Notes from Novogradac

Published by H. Blair Kincer on June 5, 2019

In 2017, LIHTC properties’ overall expenses grew 2.3 percent while their revenue grew 2.7 percent, according to the Novogradac 2019 Multifamily Rental Housing Operating Expense Report-Survey and Analysis of LIHTC Properties. This difference in growth resulted in the largest year-over-year NOI increase (3.3 percent) seen in eight years.

Published by Dirk Wallace, Michael Novogradac, Peter Lawrence on June 5, 2019

One of the most important provisions of the Affordable Housing Credit Improvement Act (AHCIA) of 2019 is the proposal to increase 9 percent allocations. This provision is justified by the tremendous unmet need for more affordable rental housing production.

Published by Dirk Wallace, Michael Novogradac, Peter Lawrence on June 5, 2019

Novogradac projects nearly 66,000 additional rental homes could be financed from 2020 to 2029 if a provision is enacted to establish a minimum 4 percent floor for low-income housing tax credits (LIHTCs) generated by tax-exempt private activity bonds issued for multifamily housing. This would greatly enhance the LIHTC, an incentive that the National Council of State Housing Agencies’ 2017 Factbook reports is already responsible for the creation of more than 1 million affordable rental homes from 1987 through 2017.

Published by H. Blair Kincer on June 5, 2019

Last year Congress enacted a new tool to extend the reach of the low-income housing tax credit (LIHTC) to meet the country’s varied affordable rental housing needs: the average income test. Since its enactment, the option has generated a lot of discussion and raised many questions about its implementation. Now, as developers and states have started using the average income test option, its applicability can be better assessed.

Background

Published by Dirk Wallace, Michael Novogradac, Peter Lawrence on June 4, 2019

Today, Sens. Maria Cantwell, D-Wash.; Johnny Isakson, R-Ga.; Ron Wyden, D-Ore.; and Todd Young, R-Ind. introduced S. 1703 the Affordable Housing Credit Improvement Act of 2019 (AHCIA). This comprehensive low-income housing tax credit (LIHTC) legislation builds on a similar bill introduced in 2017 during the last Congress, S. 548.  Reps. Suzan DelBene, D-Wash.; Kenny Marchant, R-Texas; Don Beyer, D-Va.; and Jackie Walorski, R-Ind.

Published by H. Blair Kincer on May 30, 2019

As noted in this space last month, overall expenses for low-income housing tax credit (LIHTC) properties in 2017 grew by 2.3 percent, a return to previous norms. However, while the overall LIHTC operating expense growth was more in line with the trend previous years, the Novogradac 2019 Multifamily Rental Housing Operating Expense Report-Survey and Analysis of LIHTC Properties found that one category of expenses for LIHTC properties saw a sizable increase in 2017: real estate taxes.

Published by H. Blair Kincer on May 29, 2019

As part of a research effort focusing on underserved markets, Freddie Mac last year published a paper studying why Middle Appalachia is one of the hardest-to-serve housing markets, particularly for renters. Middle Appalachia is a rural region stretching from southern Ohio to western North Carolina on both sides of the Appalachian Mountains. As Freddie Mac reports, market factors facing the region are part of the reason Middle Appalachia is an underserved housing market, including population losses, low median incomes and the prevalence of persistent poverty counties.

Published by Peter Lawrence on May 23, 2019

The House Appropriations Transportation-HUD (THUD) Subcommittee released its $75.8 billion fiscal year (FY) 2020 spending bill May 22, which was approved by the subcommittee earlier today.

Published by Kevin Wilson on May 21, 2019

The budget for California’s next fiscal year is expected to be completed in the next month and through the budget process, leadership will determine the extent to which the state will provide state income tax opportunity zones (OZ) incentives to encourage investment in distressed communities. This process is an important opportunity for California to leverage this new community development tool to enhance the efficiency of other state, county or city programs that have limited resources.

About Conformity

Published by H. Blair Kincer on May 20, 2019

After some volatility in 2015 and 2016, the year-over-year change in overall expenses for low-income housing tax credit (LIHTC) properties in 2017 was more in line with the previous norms: an increase of 2.3 percent, according to according to the Novogradac 2019 Multifamily Rental Housing Operating Expense Report-Survey and Analysis of LIHTC Properties.