Low-Income Housing Tax Credits News Briefs - April 2014

Tuesday, April 1, 2014

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Low and Moderate Income Housing Act of 2014 (H.R. 4130), was introduced on Feb. 28. The bill would amend the Internal Revenue Code (IRC) to read that a property meets the requirements if 50 percent or more of the residential units in such property are both rent-restricted and occupied by individuals whose income is between 50 percent and 120 percent of the area median income (AMI). The legislation would be effective immediately upon enactment. A copy of H.R. 4130 is available at www.taxcredithousing.com.

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On Feb. 27, the Internal Revenue Service (IRS) released Notice 2014-15, Extension of Notice 2012-18 Treatment for States Participating in the Physical Inspections Pilot program. The notice extends the alternative method deadline for state housing agencies to satisfy the physical inspection and certification requirements of Treasury regulations. Notice 2012-18 originally provided a deadline of Dec. 31, 2012. The deadline is now Dec. 31, 2014. The notice is available at www.taxcredithousing.com.

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On Feb. 24, the IRS released Notice 2014-12, 2014 Calendar Year Resident Population Figures. The population figures are used to determine a state’s 2014 low-incmoe housing tax credit (LIHTC) ceiling and tax-exempt private activity bond caps. For 2014, each state’s LIHTC ceiling is the greater of $2.30 multiplied by the state population or $2.635 million. Each state’s tax-exempt bond volume cap is the greater of $100 multiplied by the state population or $296.8 million. The notice is available at www.taxcredithousing.com.

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On March 10, the Rural Housing Service released a notice announcing the upcoming meetings for the U.S. Department of Agriculture (USDA) Multi-Family Housing Program 2014 Industry Forums. The forums will be held in a series of teleconferences and/or web conference meetings. They are expected to be held during the months of March, June, September and December 2014. Specific dates and times will be announced via email to registered parties. The notice, which is available at www.taxcredithousing.com, outlines proposed topics.

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The Office of the Comptroller of the Currency (OCC) released three lists of community reinvestment act (CRA) performance evaluations for national banks, federal savings associations and insured branches of foreign banks that have received ratings in February. The possible ratings are outstanding, satisfactory, needs to improve and substantial noncompliance. The first list had 26 evaluations during the period of Aug. 1, 2013 to Aug. 31, 2013. There were four outstanding evaluations and 22 satisfactory evaluations, with none rated as needs to improve or substantial noncompliance. The second list had 42 evaluations during the period of Sept. 1, 2013 through Sept. 30, 2013. There were five outstanding evaluations, 37 satisfactory evaluations and none were rated as needs to improve or rated substantial noncompliance. The third list had 54 evaluations during the period of Oct. 1, 2013 through Oct. 31, 2013. There were 10 outstanding evaluations and 43 satisfactory evaluations, and one evaluation was rated needs to improve while none rated substantial noncompliance. The list is available at www.occ.gov.

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STATE BRIEFS

Oklahoma H.B. 3099, the Oklahoma Affordable Housing Act, was engrossed on March 12 by the House and creates a state low-income housing tax credit program. To be eligible, developments must be placed in service after Dec. 31, 2014 and begin generating credits during calendar year 2015. The credit amount would be equal to the federal LIHTCs for a given property. The annual credit amount would be equal to the annual federal LIHTCs available to the state for the same allocation year. The bill would allow the tax credit to be carried forward five years. State tax credits can be recaptured during the first 10 years if federal LIHTCs are recaptured. At press time, the bill was sent to the Senate. The bill is available at www.taxcredithousing.com.

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On March 4, Washington, D.C. Councilman Kenyan R. McDuffie introduced a bill that would provide tax credits to subsidize the production of affordable rental housing in the District of Columbia. The bill would create a local tax credit to supplement the federal LIHTC program at the recommendation of the District’s Comprehensive Housing Strategy Task Force. At press time, the bill had been referred to the council’s Committee on Finance and Revenue.

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The Indiana Housing and Community Development Authority (IHCDA) on Feb. 27 announced its recommendations for the 2014 LIHTC reservations. IHCDA received 44 applications in November 2013 requesting $36.8 million in LIHTCs and $15.8 million in supplemental funding. Combined, allocations totaled $12.1 million in LIHTCs and $5.25 million in IHCDA funding to provide more than 800 affordable housing units. Credit awards ranged from $452,182 to $1.2 million. Properties included Huntington Senior Residence, Lawrence Senior Apartments, Historic Whitlock Place, River Pointe and the Hoffman Hotel Apartments. The complete list is available at www.taxcredithousing.com.

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The Minnesota Housing Finance Authority (MHFA) held a meeting on March 17 to discuss the draft of the amended 2016 qualified allocation plan (QAP) and procedure manual. MHFA sought comment on the draft, which is available at www.mnhousing.gov.

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The Pennsylvania Housing Finance Agency (PHFA) announced on Feb. 18 the award of $18.7 million in funding for affordable multifamily developments. PHFA has $16.8 million in LIHTCs and $1.9 million in PennHOMES funding. Funding will go towards the construction and rehabilitation of 19 affordable multifamily housing developments in urban areas throughout the state. An additional 867 units will be made available. A second round of funding will be announced in July. Awards ranged from $359,479 to $1,306,396. The list of developments awarded in the first round is available at www.taxcredithousing.com.

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On Feb. 20, the Ohio Housing Finance Agency (OHFA) board of directors awarded more than $2.6 million through the Housing Development Assistance program (HDAP), $3 million through the Recycled-Tax Credit Assistance program (R-TCAP) and $2 million through the Housing Development Loan (HDL) program. Parqwood Apartments in Toledo, Lucas County received $1 million in HDAP and $1.5 million in R-TCAP. The funds will be used to acquire and rehabilitate 134 senior affordable housing units. Heritage View Homes IV in Cleveland, Cuyahoga County received $1 million in HDAP and $1.5 in R-TCAP. Heritage View Homes IV will have 60 newly constructed affordable housing units for families. Victorian Heritage in Columbus, Franklin County received $1 million in HDL. Victorian Heritage will have 59 units in five historic buildings acquired and rehabilitated for families. OHFA anticipates recycling more than $70 million in loan repayments during the next four years.

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DEALMAKERS

CORRECTION
A brief in the February issue of the Journal of Tax Credits misidentified the organization that provided Chapman Arms with $17.1 million in tax-exempt bonds. It should have listed MassDevelopment as the organization. We regret the error.

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The grand opening of Archway Commons was held Feb. 12. The 76-unit affordable rental housing community in Modesto, Calif., received a 9 percent LIHTC award from the City of Modesto’s low- and moderate-income housing set-aside funds, and HOME funds from the U.S. Department of Housing and Urban Development (HUD). Developed by EAH Housing, Archway Commons will have energy-efficient units available for families earning 60 percent or less of the AMI. The property will consist of one-, two- and three-bedroom units in garden-style buildings, with amenities such as a clubhouse, community center, swimming pool, playing fields and a computer learning center. Phase two of the development will create 74 adjacent units.

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Boston Capital announced Feb. 19 that it is investing in LIHTC equity for the construction of Paseo Pointe, a 69-unit, mixed-use affordable housing development. Located in Vista, Calif., the property will be developed by Affirmed Housing. Paseo Pointe comprises two, three-story wood structures. It will have three studio units, and 21 one-, 24 two- and 21 three-bedroom apartment homes. Units will be available to families earning 60 percent or less of AMI. Amenities will include a library with a computer area, an exercise room and a “tot lot.” Retail space will be located on the ground floor of the north building, and a community room will be located in the south building. Construction is expected to create more than 100 jobs and to be completed in spring of 2015.

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The groundbreaking of Emerald Ridge, an affordable housing community, was held Feb. 10. The Illinois Housing Development Authority awarded federal LIHTCs for the development of Emerald Ridge in East Alton. In addition, $2.4 million in federal HOME Investment Partnerships program funds, Illinois Affordable Housing Trust Fund resources and Illinois Affordable Housing Tax Credit resources were provided. The Illinois Department of Commerce and Economic Opportunity also provided a $184,000 grant to add energy-saving features to the units. Formerly the Defense Area properties of East Alton, the site of a World War II-era development, the redevelopment will replace 91 outdated housing units with 46 new single-family rental homes for working families. There will be 34 single-story and 12 two-story single-family detached homes. The development will include 23 two-, 11 three- and 12 four-bedroom homes. Units are available to residents earning 60 percent or less AMI. Ten of the units are reserved for extremely low-income residents with disabilities or special needs earning no more than 30 percent AMI. Emerald Ridge is being developed by Rise Community Development in partnership with Southwestern Illinois Development Authority. Development is expected to create more than 80 jobs, with completion anticipated to be in early 2015.

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On Feb. 18, Merritt Community Capital Corporation marked its 25th year by closing Fund XVI, an $80.5 million multi-investor fund. Fund XVI will preserve or construct 861 affordable housing units in nine developments across California. Fund XVI has 12 investors. Developer partners include Bridge Housing/Sacramento Housing Authority, Tenderloin Neighborhood Development Corporation, Solano Affordable Housing, American Baptist Homes of the West and Napa Valley Community Housing/Burbank Housing and Area Housing Authority of Ventura.

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AvéVista, an affordable housing development in Oakland, Calif., broke ground Feb. 21. AvéVista will provide 68 units consisting of studio, one-, two- and three-bedroom apartments that will be offered to residents earning 30 to 60 percent of AMI. Construction will total $32 million and will feature four floors in a Mediterranean-style building. The ground floor will have 3,000 square feet of retail space and resident parking. AvéVista is expected to be complete in summer 2015.

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The 40-year-old Los Robles Apartments in Vista, Calif. has been remodeled to include water and energy upgrades. Community HousingWorks (CHW) received a LIHTC investment and tax-exempt bonds for redevelopment of the HUD Section 236 property. ENERGY STAR appliances, low-emissive windows and domestic solar hot water panels were installed during the first phase. CHW also installed a 125-kilowatt photovoltaic solar electrical system. For phase two, in 2013, CHW upgraded all apartments with new bathrooms, kitchens and windows, added patios, barbeques and bike racks and upgraded the play area. CHW also rebuilt and expanded the community building to provide space for CHWs’ after-school and adult learning programs. Originally built in 1974, Los Robles Apartments will remain affordable housing for at least 55 years. There are 76 one-, two- and three-bedroom apartments and upgrade costs totaled $1.2 million. Sue Reynolds, CEO of CHW, said in a press release that Los Robles now produces enough electricity to meet nearly all its electrical needs, saving more than $70,000 each year, as well as reducing its gas and water consumption by more than 50 percent.

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On Feb. 21, the Pennsylvania Housing Finance Agency (PHFA) awarded the Philadelphia Housing Authority (PHA) a 9 percent LIHTC allocation for the redevelopment of Blumberg Apartments. The first phase of redevelopment is expected to total $20.5 million and the award will cover more than 60 percent of the total construction cost of the first phase. The City of Philadelphia provided $1.5 million grant through the city’s Office of Housing and Community Development, and a loan of $6.3 million from Philadelphia’s public housing authority. Located in Philadelphia’s Sharswood neighborhood, the Blumberg Apartments redevelopment is a multi-phase development, with phase one providing 57 newly constructed rental units to households earning 60 percent or less of the area median income (AMI). PHA plans to submit 4 percent LIHTC applications for each subsequent phase.

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On March 5, Boston Capital announced an LIHTC equity investment in the rehabilitation of Senior Suites of Norwood Park in Chicago, Ill. The rehabilitation of the 84-unit development will produce a three-story building that includes 10 studio units, 63 one-bedroom units and 11 two-bedroom units. Amenities will include a central community room, lounges on each floor, a fitness room, a library/reading room, a health/wellness office and a landscaped patio area with a barbecue and picnic area. Units will be available to seniors earning 60 percent or less of the AMI. The rehabilitation will create more than 140 construction jobs and five permanent jobs.

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On March 5, U.S. Bancorp Community Development Corporation (USBCDC), a subsidiary of U.S. Bank, announced more than $20 million in LIHTC equity financing for the redevelopment of Iberville Housing. Located in the Tremé neighborhood of New Orleans, redevelopment of the historic Iberville Housing will include a one-for-one replacement of the 821, mixed-income units. USBCDC’s financing will fund the first and second phases of redevelopment, which will produce 227 units, 81 public housing units, 49 workforce units and 97 market-rate units. HRI Properties, a real estate development company specializing in the adaptive reuse of historic structures, began demolition in August 2013 and construction in November 2013. Construction is expected to be complete by early 2015. Iberville Housing also received a $30.5 million HUD Choice Neighborhoods Grant, funding from the Housing Authority of New Orleans and a $22.2 million bridge loan from U.S. Bank.

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Enterprise Community Investment Inc. announced March 6 its plan to provide financing for the acquisition, rehabilitation and preservation of Huntington Towers, in New London, Conn. and Reserve at Northglenn, in Northglenn, Colo. The combined investment for Huntington Towers will be more than $4 million and will be financed using Enterprise’s new conventional equity product. A total of 120 affordable apartments will be reserved for very low-income seniors. Enterprise is also providing $2.9 million in conventional equity for the acquisition, minor rehabilitation and preservation of the Reserve at Northglenn. There will be 220 units. The firm also announced the closing of a $5.8 million LIHTC transaction for Joslyn Court III and IV. Located in Syracuse, New York, the affordable housing development will provide 36 units to residents earning at or below 50 percent of the area median income, with a portion of the units reserved for homeless veterans, domestic violence victims and people with mobility, auditory or visual impairments.

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PEOPLE IN THE INDUSTRY

The Affordable Housing Tax Credit Coalition announced at its annual meeting Feb. 4, the 2014 board of directors. Todd Crow, executive vice president and manager of tax credit capital for PNC Real Estate, was named president; Anthony Alfieri, managing director of RBC Capital Markets, was named first vice president; Scott Hoekman, senior vice president and chief credit officer from Enterprise Community Investment, was named secretary; Bryan Keller, partner-in-charge of real estate services group, from RubinBrown LLP was named treasurer.

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On Feb. 6, the National Association of Home Builders (NAHB) announced that Kevin Kelly would serve as the 2014 chairman. The announcement was made during its International Builders’ Show. The Delaware builder and developer is president of Leon N. Weiner & Associates Inc. Kelly originally joined NAHB in 1979, and has been involved with land and housing development. Kelly is a life director for NAHB of Delaware, served two terms as its president and was named Builder of the Year in 1999. Kelly served as chairman for the federal government affairs, association planning and joint councils and served on the Budget and Finance Committee. Kelly also served on the board of governors of the National Housing Conference from 2003 to 2007. In 2009, Kelly was recognized as the NAHB Government Affairs Member of the Year and the NAHB Advocate of the Year.

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U.S. Bank announced on Feb.7 that Diana Cardenas and James Kim have joined the company’s community lending division (CLD) in Los Angeles, and Nami McKlendin has joined the company’s San Diego office. Cardenas will be the relationship manager. She previously worked at Bank of America, Community Redevelopment Agency of the City of Los Angeles (CRA/LA) and Wells Fargo. Cardenas holds a bachelors and masters degree from Stanford University and an M.B.A. from UCLA. Kim will be an assistant relationship manager. He previously worked at AIG SunAmerica Affordable Housing Partners. Kim attended California State University-Long Beach and completed real estate coursework through UCLA Extension. McKlendin will be an assistant relationship manager. She previously worked at ConAm Management Corporation and Red Capital Group.

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On Feb. 8, New York Mayor Bill de Blasio announced four members of his administration. Shola Olatoye was appointed chair of the New York City Housing Authority (NYCHA), Cecil House was appointed general manager of the NYCHA, Vicki Been was appointed commissioner of the Department of Housing Preservation and Development (HPD) and Gary D. Rodney was appointed president of the Housing Development Corporation (HDC). Olatoye will focus on expanding employment opportunities for NYCHA residents, developing plans to retrofit buildings and supporting tenants, including the 40 percent of residents over the age of 62. House will focus on continuing to reduce repair wait times and improving the resiliency of buildings to severe weather. House has held the general manager position for the past 18 months. Been will focus on protecting tenants, rehabilitating troubled buildings and finding new opportunities to create affordable housing units. Prior to this appointment, Been was the director of New York University’s Furman Center for Real Estate and Urban Policy. Rodney will focus on the preservation and creation of affordable apartments. Rodney is currently executive vice president for development of Omni New York LLC. The administration’s primary goal is to build and preserve 200,000 units of affordable housing for the next 10 years, and address health and safety repair issues.

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Lancaster Pollard announced Feb. 11 that its affordable housing group will now include Lisa Vecchietti. Based in the Austin, Texas office, Vecchietti will focus on the firm’s investment banking and mortgage banking finance activities for income-restricted and subsidized rental properties. She will be responsible for clients in Louisiana, Texas, New Mexico and Arkansas. Previously, Vecchietti was a senior financial analyst in the affordable housing group for Apartment Realty Advisors (ARA). She also worked at the Texas Department of Housing and Community Affairs (TDHCA) as a program administrator in the Tax Credit Assistance Program (TCAP).

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Kim McLaughlin joined the Boston Financial Investment Management LP team in February 2014. She is senior vice president of syndication and will be responsible for managing investor relationships. She previously worked at Bank of America Merrill Lynch working with LIHTC originations.