Low-Income Housing Tax Credits News Briefs - March 2015

Sunday, March 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

The United States Supreme Court heard arguments Jan. 21 concerning the disparate impact housing case, Inclusive Communities Project Inc. v. the Texas Department of Housing and Community Development. The arguments were heard to determine what constitutes discrimination in affordable housing. Disparate impact is a theory that discrimination does not have to be intentional, that discrimination takes place if policies or decisions result in harming a protected group, regardless of intent. The claim by Inclusive Communities Project is that the Fair Housing Act of 1968 forbids not only intentional discrimination, but disparate impact, and that Texas officials awarded federal low-income housing tax credits (LIHTCs) mostly to poor, black neighborhoods in Dallas, while largely keeping LIHTC properties out of wealthy, white neighborhoods. The state claims that there is no intentional discrimination and that if the lawsuit is upheld, local governments would be forced to use racial quotas to avoid violation. Lower courts sided with Inclusive Communities Project. A decision in this case is expected before July. Documents related to the case are available at www.taxcredithousing.com.

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The Joint Committee on Taxation released the report, “Background Information on Tax Expenditure Analysis and Historical Survey of Tax Expenditure Estimates” (JCX-18-15) on Feb. 6. The report covers the concept of tax expenditures; the measurement of tax expenditures; the efficiency, equity and administrability considerations relating to tax expenditures; and historical data on tax expenditures. The report found that, in general, tax expenditures, once adopted, tend to stay in place. The hearing was held to consider what lawmakers can learn from the effort leading to the passage of the Tax Reform Act of 1986. The report was compiled for a hearing scheduled Feb. 10, entitled, “Getting to Yes on Tax Reform: What Lessons Can Congress Learn from the Tax Reform Act of 1986?” The report is available on the tax expenditures page at www.novoco.com.

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The Office of the Comptroller of the Currency (OCC) released two Community Reinvestment Act (CRA) performance evaluations for national banks, federal savings associations and insured federal branches. The first set of 30 evaluations was released Jan. 23. Of those 30 evaluations released, two rated outstanding, 28 rated as satisfactory and none rated as needs to improve or substantial noncompliance. The evaluation period was from Dec. 1, 2014, through Dec. 31, 2014. The second set of 48 evaluations was released Feb. 2. Of those 48 evaluations released, eight rated as outstanding, 40 rated as satisfactory and none rated as needs to improve or substantial noncompliance. The evaluation period was Jan. 1 through Jan. 31.

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On Jan. 27, R4 Capital announced $447 million raised and the close of $386 million in LIHTC equity in 2014. The equity was raised through a combination of multi-investor and proprietary LIHTC funds. The firm manages five multi-investor funds and four proprietary funds. The national LIHTC syndicator and asset manager also added 32 properties to its portfolio and 11 new investors in 2014. This brings the firm’s number of properties to 98 in 26 states, the District of Columbia, Puerto Rico and the Northern Mariana Islands. It totals 28 investors. R4 Capital raised more than $720 million in equity since 2012, making 2014 the second consecutive year R4 Capital doubled its volume from the previous year. R4 Capital expects to close on $61 million in Q1 2015.

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Boston Financial Investment Management LP announced Jan. 30 that it raised $471 million in LIHTC equity in 2014. As of Dec. 31, 2014, $439 million of the total $471 million closed, with the remainder to close in early 2015. The LIHTC equity helped provide 48 properties for the elderly and families across the United States. The company syndicated the LIHTC equity through two national multi-investor funds and five active proprietary funds.

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Michel Associates Ltd., a real estate syndication firm that invests in affordable housing, announced Jan. 14 the closing of the Countryside Corporate Tax Credits Fund XXI, a $45 million LIHTC fund. Fund XXI will support 11 multifamily properties that will provide 929 units. Of these properties, seven are family properties, one is senior property, one is special-needs property and two are properties with both seniors and families. The properties are located in California, Maine, New Mexico, North Dakota, Oregon, Pennsylvania, Rhode Island, Washington and West Virginia.

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On Dec. 22, 2014, the Richman Group Affordable Housing Corporation, a LIHTC syndicator, announced $240 million for USA Institutional Tax Credit Fund 98 (Fund 98), and the closing of USA Institutional Tax Credit Fund 100 (Fund 100). Fund 98 comprises 30 properties in 21 states and U.S. territories. There are 12 investors for Fund 98, including insurance companies and banks. Fund 100 will have $121 million in equity from several bank investors. A third transaction is a proprietary fund that will provide $113 million. Through these transactions, 6,000 units will be provided for families, seniors and special-needs tenants.

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STATE BRIEFS

On Jan. 21, the Alabama Housing Finance Authority (AHFA) released the, “We Are Affordable Housing: 2014 Annual Report.” The report provides an overview of the success of AHFA’s multifamily programs such as the LIHTC program, the HOME program and the homebuyer Step Up mortgage program. Results for the multifamily programs showed 537 developments financed with both LIHTCs and HOME funds, while 33 developments were financed with tax-exempt bonds. The total number of developments constructed with all of AHFA’s multifamily programs was 650, yielding 34,094 units. The report is available at www.taxcredithousing.com.

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The Virginia Housing Development Authority (VHDA) amended regulation 13 VAC 10-180, effective Jan. 1. Amendments include replacing the definition of “revitalization area” with the definition contained in the Virginia Housing Development Authority Act. The amendments also reduce the points awarded to developments in revitalization areas; remove the point category for developments in a qualified census tract because these developments automatically meet the revised definition of revitalization area; reduce the percentage of units required to be set aside at more restrictive rent or income limits to receive maximum points for imposing more restrictive limits; add a point category for developments applying for both 4 percent and 9 percent credits; add an additional point category for certain developments giving first preference to persons with intellectual or developmental disabilities; and effective Jan. 1, 2016, eliminates the point category for evidence of proper zoning and make such documentation a mandatory item. The amended regulations were effective Jan. 1, except as noted, and are available at www.vhda.com.

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The North Carolina Housing Finance Agency (NCHFA) released information about the 2015 LIHTC preliminary applications Jan. 23. NCHFA received 171 preliminary applications in 59 counties. NCHFA announced that applicants may provide comments on their experience with the new application system and any suggestions for improvements. The full list of applicants is available at www.taxcredithousing.com.

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The Pennsylvania Housing Finance Agency (PHFA) announced Jan. 4 that it included a section for scoring on passive housing in its LIHTC application. Passive housing is a construction concept in which the building is completely energy efficient. PHFA allowed up to 10 points for Passive Housing Certification.

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DEALMAKERS

EAH Housing, a nonprofit affordable housing development corporation, announced Jan. 5 that the first phase of construction for Rice Camp Senior Apartments in Kauai County, Hawaii, is scheduled for completion this month. The land where Rice Camp Senior Apartments will be located was purchased by Kauai County for $2.3 million from Westridge Properties LLC in October 2012. Kauai County leveraged the land and $1.25 million in HOME funds for $15 million in federal and state low-income housing tax credits (LIHTCs) from Hawaii Housing Finance and Development Corporation. Rice Camp Senior Apartments is a 60-unit affordable housing community on two parcels. The complex is being developed by the Vitus Group in partnership with Kauai County and EAH Housing. Rice Camp comprises six single-story buildings and one two-story building, with one- and two-bedroom apartments. Amenities for Rice Camp include community garden plots, a community center with management offices and a space to hold community activities. EAH Housing is accepting rental applications.

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The Low Income Housing Institute (LIHI) announced Jan. 5 that it will begin taking applications for the preleasing of the Bellevue Apartmentdevelopment in downtown Bellevue, Wash. Financing includes $10 million in LIHTCs and $635,000 from the city of Bellevue. Another $500,000 was granted to LIHI through the Federal Home Loan Bank Seattle’s affordable housing program, while the State Housing Trust provided a $2.5 million grant. Construction costs are expected to total $16.6 million. The Bellevue Apartment development, which has yet to be given an official name, will provide 57 units of affordable workforce housing. Units will be made available to families and individuals earning 60 percent or less of the area median income (AMI). The property will include 12 units for homeless families and individuals, a minimum of eight units for veterans and three units for families with children with developmental disabilities. Construction is expected to be complete by the end of March.

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Dominium, an apartment development and management company, announced Jan. 23 the acquisition of Village at Delray in Delray Beach, Fla., and the acquisition of Taylor Pointe Apartments, in Vero Beach, Fla. Village at Delray is a gated community that provides 144 one-, two- and three-bedroom affordable apartments. Amenities include a swimming pool, three playgrounds, a soccer field and basketball court, as well as a library and business center for residents. Taylor Pointe is a 168-unit affordable living community with amenities such as a swimming pool, wooden picnic areas, a basketball court and a playground. Dominium will also renovate the clubhouse for Taylor Pointe Apartments. Other upgrades will include landscaping and roof repairs.

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PEOPLE IN THE INDUSTRY

The District of Columbia Department of Housing and Community Development (DHCD) announced Jan. 2 that Polly Donaldson will be acting director of the agency. Donaldson’s responsibilities will include leading DHCD to create and preserve opportunities for affordable housing and economic development and to revitalize underserved communities in the district. She will also oversee the office of the general counsel, the administrative office and the office of communications and community outreach. Donaldson was the executive director of the Transitional Housing Corporation and the president of the Coalition for Nonprofit Housing and Economic Development’s board of directors.

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Benson F. “Buzz” Roberts began his new role Feb. 9 as president and chief executive officer of the National Association of Affordable Housing Lenders (NAAHL). Roberts joins NAAHL from the U.S. Department of the Treasury, where he was the director of the office for small business, community development and affordable housing policy. Before that, he was senior vice president for policy program and development at the Local Initiatives Support Corporation (LISC).

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Nixon Peabody announced three new associates Feb. 5. Nathan Bernard, Christopher Perkowski and Katie Tenny elected to partnership for tax credit finance and syndication practice. Bernard advises clients in low-income housing tax credits (LIHTCs) and new markets tax credits (NMTCs) transactions. He also oversees Nixon Peabody’s Northeastern Law School co-op program. Perkowski is co-leader of the NMTC team, managing transactions for firm clients and community development financing. Tenny works with LIHTC transactions, representing investors active in the LIHTC market.

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Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced Jan. 27 the addition of Gregory S. Solomos as senior vice president. He will be based in the company’s Louisville, Ky., office. He will be responsible for the Kentucky origination team. Previously, Solomos was senior vice president at Grandbridge Real Estate Capital, and before that, he was a senior member of Capstone Realty Advisors.

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The Affordable Housing Tax Credit Coalition (AHTCC) announced its new board of directors Feb. 2. Todd Crow of PNC Real Estate was elected president, Tony Alfieri of RBC Capital Markets was elected first vice president, Marianne Votta of Bank of America Merrill Lynch was elected secretary and Bryan Keller of RubinBrown LLP was elected treasurer. Members were elected at the annual meeting, Jan. 28.

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On Dec. 30, 2014, Hunt Mortgage Group, a commercial real estate lender, announced that Cary Brownley joined the firm as director to help expand its FHA lending platform. She will be based in the firm’s Tysons Corner, Va., office and her responsibilities will include leading FHA multifamily and health care loan closings. Brownley previously worked at Wells Fargo, where she was responsible for FHA loan closing related to the issuance of Ginnie Mae MBS. She also worked with Deutsche Bank Berkshire Mortgage and at PMC Financial Services.