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Low-Income Housing Tax Credits News Briefs - February 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) released data in December indicating recovery in the housing market. In November, housing permits were 27 percent higher than the previous year and 4 percent higher than the previous quarter. Independent ratings agency Fitch Ratings estimated that 80 percent of growth in demand for multifamily properties between 2009 and 2011 was due to the decline in the homeownership rate. Fitch predicted decreasing rental affordability and the increasing attractiveness of homeownership. The report noted that the key risks to growing multifamily property demand include increased supply, single-family rentals and the uncertain fate of Fannie Mae and Freddie Mac.

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The U.S. Department of Agriculture (USDA) announced in the Federal Register the availability of up to $19.9 million to preserve and revitalize existing rural rental housing. The Dec. 19 notice stated that participants in the demonstration programs will be expected to preserve the affordability of their housing without displacing tenants because of increased rents. One restructuring tool of the Multi-Family Housing Preservation and Revitalization Demonstration program (MPR) is debt deferral for up to 20 years. Other MPR tools include a grant that corrects health and safety violations for nonprofit owners, a zero percent interest loan, a soft-second loan and increased return to owners that contribute cash to fund hard construction costs. Pre-applications in response to the notice will be accepted until Feb. 28 at 5 p.m.

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HUD published a notice in the Federal Register soliciting public comments on its proposal to conduct the 2013 American Housing Survey (AHS). The survey measures the size and composition of the country’s housing inventory. Details of the survey will include changes in the inventory, characteristics of occupants, housing costs, public transportation accessibility, energy efficiency and emergency preparedness. Comments are due 30 days after Jan. 10.

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Federal bank regulatory agencies announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank and intermediate small savings association under the Community Reinvestment Act (CRA). The financial institutions will be evaluated according to their asset-size classifications and those that meet the small asset-size threshold will not be subject to reporting requirements of larger banks. Thresholds are determined by the change in the average of the consumer price index (CPI) for urban wage earners and clerical workers each year. The CPI for the period ending in November 2012 rose 2.23 percent. A small bank or small savings association is an institution with assets under $1.186 billion in either calendar years 2012 or 2011 and an intermediate small bank or intermediate small savings association is one with assets between $296 million and $1.186 billion in either calendar year 2012 or 2011. The asset-size threshold adjustments were effective Jan. 1.

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The National Multi Housing Council (NMHC) and the National Apartment Association released a white paper proposing principles for a reformed housing finance system. The paper argues that smaller housing markets remain underserved and that reformed housing policy should include ongoing federal support. The paper included several principles including better access to federal credit support, broad liquidity support at all times, restriction of federal credit support to the security level, support of private capital and protection of taxpayers through guarantee structure and pricing, imposition of effective capital requirements and reduction in existing portfolios. Download the paper from www.taxcredithousing.com.

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The U.S. Census Bureau’s Small Area Income and Poverty Estimates (SAIPE) program estimates that between 2007 and 2011, the school-age poverty rate (which covers children 5 to 17 years old) showed a significant increase in 26 percent of U.S. counties. The poverty rate for all ages increased in 30.2 percent of counties. For the same time period, the median household income for more than 30 percent of counties also significantly declined. SAIPE uses data from the American Community Survey, federal tax filings, the Supplemental Nutrition Assistance program and census statistics. Download the data from www.census.gov.

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HUD selected Centerline Capital Group to participate in its tax credit pilot program. The pilot program was designed to streamline the approval process for the purchase or refinance of multifamily rental properties through the LIHTC program. It creates a distinct application platform and separate processing track under HUD’s Section 223 (f), the multifamily rental housing mortgage insurance program. The Federal Housing Administration (FHA) believes the pilot program can cut the time needed to review and approve LIHTC applications from approximately one year to between 90 and 120 days. The pilot program was launched in 2012 and includes Chicago, Detroit, Boston, Los Angeles, Atlanta, Denver, Fort Worth, San Francisco and Seattle. Centerline is scheduled to begin submitting loans under the pilot program in early 2013.

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Affordable housing syndicator Raymond James Tax Credit Funds (RJTCF) is opening a new office in Portland, Ore. RJTCF hired Dan Wendle as vice president and director of acquisitions for the firm’s outreach in the Pacific Northwest, Northern California, Nevada and New Mexico. Wendle graduated from Portland State University and worked 13 years for the nonprofit LIHTC syndicator Pacific Northwest for National Equity Fund.

DEALMAKERS

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Housing Investment Trust (HIT) announced a commitment of $23.5 million in union pension funds for construction of a five-story apartment building in downtown St. Paul, Minn. The $31 million West Side Flats Apartments will feature 178 market-rate and affordable housing units, heated underground parking and retail and commercial space on the ground floor. The development will create 160 union construction jobs and first occupancy is scheduled for winter of 2014.

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The Georgia Department of Community Affairs granted nearly $8.7 million tax credits to the Athens Housing Authority for the first phase rehabilitation of the Jack R. Wells neighborhood. The $14 million, three-phase development involves the demolition of 125 public housing units to create 125 new public housing units, 125 affordable housing units and 125 market-rate units. Construction for phase one, which will include a 100-unit midrise for seniors, is scheduled to begin construction in August. Phases one, two and three are expected to be completed in 2014, 2016 and 2017, respectively.

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Ohio developer Homeport announced the grand opening of Elim Manor senior housing in Columbus, Ohio. The 98-unit affordable housing development used a combination of low-income housing tax credits (LIHTCs), Section 202 financing and a Section 8 subsidy. The campus design of the property includes two multistory elevator-serviced buildings and a group of detached single-story cottages. Community amenities include a library, crafts centers, fitness areas and a community kitchen. In-unit features include adjustable kitchen shelving, raised electrical outlets, grab bars in bathrooms, in-unit laundry hookups and security intercoms. Elim Manor received funding through a single bond issuance from the Ohio Housing Finance Agency (OHFA) that was underwritten by Red Capital Markets. Tax credits were also provided by OHFA and the equity investment was provided by Ohio Capital Corporation for Housing through the Huntington Ohio ARRA Fund LLC.

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WNC & Associates Inc. announced the recent closure of two tax credit funds involving 10 investors. The WNC Institutional Fund 37, a $124.5 million federal LIHTC fund, will include nearly 2,000 units of affordable housing across 20 properties in 15 states. Properties include senior, family and mixed tenancy. The $4.7 million Hawaii Tax Credits 36-3, a state tax credit fund, includes a new 160-unit senior housing community in Honolulu.

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Peoples’ Self-Help Housing and the City of Pismo Beach hosted a grand opening for the new Pismo Creek Bungalows affordable housing development in Pismo Beach, Calif. The property features 14 apartments, 12 of which are adaptable. Residents will have access to a community room with meeting space, a kitchen and a laundry facility. The California Tax Credit Allocation Committee, the City of Pismo Beach, the Pismo Beach Redevelopment Agency, Merritt Community Capital Corporation and Wells Fargo Bank provided funding.

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U.S. Bank, Mercy Housing California and New Directions closed financing for El Monte Veterans Housing, a $12.8 million affordable housing property in El Monte, Calif. U.S. Bank is providing a $6.7 million construction loan and nearly $8.8 million in LIHTC equity. The three-story, 40-unit building will offer veterans on-site amenities that include a clubhouse, community room, computer center, elevator, laundry facilities, courtyard and picnic area and garages. New Directions will offer services for residents such as substance abuse treatment, counseling, remedial education, job training and placement and parenting and money management classes. Construction is scheduled for completion in March 2014.

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Lancaster Pollard provided a $1.3 million loan for the renovation of LIHTC property, Carrollton Village Apartments in Carrollton, Ky. The 80-unit complex offers garden apartments and townhomes ranging from one- to four-bedroom units. Renovations for units include new Energy Star appliances, water-saving fixtures, new carpeting/flooring, increased insulation for energy efficiency and upgraded central heat and air conditioning. In addition to exterior improvements, the community building was reconfigured to improve accessibility.

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The Environmental Protection Agency (EPA) presented Housing Vermont, Windham & Windsor Housing Trust and the Brattleboro Food Co-op with its 2012 National Award for Smart Growth Achievement for the redevelopment of the Brattleboro Food Co-op building in downtown Brattleboro, Vt. The EPA award recognizes developments that foster community sustainability and the $14.7 million co-op won in the category of Main Street or corridor revitalization. The four-story, energy-efficient building offers 33,600 square feet of co-op retail space on the first two floors and 24 affordable apartments on the top two floors. A mechanical system traps waste heat from the store’s refrigeration equipment to heat the apartments above. The building also features high-tech insulation, window glazing and a green roof.

 

STATE BRIEFS

The California Tax Credit Allocation Committee (TCAC) released its operating cost minimums for low-income housing tax credit (LIHTC) properties in 2013 and 2014. TCAC gathers operating cost data for all LIHTC properties during the initial federal compliance and extended use periods. TCAC found that operating costs increased 2.6 percent across the state in 2011 and increased 5.1 percent during 2012. The San Francisco Bay Area saw the largest regional increases in the state—between 7 and 16 percent in 2012. Statewide, the top three factors in operating cost increases were water/sewer, administrative and property management costs. More information is available at www.taxcredithousing.com.

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The California Department of Housing and Community Development (HCD) proposed a new state income limit Hold Harmless (HH) policy. The HH policy would restore household income category limits and area median income to the highest level achieved before the U.S. Department of Housing and Urban Development (HUD) made yearly decreases between 2010 and 2012. The proposed policy aims to stabilize rental income for existing and future developments. A public comment period on the HH policy ended in January.

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The Missouri Housing Development Commission has recommended awarding more than $32 million in federal and state tax credits statewide, including more than $13 million for developments in St. Louis. One of St. Louis’ biggest developments is a $100 million redevelopment of the Arcade Building by St. Louis Leased Housing LLC, which was recommended for nearly $1.5 million in federal LIHTCs. Another St. Louis development is The Residences at Jennings Place by R.R. Jennings Developer LLC, a 54-unit affordable housing property for seniors. It was recommended to receive $1.4 million in federal and state LIHTCs.

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New York State Homes & Community Renewal (NYSHCR) announced the 2012 unified funding early application round awardees. NYSHCR awarded $15.3 million to six multifamily developments: Wyandanch Rising Phase 1 in Long Island received $3.9 million, Creekwood Phase II in North Country received $3.8 million, Oak Ridge Apartments in Mid-Hudson received $2.3 million, Sherwood Landing in Southern Tier received $2.9 million, 845 Broadway Apartments in Capital Region received $1.1 million and Frost Street Apartments in New York City received $1.3 million.

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Florida Housing Finance Corporation announced it will delay adopting the proposed 2013 universal application cycle with its related rules indefinitely. Florida Housing cites recent audits and recommendations to streamline the allocation process by the State of Florida’s Auditor General’s Office and the Office of Program Policy Analysis and Governmental Accountability as the reason for delay. An updated timeline has not been finalized. More information is available at the Florida Housing Finance Corporation.

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Ohio Housing Finance Agency is seeking volunteers to test its online LIHTC application beginning in April. More information is available at the Ohio Housing Finance Agency.

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PEOPLE IN THE INDUSTRY

In a 69-24 vote, the U.S. Senate confirmed Carol Galante as commissioner of the Federal Housing Administration (FHA) and assistant secretary of the Department of Housing and Urban Development (HUD). Galante was appointed acting FHA commissioner by President Barack Obama in July 2011.

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The National Association of Home Builders (NAHB) named Eileen O’Grady Ramage as its new chief financial officer. Ramage will manage a budget of more than $65 million in her new role. Ramage graduated with a B.S. in business administration from the Kenan-Flagler Business School at the University of North Carolina in Chapel Hill. She served in senior management positions in the private sector and was a partner at a public accounting firm. She is a certified public accountant and a certified association executive. Ramage succeeds Joe Barney, who retired after 15 years in the position.

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The Federal Housing Finance Agency (FHFA) announced that Stephen Cross, its deputy director of the division of federal home loan bank regulation, will retire in March. Cross has served in the position since October 2008 and was previously chief operating officer at FHFA from September 2009 to December 2011. In 2002 Cross became the director of the finance board’s office of supervision for the Federal Housing Finance Board, a predecessor agency to FHFA. Before that he worked for the Federal Deposit Insurance Corporation and for the Office of the Comptroller of the Currency.

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The Federal Home Loan Bank of Seattle’s affordable housing advisory council named as a new member Cleon P. Butterfield, senior vice president and chief financial officer of Utah Housing Corporation (UHC). Butterfield joined UHC in 1979 and has served in his current positions since 2001. He has taught as an adjunct assistant professor at the University of Utah’s David Eccles School of Business in the School of Accounting and was a recipient of Utah Business Magazine’s Chief Financial Officer of the Year award in 2012. Butterfield began his three-year term on the advisory board on Jan. 1.

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Boston Financial Investment Management LP promoted Sarah Laubinger and Gregory Voyentzie as co-leads of its equity production group. They will have joint responsibility for strategic direction, structuring and pricing new funds and selecting property-level investments. Laubinger joined the firm in 1997 as an acquisitions officer before leading acquisition and investor placement activities. She holds a B.S. in finance from the Carroll School of Management at Boston College. Voyentzie joined Boston Financial in 1999 and has led its originations team for the past six years. He holds a B.S. in finance and accounting and an MBA from the University of Connecticut.

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BONDS

Private nonprofit housing developer Montgomery Housing Partnership (MHP) hosted an open house and ribbon cutting ceremony to celebrate the completion of the Edinburgh House green renovation in Takoma Park, Md. The $3.2 million renovation of the 10-story brick building received financing through the state’s New Issue Bond program. Completed in summer of 2012, renovations on the 45-unit affordable rental community include new kitchens, new bathrooms, three additional accessible units, hard surface recycled flooring and energy-efficient appliances, doors, windows and lighting fixtures. The laundry room and leasing office were renovated and a Thermoplastic Olefin (TPO) roof was installed. Energy-efficient upgrades to the building are expected to yield 15 to20 percent in ongoing energy savings. Edinburgh House became the first recipient of a multifamily loan by Maryland’s Be SMART program, which makes direct loans for the purchase and installation of energy-efficient equipment.

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CORRECTION

A news brief and photo caption on page 17 of the January issue misstated the location of Prestige Senior Living Center. The property is located in Heber City, Utah. We regret the error.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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