Low-Income Housing Tax Credits News Briefs - January 2011

Saturday, January 1, 2011

AFFORDABLE HOUSING INDUSTRY

Harvard University's Joint Center for Housing Studies published a policy brief that discusses issues facing the low-income housing tax credit (LIHTC) program beyond the immediate problems the recession created. Entitled "Long-Term Low Income Housing Tax Credit Policy Questions," the paper discusses LIHTC policy issues such as program targeting, examines current issues surrounding credit investment demand, and briefly discusses ongoing capital needs and asset management for LIHTC properties. The brief draws on existing analyses and a series of interviews with LIHTC practitioners. Overall, the authors conclude that the LIHTC is widely regarded as a successful and resilient program, but they point out a number of long-term issues facing the program, including differences of opinion about the LIHTC's flexibility and whether the federal tax expenditures devoted to the LIHTC are targeted deeply enough. Find a copy of the brief online at www.jchs.harvard.edu.

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The Federal Housing Finance Agency (FHFA) published a proposed rule to establish procedures enabling Federal Home Loan Banks (FHLBs) to merge voluntarily. The Housing and Economic Recovery Act amended the Federal Home Loan Bank Act to permit any FHLB to merge with another FHLB with the approval of its board of directors, its members and the FHFA director. The proposed rule does not relate to any liquidation, reorganization, conservatorship or receivership, nor does it apply to any supervisory actions that FHFA may take respecting the FHLBs. Comments on the proposed rule are due on or before January 25. See the November 26 Federal Register notice for more details.

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The Office of the Comptroller of the Currency (OCC) released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of October 15 through November 14. The list contains only national banks and insured federal branches of foreign banks that have received ratings. Of the 18 evaluations made that month, the OCC said three were outstanding, 14 were satisfactory, one was rated as needs to improve, and none were found in substantial noncompliance. Evaluations are available from links on OCC's web site at www.occ.gov.

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Pacific Northwest law firm Lane Powell PC announced that 17 attorneys from Roberts Kaplan have joined the firm. Their expertise expands Lane Powell's existing practice and industry groups, particularly in the areas of banking, securities, mergers and acquisitions, litigation and specialized real estate. The firm will expand into the Roberts Kaplan office in Portland, Ore.'s ODS Tower, where Lane Powell currently occupies three floors.

DEALMAKERS

The Renato Apartments recently opened in Los Angeles, Calif.'s Skid Row neighborhood. The development offers permanent supportive housing to residents who earn no more than 45 percent of the area median income. Sixty of its total 95 apartments are reserved for chronically homeless persons and those suffering from mental illness. SRO Housing will provide comprehensive on-site services, and all studio apartments will be supported by project-based Section 8 rental subsidy. Residents will also have access to social support, such as free meals and drug and alcohol recovery programs, at the neighboring James Woods Community Center. Enterprise Community Partners provided $11.7 million in low-income housing tax credit (LIHTC) equity for the $25 million project's construction costs. Additional investments came from the Community Redevelopment Agency, the city of Los Angeles, Downtown Mental Health Center, Housing Authority of the City of Los Angeles, Housing Authority of the County of Los Angeles, Los Angeles Housing Department and Union Bank.

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The Jamestown and Posthouse Apartments, senior and special needs affordable developments in Jamestown, N.D. will undergo a major rehabilitation. Planned upgrades to the historic buildings include air conditioning installation, new windows and roofs, energy-efficient boilers and kitchen and bathroom renovations. The properties will continue to serve people age 62 or older and individuals with disabilities. Partial funding for the renovations was provided through a $341,183 LIHTC allocation from the North Dakota Housing Finance Agency, which will bring nearly $2.7 million in equity to the $7.2 million project.

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Raymond James Tax Credit Funds (RJTCF) closed a $200 million LIHTC fund, the Raymond James Tax Credit Fund 36 LLC. The fund consisted of 25 projects in 13 states. RJTCF partnered on this fund with 14 investors – a mix of financial institutions and insurance companies. Each of the developments will serve low-income families and will be located in cities such as San Jose, Calif.; Atlanta, Ga.; Tampa, Fla.; Miami, Fla.; Washington, D.C.; Houston, Texas; and New York, N.Y.

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Grandbridge Real Estate Capital announced that it has recently closed multifamily transactions totaling $143.25 million. The transactions, completed by its various offices, include loans of $21 million for two properties in Fort Wayne, Ind.; more than $4.5 million for Londonderry Oaks Apartments in Denton, Texas; more than $61.1 million for Park at Arlington Ridge I in Arlington, Va.; $7.5 million for Futura Lofts in Dallas, Texas; more than $4.7 million for Park Kensington Club/Stratford Village Apartments in Houston, Texas; $2.5 million for Lamar Place Apartments in Mission, Kan.; $10.6 million for a senior development in Olympia, Wash.; $18.3 million for Orchard Apartments in Dublin, Ohio; $3.5 for Dadeland Vista Apartments in Miami, Fla.; and $9.4 million for Lincolnshire West Apartments in DeKalb, Ill.

STATE

New York State Homes and Community Renewal (HCR) issued a performance report on the state's low-income housing tax credit (LIHTC) portfolio. The "Performance Report of New York State's Low Income Housing Tax Credit Portfolio 1987 – 2010" outlines the history of New York's administration of the federal LIHTC program since its inception. HCR said the state has allocated more than $6 billion in tax credits to assist the development of more than 53,000 affordable housing units. Of the 1200 development that participated in the program, only eight have entered foreclosure. Read the full report online at www.nyschr.org.

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The Louisiana Housing Finance Agency (LHFA) released the findings of its statewide housing needs assessment, which detailed the correlation between economic development and housing, blight and recovery, housing need versus demand for new units, and the role of homeownership. The assessment showed that the number of households in need of affordable housing has risen 2 percent – an estimated 360,000 households – since 2000. The report also recognized LHFA's efforts to address these growing needs, including providing funding for nearly 20,000 units that are currently renting or under construction. LHFA said it will use the data to guide the agency's mission to ensure safe and affordable housing for every Louisiana citizen. View the report on LHFA's web site at www.lhfa.state.la.us.

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The Nevada Housing Division (NHD) released the results of its second quarter multifamily housing survey, which helps government planners and multifamily marketplace participants make long-term plans. Through this data collection, NHD documents new multifamily units and tracks vacancies and rental rates for existing multifamily housing units in the Greater Las Vegas Valley, the Great Reno/Sparks Area, and the state's rural communities. Data from the survey showed that affordable rental rates in the Greater Las Vegas Valley and the Greater Reno/Sparks Area range from 6 percent for studio units to 25 percent for three-bedroom units that are below market rate. A copy of the survey results is available at www.nvhousing.state.nv.us.

PEOPLE IN THE INDUSTRY

Mary R. Wright rejoined the Wisconsin Housing and Economic Development Authority (WHEDA) as its director of multifamily housing. She formerly served as vice president of commercial banking at Johnson Bank, where she was responsible for commercial lending, business development and asset management and helped secure new markets tax credits for the bank. A former 14-year WHEDA employee, Wright managed the federal tax credit allocation and tax-exempt bond financing programs and also worked in the asset management and single-family programs.

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Gov. Bobby Jindal appointed Frank Thaxton III to the Louisiana Housing Finance Agency's board of commissioners. Thaxton, a retired district court judge, fills an at-large position and was sworn in by Chairwoman Allison Jones. Thaxton is currently a self-employed attorney in Shreveport and New Orleans.

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Tax Credit Asset Management (TCAM) promoted Tracy McDermott to managing director. She will design and establish new engagements and coordinate delivery of client services, data systems and reporting. McDermott has more than 17 years of experience in the affordable housing industry and has worked in asset management, acquisitions, fund management, portfolio management and business process redesign.

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International law firm Bryan Cave LLP elected John Dalton to partnership. Dalton practices with the tax advice and controversy client service group. His practice focuses on tax credit transactions, including new markets, low-income housing and historic rehabilitation tax credit transactions and related affordable housing and community development matters. Dalton has represented investors, syndicators, community development entities and developers in structuring, negotiating and closing a wide range of tax credit transactions.

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DLA Piper announced that James F. Miller has joined the firm's federal affairs practice as a partner in the Washington, D.C. office. He formerly worked with Winston & Strawn LLP. Miller represents clients on policy areas including tax, housing, trade, health care, energy and the environment. He also focuses on representing clients before congressional investigatory committees and regularly represents foreign clients before the U.S. State Department, government lending institutions and various House and Senate committees. Miller is a member of the District of Columbia Bar's Tax Section as well as the American Bar Association's Government Affairs Committee and Tax Section.

BONDS

The Ohio Housing Finance Agency (OHFA) board approved $30.8 million in multifamily bonds to assist the development and rehabilitation of affordable housing. OHFA issued Millennia Portfolio more than $6.3 million in bonds to acquire and rehabilitate three properties in New Boston, Newark and Spencerville. The transaction will preserve 138 units for families and individuals. Another rehabilitation project, the Elberon and Woodburn Apartments in Cincinnati, received $6.5 million to redevelop three vacant buildings into senior housing units. A third multifamily bond-assisted development, Westway Gardens in Elyria, benefitted from $18 million to acquire and rehabilitate 300 existing affordable units in Lorain County.

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Martin Building Company (MBC) will construct two mixed-use buildings and renovate two historic warehouses for its Potrero Launch development in San Francisco, Calif.'s Central Waterfront district. The community will include 196 housing units, 39 of which will be set aside for residents earning no more than 30 percent of the area median income. Residents will have access to an on-property grocery store, a subsidized day-care center and 18,500 square feet of rooftop and courtyard open space. In addition, the project will be built to meet LEED Gold certification standards. Financing for the $68 million development includes a $7.4 million Proposition 1C Infill Infrastructure Grant and a $2.1 million Proposition 1C CAL Re-USE Grant. Other funding is being provided by Citibank, Freddie Mac and AFL-CIO Housing Investment Trust.