Low-Income Housing Tax Credits News Briefs - December 2012

Saturday, December 1, 2012

AFFORDABLE HOUSING INDUSTRY BRIEFS

Novogradac & Company opened a new office in St. Louis, Mo. on Nov. 1. Among other tax and audit services, the St. Louis office will specialize in low-income housing tax credit (LIHTC) and new markets tax credit (NMTC) programs, as well as renewable energy and historic rehabilitation tax credits (HTCs). The St. Louis office will have a new staff, with Michael Kressig as partner. Previously, Kressig was partner in charge of Sabino & Company’s assurance services group and directed the firm’s real estate services practice group. His background in LIHTC, NMTC and HTC is primarily in forecasts, projections, deal structuring and related services. Also joining the St. Louis staff is new firm principal Thomas Berry, who worked for Sabino & Company and has experience in real estate, tax consulting, compliance issues, finance modeling and deal structuring for historic rehabilitation and affordable housing developments. Manager Tina Matzen was previously with Sabino & Company and her experience includes auditing, financial accounting and consulting services. Kressig, Berry and Matzen are certified public accountants in Missouri. Supervisor Joan McKinney was a tax credit compliance manager for Sabino & Company and has more than 24 years in cost and financial accounting. She specializes in Missouri state HTCs, cost certification and compliance. The St. Louis office is Novogradac’s 15th in the nation.

***

The Treasury Department and the Internal Revenue Service (IRS) announced last month that they will expand the availability of housing for Hurricane Sandy victims. They will waive the low-income housing tax credit (LIHTC) rules that would prohibit low-income housing owners to rent to victims of Hurricane Sandy who do not qualify as low-income. The Treasury and IRS will temporarily suspend income limitation requirements and non-transient requirements for LIHTC properties to provide housing for Hurricane Sandy disaster victims and their families. President Barack Obama declared major disaster areas in Connecticut, New York and New Jersey, making federal funding available to victims through the Federal Emergency Management Agency (FEMA). More information is available at www.irs.gov.

***

The Office of the Comptroller of the Currency recently released a list of Community Reinvestment Act (CRA) performance evaluations. The evaluations became public during the period of Oct. 1 through Oct. 31. The list of evaluations contains only national banks, federal savings associations and insured federal branches of foreign banks that received ratings. Of the 30 institutions, three were rated outstanding: Central National bank in Junction City, Kan., Flowers National Bank in Cainsville, Mo. and Standing Stone National Bank in Lancaster, Ohio. Twenty-seven banks were rated satisfactory and none were rated in need of improvement or substantial noncompliance. Download copies of the evaluation at www.occ.gov.

***

The Center for Housing Policy and the Center for Neighborhood Technology published, “Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation,” a report revealing that the location of an affordable housing development can add significant transportation costs to a household’s monthly expenses. Research found that housing and transportation expenses for households in the 25 largest U.S. metro areas rose 44 percent between 2000 and 2010. This rate outpaced the growth of income by an average of about 1.8 times. In the Detroit, Mich. metro area, these costs outgrew income by 4.5 times. For the average moderate-income renter, housing and transportation costs consume 55 percent of income or as high as 61 percent in Los Angeles, Calif. One of the key recommendations of the report to make transportation expenses more manageable is the use of low-income housing tax credit (LIHTC) to preserve existing affordable homes near job centers and public transit stations. The report suggested that LIHTC, along with other governmental funding, should be used to recapitalize and modernize location-efficient homes. Download the report at www.taxcredithousing.com.

***

The Freddie Mac Multifamily Research Group released its real estate market demand forecast. The study predicts a slow but steady economic growth, with an additional 1.7 million households expected to enter the multifamily rental market by 2015. The report found that large economic challenges and a high rate of foreclosures in the single-family housing market have boosted the multifamily market, which has grown 16 percent or 3 million units since 2007. The study proposed three likely scenarios for multifamily rentals based on different economic climates. A base scenario would consist of slow economic growth and 3.1 million new families moving in to rental units. Accelerated recovery would mute multifamily rentals with competition from the owner market and a no recovery scenario would likely still entice 1.6 million households to choose renting over ownership. Under all three scenarios, the report predicts the multifamily market will remain healthy through 2015. The report is available at www.freddiemac.com.

***

The Federal Home Loan Bank of Chicago announced the winners of its 2012 Community First Partnership Awards. Now in its third year, the awards recognize achievement in affordable housing and community economic development between the bank’s member institutions and their nonprofit partner organizations. Facing Forward to End Homelessness received a $10,000 award for its partnership with First Eagle Bank. Together they offer financial literacy and economic self-sufficiency support to local homeless women and families. Another winner was DuPage Habitat for Humanity, which received $5,000 for its partnership with BMO Harris Bank. Habitat and BMO Harris offer affordable housing to families with no-cost mortgage servicing and down payment assistance.

***

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Housing Investment Trust (HIT) announced a newly opened Southern California office to be headed by Ted Chandler, executive vice president/Western region and chief operating officer of HIT. With 13 years of mortgage banking and affordable housing markets experience in Southern California, Chandler will manage relationships with Southern California developers, lenders, public officials, labor organizations and pension fund managers at HIT’s new Pasadena office. Before joining HIT, Chandler worked for Fannie Mae, Boston Redevelopment Authority and the Massachusetts Industrial Finance Agency in Boston, Mass.

***

The U.S. Census Bureau released the most recent American Community Survey in October. The survey covers population and housing statistics for communities across the country of 20,000 or more residents between 2009 and 2011. The study found a 15 percent poverty rate during the reported years and that 53 percent of renters in the U.S. spent 30 percent or more of their household income on housing. Find the report at www.census.gov.

DEALMAKERS

The AFL-CIO announced that its housing investment trust (HIT) committed $15.7 million toward construction of the City Walk Apartments in the Uptown neighborhood of Minneapolis, Minn.. The $20 million mixed-use development also received a low-income housing tax credit (LIHTC) reservation of almost $500,000 from Minnesota Housing Finance Agency last year. The property will include 92 housing units, underground parking, a restaurant and retail space. Construction is expected to generate 100 union construction jobs.

***

Boston Capital and New Hampshire-based developer Great Bridge Properties LLC will build a 33-unit multifamily development, Tri-Town Landing Phase II in Lunenburg, Mass. The LIHTC-funded property will feature six one-bedroom, 24 two-bedroom and three three-bedroom units. In-unit amenities include Energy Star kitchen appliances and balconies. Common amenities include a laundry room on each floor, a community room with kitchenette, elevator access, a fitness center and a playground. Located near schools, shopping and public transportation, the property will house families earning 60 percent or less of the area median income (AMI). Construction of the building will create 50 local jobs and will generate $3.4 million for the area. Once completed, Tri-Town Landing Phase II will be operated as one development along with the 66-unit Tri-Town Landing Phase I.

***

Englewood Development Company Inc. announced it will open a $10.2 million affordable senior housing community in Youngtown, Ariz. The three-story, 65-unit Aurora Village will be within walking distance of a shopping center, health care centers and the town hall. The development received more than $1 million in LIHTC this year from the Arizona Department of Housing. Other funding came from the National Equity Fund Inc., Bank of America-Merrill Lynch, the Town of Youngtown and Youngtown Senior Housing LLC.

***

The Westfield Senior Citizens Housing Corporation received a $1 million grant from the Federal Home Loan Bank of New York to finance the Village at Garwood affordable housing development for seniors in Garwood, N.J. Amenities for the 71-unit property will include on-site parking, laundry facilities, a community room and resident storage units. The 83,000-square-foot- development will be constructed on the former site of St. Anne’s School, which was built in 1950 as a private special education facility. The housing development will also be funded by LIHTCs, a New Jersey Housing and Mortgage Finance Agency construction loan and the Westfield Senior Citizens Housing Corporation.

***

The Ohio Capital Corporation for Housing (OCCH) reported that the Ohio banking industry has set a record with the largest affordable housing capital investment in a single year. Fifteen banks invested $180 million in OCCH’s 22nd syndicated equity fund. This influx of capital will help build 37 properties totaling 1,700 affordable housing units.

***

Great Lakes Capital Fund (GLCF) used LIHTCs to help provide $9 million in equity for Irving Green Apartments on the former site of the abandoned Indy East Motel in Indianapolis, Ind.’s Irvington neighborhood. The former motel was abandoned and had become a crime magnet. All 50 units at the new Irving Green Apartments will be dedicated low-income units, with nine units set aside for households earning 30 percent of the AMI and the rest of the units divided among households earning 40 to 60 percent of the AMI. GLCF also provided the development team and a $400,000 predevelopment loan. GLCF partners include Indiana Housing and Community Development Authority, the city of Indianapolis, Marion County, Local Initiatives Support Coalition, One 10 Studio, Meyer Najem Construction, First Financial Bank and McKinley Development.

***

Leisure Acres in East Peoria, Ill. will be rehabilitated as a LIHTC community for seniors. Tax credit allocations approved by the Illinois Housing Development Authority board will generate an estimated $7 million in private equity for the development. Originally constructed in 1974, the 100-unit Leisure Acres will have new kitchens, bathrooms, windows and energy-efficient upgrades as part of its renovation. Units will be available to seniors earning 60 percent or less of the AMI and construction is expected to begin this spring.

STATE BRIEFS

The office of California State Treasurer Bill Lockyer announced that the first Tax Credit Allocation Committee (TCAC) meeting for 2013 is scheduled for Jan. 16. The committee can only consider 4 percent tax-exempt bond applications that were submitted before Nov. 16. The rest of the committee’s schedule will be announced on their website. Although deadlines for competitive applications are typically scheduled for the third week of March, TCAC stated that the 2013 deadline may be moved up to the first week of March. More information is available at www.treasurer.ca.gov/ctcac.

***

In other TCAC news, the committee released a list of proposed regulation changes for 2013. Among the list of 22 proposed substantive changes is designating the city of Los Angeles as a new geographic apportionment region for 2014, eliminating the requirement that at least 50 percent of a 9 percent applicant’s requested amount of credit must remain in a geographic apportionment to receive funding and prohibiting sponsors from withdrawing competitive applications in order that another application of theirs may succeed. TCAC also drafted a list of 11 proposed clarifying or conforming changes. Examples include clarifying that combined new construction and rehabilitation developments need to earn sustainable building points for both portions and defining how 30 percent area median income units must be arrayed across a range of unit sizes for competitive scoring. Four public hearings were scheduled for November to solicit comments on the proposed changes. TCAC staff plans to present the changes to the committee for adoption in January 2013. Find more details at www.taxcredithousing.com.

***

In October, Maine State Housing Authority received its largest number of applications for the competitive 9 percent LIHTC program in more than 20 years. The 19 submitted applications represented more than 980 units and requested $9.8 million in 2013 tax credits. Maine has approximately $3 million in tax credits available for allocation. According to the agency’s qualified allocation plan, applicants not initially selected for an award will be ranked and placed on a waiting list. Any unused credit will be made available to those on the waiting list in rank order priority.

PEOPLE IN THE INDUSTRY

Eden Housing announced the appointment of Anthony “Tony” Ma as its chief financial officer (CFO). Ma will head corporate and real estate development accounting, finance and asset management and information technology operations for Eden Housing, its affiliates and entities. Formerly with Oakland Housing Authority, Ma has nearly 30 years of experience in finance and accounting. He specializes in finance management, investments and operations. Ma assumed his new post Oct. 30.

***

The Vermont Affordable Housing Coalition (VAHC) added John Broderick, Sara Kobylenski and George Mathias as ‘at large’ members of its 2012 and 2013 VAHC steering committee. The now eight-member committee also serves as VAHC’s board of directors. Broderick has been the executive director of the Regional Affordable Housing Corporation in Bennington since 2009. His experience includes serving as the state advocacy director for the Supportive Housing Network of New York. Kobylenski has been the executive director of the Upper Valley Haven in White River Junction since 2009. Mathias has been the chief operating officer of Gilman Housing Trust Inc. since 2004.

***

Great Lakes Capital Fund (GLCF) added three new employees to its Lansing, Mich. headquarters and one employee to its Chicago-area office. Kelly Graf will be the new title operations assistant in Lansing. She graduated with a B.A. from Michigan State University and her experience includes working for a real estate attorney and a local title company. Tim Shand will join the Lansing staff as information technology director and network administrator. He operated his own consulting business, Dynamic Computer Systems, of which GLCF was a client. Josh White will be the asset manager for the Lansing team. Previously he was an asset manager of a $200 million portfolio of distressed multifamily assets in receivership, an assistant general manager for a local developer and sales manager for Philip Morris USA. He holds a real estate license from the State of Michigan and an MBA from Northwood University. Paul DeKruiff will join the Chicago (Tinley Park) office as a loan originator. His 20 years of experience includes working for a nonprofit that develops community centers in at-risk cities, managing a portfolio of commercial loans and serving as a multifamily adviser and broker for institutional intermediaries. He holds a B.S. in finance from Illinois State University.