Sign Up For Novogradac Industry Alert Emails

Low-Income Housing Tax Credits News Briefs - May 2011

AFFORDABLE HOUSING INDUSTRY

Tax credit syndicators are now the largest owners of apartments in the United States, according to the National Multi Housing Council's (NMHC's) 2011 NMHC 50, an annual ranking of the 50 largest apartment owners and 50 largest managers. The five largest apartment owners are, in descending order of units, Boston Capital, Centerline Capital Group, Boston Financial Investment Management LP, SunAmerica Affordable Housing Partners LP and Equity Residential. Of the top 50 firms, 33 own tax credit or affordable apartments and 18 own senior developments. New firms added to this year's owners list include Centerline Capital Group, Boston Financial Investment Management, Hunt Companies Inc., J.P. Morgan Asset Management, CB Richard Ellis Investors LLC, MCA Housing Partners LLC and GID Investment Advisers LLC. See the complete rankings and an analysis of the results at NMHC.

***

Several major housing groups and banking trade associations distributed a joint statement on housing finance reform to key congressional and Administration offices. "Principles for Restoring Stability to the Nation's Housing Finance System," which was developed and signed by the National Council of State Housing Agencies (NCSHA), the National Association of Home Builders and the Mortgage Bankers Association, among others, states that a stable housing sector is necessary for economic recovery; that private capital should be the dominant source of mortgage credit and bear the primary risk in any housing reform; and that changes to the mortgage finance system must be done carefully and over a reasonable transition period. NCSHA said the statement reflects an industry consensus on the importance of a strong government role in affordable financing for housing. The groups plan to continue discussing housing reform to see if they can agree on more detailed legislative proposals or initiatives, according to NCSHA.

***

Two quarterly indices from the National Association of Home Builders (NAHB) indicate a return to healthy market conditions for new and existing multifamily buildings. NAHB reports that the Multifamily Production Index, which tracks developer sentiment about new construction on a scale of one to 100, has increased by more than five points since the previous quarter and at 40.8 is the highest since the fourth quarter of 2006. The Multifamily Vacancy Index (MVI) decreased to 33.3, indicating the lowest number of vacancies in the market since the third quarter of 2006. NAHB says that the MPI and MVI have historically performed as leading indicators of census figures for multifamily starts and vacancy rates, providing information on likely changes in the census figures as many as three quarters in advance.

DEALMAKERS

Boston Capital invested in the development of Bowers Brook Housing for Seniors, a planned 42-unit senior development in Harvard, Mass. The community will feature 26 one-bedroom and 16 two-bedroom units located in a three-story building. Units will be available to seniors earning 60 percent or less of the area median income. Amenities will include a clubhouse, central laundry; and dishwashers and central air conditioning in the units. Regional senior services agencies will provide supportive services.

***

WNC & Associates closed a $93 million multi-investor low-income housing tax credit (LIHTC) fund, WNC Institutional Tax Credit Fund X California Series 9 LP. The fund closed with nine institutional investors, including seven California banks, one national bank and a national insurance company. The ratio of repeat investors was around 80 percent, which WNC reports has been the historical average for its institutional funds. The equity raised will help fund approximately 10 California properties consisting of more than 700 affordable housing units.

***

CCNO Development says that construction has begun on a 51-unit senior community in New Orleans, La. CCNO will build Tudor Square Home for the Aged, according to Enterprise's Green Communities criteria to ensure high energy efficiency. Tudor Square's development is being funded by the Louisiana Housing Finance Agency and the state's Office of Community Development. Amenities of the four-story structure's 15 efficiency and 36 one-bedroom units will include granite countertops, wood cabinets, Energy Star appliances and in-unit laundry machines. Eight of the units will be accessible and eight additional units will accommodate persons with special needs. Tudor Square is adjacent to the historic Tharp-Sontheimer Building, which CCNO is converting into a mixed-use commercial building.

***

Phoenix, Ariz. celebrated the grand opening of the Canyon Corridor neighborhood's first multifamily housing development in 25 years. Rehoboth Place, developed by Englewood Development Company in partnership with Rehoboth Community Development Corporation, offers 47 one-, two- and three-bedroom affordable units. The community also provides assistance for low- and moderate income households and persons transitioning out of homelessness. Amenities include a community room for programming, a community garden, a walking trail, a playground and a sports court. Residents will have the opportunity to attend financial literacy and homebuyer education courses, as well as on-site support groups. Rehoboth Place's development was financed with a Section 1602 low-income housing tax credit (LIHTC) exchange program grant and construction and permanent financing from the city of Phoenix.

***

STATE BRIEFS

The Ohio Housing Finance Agency (OHFA) awarded a total of $23.8 million in 2011 low-income housing tax credit (LIHTC) allocations to 33 developments in 22 counties. More than 109 applicants requested $86.6 million in total credits for the round. A list of recipients that received a 2011 reservation from OHFA is available at the Ohio Housing Finance Agency.

***

The Georgia Department of Community Affairs (DCA) is accepting general and project-specific questions regarding its 2011 qualified allocation plan. The agency said it will e-mail answers to project-specific questions to the person who submitted the question and plans to post answers to general questions on its web site. Questions should be e-mailed by June 3 to [email protected].

***

Mathew M. Wambua was named commissioner of New York City's Department of Housing Preservation and Development (HPD). He succeeds Rafael E. Cestero, who left public service in March. Wambua most recently served as executive vice president for the New York City Housing Development Corporation (HDC), where he managed several departments and oversaw the financing of more than 36,000 affordable housing units. Prior to joining HDC, Wambua served as senior policy advisor in the mayor's office. He holds a bachelor's degree from the University of California Berkeley and a master's degree from the Harvard Kennedy School.

***

The Colorado Housing and Finance Authority (CHFA) will host the 2011 Housing Credit Summit, an opportunity for LIHTC developers and other affordable housing stakeholders to share ideas and network with investors. Speakers will include LIHTC policy experts, investors and CHFA's allocation team. Michael J. Novogradac, CPA, managing partner of Novogradac & Company, will be the luncheon keynote speaker. Registration is required for the May 24 event that will be held at the Denver Marriott City Center. Find more information on CHFA's web site at the Colorado Housing and Finance Authority.

***

Louisiana Gov. Bobby Jindal announced his support of a legislative effort to consolidate the state's housing agencies, including the Louisiana Housing Finance Agency (LHFA), into a single agency. The proposed Louisiana Housing Corporation would oversee the state's housing funds and unite nearly 30 separate housing-related programs currently managed by five organizations. The corporation would be comprised of LHFA, Louisiana Land and Trust, and several housing programs administered by the Office of Community Development. Additional programs under the Department of Health and Human Services and the Department of Children and Family Services would also be assessed for inclusion. The governor's office says the staff employed by these five agencies serve overlapping functions and that the creation of a unified organization would include staff reductions and the elimination of multiple boards. A single agency would also increase accountability and allow the state to better attract and leverage capital in the credit markets, Jindal's office said.

PEOPLE IN THE INDUSTRY

President Barack Obama selected Bob Ryan, chief risk officer of the Federal Housing Administration (FHA), to be the agency's acting commissioner. Ryan replaced David Stevens, who left public service to join the Mortgage Bankers Association. Ryan spent 26 years at Freddie Mac before joining the FHA in 2009. The Obama Administration is still seeking a permanent replacement, an appointment that will have to be nominated by the president and confirmed by the Senate.

***

California Gov. Jerry Brown appointed Claudia Cappio the executive director of the California Housing Finance Agency (CalHFA). Cappio has experience in land use planning and project development and administration, including affordable housing. She held leadership positions with several San Francisco Bay Area governments for 30 years. Her background includes a number of major projects such as the Chiron Biotechnology Center Campus and the Pixar Animation Studios Campus, both in Emeryville, Calif. Steven Spears will stay on as the agency's chief deputy director.

***

International law firm Nixon Peabody LLP announced the arrivals of a new partner and a new associate. Tuan Pham joined the firm's San Francisco, Calif. office as a partner in the affordable housing practice. He specializes in financing real estate, energy, and public infrastructure developments using tax-exempt bonds and tax credits. Pham holds a bachelor's degree from the University of California, Los Angeles and his juris doctor from the University of California Berkeley. Robin Mahapatra joined the firm's tax credit finance and syndication practice in its Los Angeles, Calif. office. He focuses his practice on providing tax-related advice and has advised clients on tax rules governing tax-exempt organizations. Mahapatra has earned degrees from Claremont McKenna College, the New York University School of Law and the University of Southern California.

***

Gov. Steve Beshear appointed Charles Beach III to Kentucky Housing Corporation's (KHC's) board of directors. Beach is the chairman of Peoples Exchange Bank and served as mayor of the city of Beattyville, Ky. for more than 30 years. In his new role, he represents consumer interests and replaces Keith L. Free, whose term expired. Gov. Beshear also reappointed Samuel Earl Lee to the board, extending Lee's term until October 30, 2014. He represents manufactured housing industry interests. A complete list of board members is available on KHC's web site at the Kentucky Housing Corporation.

BONDS

In light of Gov. Jerry Brown's proposal to abolish redevelopment agencies, the California Debt Allocation Committee (CDLAC) cautioned redevelopment agencies (RDAs) and other tax-exempt bond allocation applicants that use redevelopment agency funds to consider the risk of accepting future bond allocation awards at this time. CDLAC said in a March memo that if RDAs lose their authority to issue bonds and/or enter into funding contracts, staff would recommend that non-issuance penalties be waived for those with an existing allocation award; however, the same consideration would not extend to applicants that received an award after March 16. Penalties for failing to issue bonds may include a forfeiture of the performance deposit and the assessment of negative points for two calendar years. CDLAC said it may permit applicants that listed an RDA as issuer and received an allocation award prior to March 17 to exchange the existing allocation for a new award to a new qualified CDLAC applicant, as long as no substantive proposed project changes occurred. Allocation exchange requests should be submitted by May 18, CDLAC's allocation meeting deadline.

***

The Vermont Housing Finance Agency (VHFA) announced that during the agency's 37-year history it has issued more than $3 billion in bonds to finance affordable housing opportunities for low- and moderate-income residents. VHFA said it used a portion of the bonds to finance the development of approximately 8,400 affordable rental units. The agency also reported that in 2010, 81 percent of Vermont renters living in VHFA-allocated low-income housing tax credit (LIHTC) units earned less than half of the area median income. VHFA builds capital by selling tax-exempt bonds and loaning the proceeds at slightly higher interest rates to homebuyers and affordable housing developers, a self-sustaining model that does not rely on state funding.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

Learn more about Novogradac's expertise and many services