for multifamily housing increased to a new record in 2020, according to a report released today by the Council of Development Finance Agencies (CDFA). Issuance of multifamily PABs–which can be combined with 4% low-income housing tax credits (LIHTCs) in multifamily housing–reached $17.2 billion in 2020, up from the previous record of $16.4 billion in 2019. The jump in multifamily PAB issuance comes despite a decrease in overall PAB issuance. After reaching an all-time high of $30.5 billion issuance in 2019, PAB issuance dropped to $27.7 billion in 2020, according to the CDFA Annual Volume Cap Report. The CDFA report said 20 states were oversubscribed for cap allocation in 2020, meaning bond issuers requested more cap allocation than what is available, forcing states to ration the cap.
A Notes from Novogradac blog post provides further insight into the CDFA report. How competition for PABs affects affordable housing will be a topic of discussion at the Novogradac 2021 Tax Credit Housing Finance Conference Dec. 2-3 in Las Vegas.