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Low-Income Housing Tax Credits News Briefs - June 2014

AFFORDABLE HOUSING INDUSTRY BRIEFS

On April 10, Rep. Charles B. Rangel, D-N.Y., introduced the Renters Tax Credit Act of 2014 (H.R. 4479). The act would provide a renter’s credit for low-income tenants that would be administered and implemented by state agencies through a public-private partnership with property owners and lenders. The credit for any taxable year is equal to the sum of the renter’s credit amounts allocated for months ending during the taxable year. Tenants will not be charged more than 30 percent of their income for rent and eligible renters cannot earn more than 60 percent of the area median income (AMI). Rangel said in a press release that federal housing spending is unbalanced and it favors homeownership over renting by targeting a larger share of subsidies toward higher-income households. Rangel said an increase in rents is one of the most devastating liabilities for those who live in New York City. The legislation would apply to calendar years after 2014 and to taxable years ending after Dec. 31, 2014. The bill is available at www.taxcredithousing.com.

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On April 18, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System released the Large Institution Community Reinvestment Act (CRA) Examination Procedures. These procedures replace Large Institution CRA Examination Procedures published in OCC Bulletin 2006-17 and the Office of Thrift Supervision’s “CRA Examination Procedures for Large Retail Savings Associations.” The newly released CRA procedures for large institutions reflect the revisions made to the Interagency Questions and Answers Regarding Community Reinvestment that was issued Nov. 15, 2013. The regulations include guidance for evaluating community development activities in the broader statewide or regional area. The Large Institution CRA Examination Procedures are available at www.taxcredithousing.com.

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The National Multifamily Housing Council (NMHC) released its April 2014 Quarterly Survey of Apartment Market Conditions on April 29. The survey found that the four indexes of market tightness, sales volume, equity financing and debt financing rose above the halfway mark since January’s survey. The market tightness index rose from 41 to 56, the sales volume index rose from 41 to 52, the equity financing index rose from 50 to 53 and the debt financing index rose from 42 to 63. The highest possible rating is 100. The survey is available at www.nmhc.org.

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On May 1, the OCC released CRA performance evaluations for 41 national banks, federal savings associations and federal branches of foreign banks. The evaluation period was between April 1 and April 30. Of the evaluations, five rated outstanding and 36 rated satisfactory, while no evaluations rated needs improvement or substantial noncompliance. The list of ratings is available at www.occ.gov.

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The Affordable Housing Tax Credit Coalition (AHTCC) recognized the winners of the 20th annual Charles L. Edson Tax Credit Excellence awards on June 11. The award is given to the most outstanding LIHTC properties. Of the 63 applications submitted from 27 states and the District of Columbia, there were seven first place winners and nine honorable mentions. The categories are metropolitan/urban housing, rural housing, special needs housing, senior housing, green housing, public housing and HUD preservation properties. The list of winners is available at www.taxcreditcoalition.org.

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On May 7, Robert Dietz, an economist with the National Association of Home Builders (NAHB), appeared before the Senate Banking Committee’s Subcommittee on Economic Policy to discuss affordable housing. Dietz said that home building and remodeling has generated 274,000 jobs over the past two and a half years, and that the health of housing is key for the overall state of the U.S. economy. Dietz said that employment from new home construction and remodeling has a wide ripple effect, with nearly half the jobs created by building new homes stemming from construction. NAHB provided analysis showing that construction of 1,000 rental apartments, including units developed with LIHTCs, yields 1,130 jobs, and $100 million in remodeling expenditures creates 890 jobs. Dietz stated that typically, housing represents 17 to 18 percent of the gross domestic product.

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Louisiana H.B. 420 was considered by the House Ways and Means Committee on April 8, and is pending further decision. Sponsored by Rep. Kevin Pearson, the legislation would establish criteria for valuation of low-income housing property for purposes of assessment of ad valorem taxes: voluntarily deferred. Currently, state law requires that fair market value of real and personal property to be determined using generally recognized appraisal procedures of the market approach, the cost approach and the income approach. The proposed law would require that all benefits and burdens of ownership to be reflected in the calculation of anticipated new income when determining the fair market value of low-income housing property. Calculating valuation in this way would lead to higher property taxes. The bill would be effective Jan. 1, 2015. The bill has been in the Louisiana House Ways and Means Committee since March. H.B. 420 is available at www.taxcredithousing.com.

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On April 11, Connecticut Governor Dannel P. Malloy, alongside Evonne M. Klein, commissioner for the Connecticut Department of Housing (DOH), and Eric Chatman, president and executive director of the Connecticut Housing Finance Authority (CHFA), announced $7.7 million in federal low-income housing tax credits (LIHTCs) and $62.4 in state capital funding for affordable housing. Funding will go toward the construction and rehabilitation of 694 affordable rental apartments in 16 properties across the state. Malloy said in a press release that the funding announced will result in approximately $116 million in private investment for Connecticut’s housing supply. Klein said in the same press release that development activity from the investments totals more than $226 million. A total of 1,319 jobs are also expected to be created. The properties include 24 Colony Street in Meriden, developed by the Westmount Development Group; Lawnhill Terrace in Stamford, developed by the Rippowam Corporation; Maplewood Court in Bridgeport, developed by the Mutual Housing of Southwest Connecticut; and Sheldon Wyllys in Hartford, developed by Sheldon Oak Central.

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On March 12, the West Virginia Housing Development Fund announced the release of its 2013 annual report. The report covers the fiscal year from June 2012 to June 2013. For this period, there were 507 units produced with LIHTCs, 441 units produced with bonds and 11 units produced through the HOME program. A total of 1,942 net units were produced. To date, more than 13,500 affordable housing units throughout the state were funded through the LIHTC program. The report is available at www.taxcredithousing.com.

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On April 16, New York Gov. Andrew M. Cuomo announced $95 million in LIHTC awards to construct or preserve affordable housing throughout the state. Awards were given to 37 shovel-ready developments for 2,100 units, which are anticipated to leverage more than $435 million in grants, loans and private investments. Funds were made available through the New York State Homes & Community Renewal Unified Funding Application, which allows an applicant to file for several funding sources for affordable multifamily developments. Some of the properties include Salina Crossing, City of Syracuse, Onondaga County, with $5.1 million awarded to Housing Visions Consultants, Inc. for the restoration of four buildings and the construction of six buildings that will produce 49 units; Eastman Gardens, City of Rochester, Monroe County, with $3.6 million awarded to Home Leasing LLC for the re-use of the historic Eastman Dental Dispensary that will produce 57 units of mixed-income housing and 43 affordable housing units; Walnut Avenue Homes, City of Niagara Falls, Niagara County with $2.3 million awarded to Housing Visions Consultants Inc., for the revitalization of eight vacant, blighted or underutilized properties that will produce 41 units of affordable housing. The full list of awards is available at www.taxcredithousing.com.

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On April 28, the Minnesota Housing Finance Agency (MHFA) announced the availability of nearly $70 million in funding. The funds are available through the 2014 consolidated request for proposals (RFP) and $12.5 million in 2015 round-one LIHTCs. A total of 32 Section 8 project-based vouchers are also available through the Saint Paul Public Housing Agency. Pending legislative approval for H.F. 2031, up to $40 million in housing infrastructure bond proceeds will also be available to multifamily and single-family property developers. MHFA expects to update funding totals after the legislative session ends May 19. Applications for the 2014 multifamily RFP and 2015 round one LIHTCs were due June 10. The notice is available at www.taxcredithousing.com.

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On April 28, the Wisconsin Housing and Economic Development Authority (WHEDA) announced more than $12 million in LIHTCs for 25 affordable housing developments across the state. A total of 1,133 units will be constructed or preserved. WHEDA received 54 applications requesting nearly $30 million. Developments will be located in the towns and cities of Appleton, Bayfield, Brillion, Crandon, Eau Claire, Green Bay, Kenosha, Ladysmith, Madison, Menomonie, Milwaukee, Mole Lake, Monona, Oshkosh, New Richmond, Rice Lake, Ripon, Schofield, Waterloo and Whitewater. Tax credits will be awarded over a 10 year period and are worth more than $121 million. A list of 2014 tax credit award recipients is available at www.taxcredithousing.com.

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On April 30, the Washington State Housing Finance Commission announced that seven developments will receive $54 million in LIHTCs. This is the third group of developments to receive credits this fiscal year. Vancouver Affordable Housing received $3.8 million for Lincoln Place, a 30-unit studio-apartment complex offering housing and supportive services for chronically homeless adults. Catholic Housing Services of Western Washington received $8.7 million for Bakerview Family Housing, a 50-unit complex of townhouses for farmworkers. Trillium Housing Services received $13.8 million for Mason Avenue Apartments in Tacoma, a garden-style apartment community for low- and very-low income households. Kennewick Housing Authority received $4.6 million for Volland Street, a 31-unit development of housing for very low-income, formerly homeless and disabled residents. Genesis Housing Services received $13.7 million for Granger-Prosser Family Housing, a two-development property, each providing 51 apartments for farmworkers. Yakima Housing Authority received $4.3 million for Toppenish Family Housing, a 30-unit property available for farmworkers. Sunnyside Housing Authority received $5.8 million for Sunnyside Family Housing, a 40-unit complex for farmworkers.

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DEALMAKERS

On April 10, WNC, a national investor in real estate and community development initiatives, announced the completion of financing for the renovation of Huntington Plaza Apartments in the Los Angeles suburb of Huntington Park. The senior housing property, previously known as City Housing Rugby, was financed with $5.6 million in low-income housing tax credit (LIHTC) equity from WNC. Citibank and the City of Huntington Park provided additional financing. Total cost for the acquisition and rehabilitation of the development was $30.2 million. The property is a four-story building with 184 one- and two-bedroom affordable housing units. Amenities include a community room, fitness center, garden area and computer center. USA Properties Fund, a real estate development organization specializing in the creation of senior and family communities, rehabilitated Huntington Plaza Apartments, which is available to seniors earning between 50 and 60 percent of the area’s median income (AMI).

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Centerline Capital Group on April 14 announced a $4.8 million Federal Housing Administration HUD 223(f) loan to refinance Foxwood Apartments, a multifamily property in Panama City, Fla. Jim Gillespie, managing director at Centerline said that the company completed the most recent refinance using the FHA 223(f) program under the Three-Year Waiver Rule to provide permanent fixed-rate financing. The property received a long-term Section 8 housing assistance payments contract for the units. Foxwood Apartments includes 13 two-story apartment buildings with 100 affordable housing units.

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The completion of The Barn and Academy Lofts at the Barn, an affordable housing property in Albany, N.Y.’s Arbor Hill neighborhood, was announced April 18. The development was constructed with $2.4 million in LIHTCs and $5.4 million in low-cost financing through the first round of the Regional Economic Development Council initiative. Through the initiative, the Capital Region Economic Development Council developed a plan for the Albany region to create jobs and support economic growth. Empire State Development also provided $4.5 million in Restore NY grant funding, and $350,000 was provided by local support through the Federal Home Loan Bank and Historic Tax Credits awarded. The property is located at the former St. Joseph’s Academy. It will provide more than 14,000 square feet of space for work studios, rehearsal suites, performance space, a digital media center, retail space and offices for the professional artist community. There will be 22 affordable apartment units and the development is expected to yield close to $10 million in local economic activity.

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On April 28, Enterprise Community Investment announced an investment of more than $20 million in LIHTC financing for the construction of Vermont Villas and Whittier Place in Los Angeles. The properties will be available for low-income and formerly homeless families, veterans and seniors with special needs. Vermont Villas will set aside all 79 units for seniors with special needs who are homeless, have a chronic illness or physical disability, or frequently use public health services. The units are available for residents earning no more than 30 percent of the AMI. Whittier Place Apartments will provide 25 units and 75 percent of these units will be set aside for formerly homeless households, including families with children under the age of six. Both properties will provide one- and two-bedroom apartments and studio units. Affirmed Housing and PATH Ventures worked to develop Vermont Villas; East LA Community Corporation helped with development of Whittier Place Apartments. Construction is expected to be complete in summer 2015.

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The grand opening of Belle Terre, Eden Housing’s first development in Lafayette, Calif., was held May 16. Belle Terre, a senior affordable housing property, provides 46 new rental homes to residents earning 20 to 50 percent of the area AMI. Of this total, 17 apartments were targeted to seniors with physical disabilities. Amenities include an exercise room, a community room, two sunrooms and a computer learning center/library.

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Cass Corridor Neighborhood Development Corporation, Ginosko Development Corporation and Great Lakes Capital Fund (GLCF) broke ground on Cass Plaza & Davenport Buildings on April 23. GLCF invested nearly $9 million for the restoration costs, which will total $16.7 million. The development will provide 47 affordable housing units and is expected to support 275 jobs.

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The groundbreaking for Rene Cazenave Apartments in San Francisco was held April 29. The affordable housing property is being developed by Community Housing Partnership (CHP) and BRIDGE Housing. Rene Cazenave Apartments will provide 120 units in an eight-story building. It will include 12 one-bedroom units and 108 studios. Residents are extremely low-income, formerly homeless individuals who were referred by the San Francisco Department of Public Health’s Direct Access to Housing program, a permanent supportive housing program targeting low-income San Francisco residents who are homeless and have special needs.

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Boston Capital announced April 30 that it is investing in the construction of the Lumine Apartments and Ledges Apartments in Boulder, Colo. Lumine Apartments will provide 69 units for low-income families earning 60 percent or less of the AMI and will have 35 one-bedroom, 32 two-bedroom and two three-bedroom garden-style apartments. Ledges Apartments will provide 61 units for families earning 60 percent or less of the AMI and will have nine studio units, 36 one-bedroom and 16 two-bedroom garden-style apartments. Both Lumine Apartments and Ledges Apartments will comprise four, three-story apartment buildings and amenities will include a barbecue area. Developers Koelbel and Company and Allison Management will use LIHTC equity for the construction. The developments are expected to generate $13.4 million in local salaries and yield nearly 200 new jobs.

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On May 9, Raymond James Tax Credit Funds Inc. (RJTCF), a national syndicator of affordable housing, announced the completed syndication of a $72.5 million LIHTC fund. The Raymond James California Housing Opportunities Fund III LLC provided equity financing for the construction or rehabilitation of 628 units of affordable housing throughout the state. There are six affordable housing developments located in Long Beach, Santa Monica, San Diego, San Francisco, San Jose and Sacramento. The fund had 10 investors.

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New Hampshire Housing Finance Authority (NHHFA) announced May 6 that it has awarded Green Mountain Development Group $1 million in HOME funding to add to the Quail Hollow senior living community. Green Mountain will add a new building, Quail Rigde, to Quail Hollow, in Lebanon, N.H. Quail Ridge will provide affordable and market-rate rental units. NHHFA also provided LIHTCs to Quail Ridge. Quail Ridge will be the fourth phase of construction at Quail Hollow.

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PEOPLE IN THE INDUSTRY

Richard Lillard has been reappointed as chair of the Oklahoma Housing Finance Agency (OHFA) by Gov. Mary Fallin. His term will expire May 1, 2019. Lillard is a Miami, Okla. businessman and has served as an OHFA trustee since 2001 and as chairman since 2002. Lillard previously served as director and chairman of the Oklahoma Industrial Finance Authority and the Oklahoma Development Finance Authority. Lillard also owns Richard S. Lillard Company, which specializes in group benefits. In addition, Lillard is a member of the National Conference of State Housing Boards.

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On April 15, Miller-Valentine Group announced the addition of Michael Riechman to the company. Riechman joined the real estate company as managing director for residential management. He will lead Miller-Valentine Group’s affordable housing capital markets team, working on the strategy for affordable housing acquisitions. Riechman joined the company as a partner. Previously, Riechman was managing director and head of the affordable housing equity division at Centerline Capital Group, where he worked with acquisition deals. Prior to that, Riechman was the managing director for RBC Capital Markets where he led the tax credit equity group. Riechman holds an MBA from American University–Kogod School of Business.

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Boston Financial Investment Management announced April 29 that Bob Courtney will join the company as senior vice president of syndication. Formerly the senior vice president manager of operations with PNC, Courtney managed the originations group that worked with LIHTC investment and lending opportunities.

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BOND

On April 25, Freddie Mac announced a new initiative to make direct purchases of tax-exempt loans. Through the initiative, Freddie Mac’s multifamily division will purchase tax-exempt loans from its Targeted Affordable Housing (TAH) lender and combine and securitize the loans into M-Deals. M-Deals have a senior/subordinate structure with a guaranteed A-piece being publicly sold and the first loss B-piece being sold to private investors; have collateral backing the senior/subordinate securities at fixed-rate loans and up to 35-year amortization with up to an 18-year balloon; and have an expected offering size of about $300 million of aggregated direct purchase tax-exempt loans and related taxable securities. Under this loan initiative, Freddie Mac says, simplified documents and processes reduce legal fees, private purchase efficiencies provide a 40 percent reduction in closing costs and the loans have the same underwriting and credit standards as the Freddie Mac 4 percent LIHTC bond financing.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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