Low-Income Housing Tax Credits News Briefs - May 2017

Tuesday, May 2, 2017

LIHTC Industry

On March 14, the Haas Institute released the study, “Opportunity, Race, and Low-Income Housing Tax Credit Projects: An Analysis of LIHTC Developments in the San Francisco Bay Area,” which comprehensively analyzes the administration of the Low-Income Housing Tax Credit (LIHTC) program. The Haas Institute examined LIHTC properties in the San Francisco Bay Area, and results showed that developments financed by the LIHTC in the Bay Area were relatively well distributed across boundaries of opportunity. According to the report, nearly two-thirds of LIHTC developments (64.9 percent) in the nine-county area were sited in moderate, low-, and very-low-opportunity neighborhoods during the years for which data was available (1987-2014). In addition, the Haas Institute stated that 9 percent credits were more frequently used to create housing in high-opportunity neighborhoods than 4 percent credits. However, more than 45 percent of large family developments were sited in low- and very-low-opportunity areas, with these types of properties disproportionately placed in low-opportunity areas where resources for families with children are inadequate to support healthy development and upward mobility. In addition, results indicate that 9 percent LIHTC developments are sited in neighborhoods that are not racially integrated; on a ratio of 3.78-to-1 basis, and 9 percent developments were sited in neighborhoods where 50 percent or more of the population were people of color. The report is available at www.taxcredithousing.com.

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The Office of the Comptroller of the Currency (OCC) released March 30 its latest Community Development Investments newsletter, “Preserving Affordable Housing: Innovative Partnerships.” The newsletter describes the role of national banks and federal savings associations in preserving America’s affordable rental housing, as well as presenting examples of how financial institutions and nonprofit organizations have used federal and state programs, tax incentives, loan funds and the secondary market to create innovative partnerships in urban and rural areas. Also included in the newsletter is how these activities may be eligible for Community Reinvestment Act consideration. The newsletter can be accessed at www.occ.gov.

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Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc. (Enterprise), announced March 28 the expansion of its west coast platform. The company hired 22 servicing staff, support staff and producers for its new newly formed Los Angeles and San Diego offices, as well as its existing Irvine office. In addition, Shelley Magoffin will head up the Los Angeles office as the executive vice president. Bellwether Enterprise expects the expansion to add more than $1 billion in annual loan volume, bringing the anticipated loan volume to $6 billion in 2017. This is after a record year in 2016. The company has an annual servicing portfolio of more than $14 billion.

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The Office of the Comptroller of the Currency (OCC) released 31 Community Reinvestment Act (CRA) performance evaluations for March. The evaluations were for national banks, federal savings association and insured federal branches of foreign banks that have received ratings. Of the 31 evaluations, three rated as outstanding and 28 rated as satisfactory. A list of the evaluations is available at www.occ.gov. 

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On March 24, the Corporation for Supportive Housing (CSH) released the report, “2016 LIHTC Policies Promoting Supportive Housing & Recommendations for 2017-2018.” The report builds on CSH’s 2015 report and examines the strategies and policies housing agencies adopted to encourage supportive housing development within qualified allocation plans (QAPs) for the LIHTC, highlighting significant changes made within the documents. CSH examined 56 QAPs, finding that housing agencies implemented new or significantly changed their policies in 2016, specifically as they relate to supportive housing developments. CSH found that Indiana included a mandate that all developments include 10 percent of their units for special needs. Idaho also established a 15 percent set-aside of its LIHTCs for supportive housing and Iowa has a 10 percent set-aside of its LIHTCs for a homeless housing demonstration program. CSH closes by stating that housing agencies would benefit from incorporating additional policies in their QAPs that improve the quality of supportive housing created, as well as leveraging resources to fund service costs in order to strengthen financial feasibility of supportive housing developments for high need residents. The report is available at www.csh.org. 

LIHTC State

The Maryland Department of Housing and Community Development announced March 21 the award of nearly $28 million in federal low-income housing tax credits (LIHTCs) and nearly $20 million in rental housing funds to 20 developments throughout the state. The funding will go to the new construction or preservation of approximately 1,500 apartments, including 224 apartments set aside for individuals with disabilities. The department received 41 applications for properties in 15 counties and Baltimore. The full list of allocatees is available at www.taxcredithousing.com.

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On March 31, the Georgia General Assembly passed H.B. 196, which provides guidance to tax assessors determining the fair market value of LIHTC properties in the state. The bill states that any income tax credits attributable to a property may be considered in determining the fair market value of the property if the tax assessor uses comparable sales of property and the income tax credits generate actual income to the record holder of title to the property. All laws and parts of laws that conflict with the bill would be repealed. At press time, the bill was awaiting governor approval. 

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The Iowa Finance Authority (IFA) board awarded more than $73 million in federal LIHTCs March 30 to 11 properties. The allocation will go to the new construction and preservation of 513 affordable apartments in Boone, Bremer, Clay, Dubuque, Linn, Polk, Wapello and Woodbury counties. Awards ranged from $3.8 million to $8.2 million. IFA received 25 applications requesting more than $170 million in LIHTCs. 

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The Alabama Housing Finance Authority (AHFA) announced March 21 updates to the multifamily section of its website, www.ahfa.com. Updates include the addition of a new page for multifamily programs where LIHTCs, HOME, Housing Trust Fund, bonds and multifamily fees are now submenus. AHFA also changed the four links under the multifamily main menu on the home page. The new links are multifamily notices, allocation and application information, multifamily programs, and compliance. 

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The Massachusetts Department of Housing and Community Development (DHCD) and the Massachusetts Housing Finance Agency (MassHousing) announced in February a partnership to administer the Community Scale Housing Initiative (CSHI). The program provides funding for small-scale developments, in municipalities with a population of no more than 200,000. Both nonprofit and for-profit developers are eligible to apply for CSHI funds. Sources of funding available are $5 million from DHCD’s Housing Stabilization Fund and $5 million from MassHousing’s Opportunity Fund. The program mandates that developments must be financially feasible without federal 9 percent, federal 4 percent or state LIHTCs, or any other state housing resources that have not been previously committed and are not available in this notice of funding availability. There is a $1 million maximum for the CSHI per development. Applications are due to DHCD close of business May 24.

LIHTC Dealmaker

The grand opening of Heritage Square Senior Apartments in Pasadena, Calif., was March 16. The property will provide 70 new apartments for low-income seniors 55 years and older. Amenities include a community room with a full kitchen, a library and reading room, and an outdoor courtyard. Financing partners for the $22.8 million property included the city of Pasadena, Wells Fargo, California Community Reinvestment Corporation and the California Tax Credit Allocation Committee (CTCAC). The developer was BRIDGE Housing and the architect was KTGY Group Inc.

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The National Affordable Housing Trust (NAHT) and National Church Residences announced the closing March 14 of $7.9 million in LIHTC equity financing for the rehabilitation of Stygler Village in Gahanna, Ohio. Stygler Village is an affordable housing community for seniors 62 and older and provides 150 affordable rental apartments. NAHT secured the LIHTC investment under the NHT 30 Tax Credit Fund, Limited Partnership with Fifth Third Community Development Corporation as the investor. The deal officially closed Feb. 14. 

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The Woda Group Inc. announced March 14 that Willoughbeach Terrace in Willowick, Ohio, has earned Leadership in Energy and Environmental Design (LEED) Gold Certification from the U.S. Green Building Council (USGBC). Willoughbeach Terrace is a new affordable senior community that offers 50 one- and two-bedroom apartments in a three-story building. Amenities include a fitness center, recreation room, library and access to public transportation. Catholic Charities Housing Corporation assisted Woda in developing a plan for on-site services for seniors, including transportation, meal delivery, planned social activities and connections with area agencies serving seniors. The Ohio Housing Finance Agency (OHFA) provided LIHTCs for construction and Key Community Development provided the LIHTC equity. In addition, OHFA’s housing development loan program supplied a $3 million bridge loan.

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LIFT Orlando, in partnership with developer Columbia Residential announced March 15 the closing of more than $30 million in financing for the development of Pendana at West Lakes in Orlando, Fla. Financing for the development includes a $22.8 million equity investment from SunTrust Community Capital (STCC), a $7.4 million permanent loan from Valley National Bank and a $2 million construction loan from the Florida Sail Fund. Additional funding was provided by the Orange County Housing Finance Agency, the city of Orlando and the development partners. Pendana at West Lakes will be a mixed-income property with 200 apartments, 140 of which are set aside for affordable housing. Amenities include a pool, playgrounds, a fitness center, a business center and community rooms. At press time, construction had already begun, with a finish date of late spring 2018.  

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EAH held the groundbreaking April 18 for Morgan Hill Family, an affordable housing development in Morgan Hill, Calif. The 40 apartment homes will be located on three distinct in-fill sites, Site A-Tobiano, Site B-Tovero and Site C-Palomino. Morgan Hill Family is the result of a public-private partnership between EAH Housing, the city of Morgan Hill, Santa Clara County, Wells Fargo Bank, the Affordable Housing Community Development Corporation, the CTCAC and the Housing Authority of the County of Santa Clara. Morgan Hill Family was awarded LIHTCs from CTCAC in 2016. 

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The Massachusetts Housing Finance Agency (MassHousing) announced the closing March 8 of $102.7 million in financing for four affordable housing properties for seniors in Massachusetts. The properties in Boston, Framingham, Newton and New Bedford, with 711 apartments, will undergo a combined $55.2 million in renovations. Smith House in Boston provides 132 apartments and a new community center for two of the developments, and will also  undergo a $19 million renovation. MassHousing provided a $13.4 million construction and permanent loan, and a $16 million bridge loan. Other financing included LIHTCs. Tribune Apartments in Framingham provide 53 apartments to low-income elderly and disabled people. The property will undergo a $4.5 million rehabilitation and four accessible apartments will be created. MassHousing provided a $4.3 million construction and permanent loan, as well as a $4.7 million bridge loan. Other financing sources were LIHTCs. Melville Towers in New Bedford provides 327 apartments to low-income elderly residents and will undergo a $102.7 million renovation. MassHousing provided a $26.5 million loan. Golda Meir House in Newton provides 197 apartments for the elderly and will undergo a $30 million, renovation. MassHousing provided a $37.8 million construction and permanent loan, and another $19.8 million in financing was provided through the allocation of LIHTCs.

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Boston Capital announced March 21 its investment in the construction of SloHi Flats, a multifamily development for families in Denver. SloHi Flats will be built with LIHTC equity and the general partner is SloHi Partners LLC. SloHi Flats will provide 45 apartments, featuring 39 one- and six two-bedroom apartments a four-story building. Amenities will include a bicycle storage room, a 2,500-square-foot outdoor courtyard with a fire pit and gas grill, as well as a 700-square-foot rooftop deck. The apartments will be available to families earning 60 percent or less of the AMI.

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Fetters Apartments in Sonoma, Calif., is open and housing 60 families. The affordable apartment complex opened earlier this year, with more than 850 families having applied for housing. There are 19 one-, 22 two- and 19 three-bedroom apartments located in a 57,589-square-foot building on 3 acres. Construction of the $17.7 million development, this according to Riley Weissenborn, senior associate project manager quoted in an article  in the Sonoma Index-Tribune, was financed with $18.8 million in 2014 LIHTC awards from the CTCAC. Sonoma County housing funds provided approximately $2.6 million as well. Apartments are available to families earning between 30 and 60 percent of the AMI. Amenities include a computer lab, free Wi-Fi, a community room with kitchen, a laundry room and an after-school program that will be available later this year. Services include academically based summer and afterschool programs, financial literacy courses, vocational development, health and wellness programs and connection to community resources. Fetters Apartments is the first phase of a planned neighborhood revitalization which will include two affordable housing communities, shopping and other commercial space, community gardens, bicycle and pedestrian trails and neighborhood improvements.

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The grand opening of the William Byrd Senior Apartments was March 21. The affordable property in Richmond, Va., received a $5 million makeover, giving low-income seniors, 55 and older, newly renovated kitchens with new cabinets, countertops, LED lighting and Energy Star appliances as well as new windows throughout and heating and cooling systems. The William Byrd Senior Apartments is located in a historic, 11-story building that opened as a hotel in 1925 and was converted into apartments in the mid-1990s. The building remained on the National Register of Historic Places, with historic features including marble floors in the lobby, marble trim work, a grand staircase and metal mailbox with a chute on each floor. The apartment building houses the William Byrd Hotel Barber Shop and the William Byrd Styling. Financing included a grant from the city of Richmond’s affordable housing trust, a bridge loan from Virginia Community Capital, $3.4 million in 4 percent LIHTCs and historic tax credits (HTCs). 

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The Brooklyn Public Library announced the approval of a $25 million redevelopment plan March 17 for the Sunset Park branch. The New York City Council voted unanimously earlier that week on the plan, which includes meeting the need for a larger library and providing affordable housing in the area. Brooklyn’s Sunset Park library branch site will be expanded, and 49 affordable apartments will be added. The proposed design includes 20,755 square feet, with 18,200 square feet expected to be accessible to the public. Apartments in the eight-story building will be available to tenants earning between 30 and 80 percent of the AMI. Of those 49 apartments, half will be leased to residents of Community Board 7 Manhattan, which has an advisory role in land use and zoning matters, the city budget, municipal service delivery and community concerns of the upper west side. An additional 10 percent of the apartments will be reserved for city employees and another 10 percent reserved for disabled tenants. There will also be nine apartments reserved for survivors of domestic abuse. The Fifth Avenue Committee (FAC), a nonprofit, will partner with the library to fund and manage the redevelopment. The FAC has received an allocation of $11.4 million in LIHTCs, and the New York City Department of Housing Preservation and Development (NYC HPD) also provided funding. FAC expects to break ground in October or November of this year, with a tentative completion date in 2018. 

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On March 22, MassHousing announced the closing of $42 million for the rehabilitation of Quincy Tower in Boston. An affiliate of Beacon Communities LLC will use $12 million–including LIHTC equity–to refinance an upgrade of the affordable housing property. The developer received $15.3 million in equity for state and federal LIHTCs after syndication from the Massachusetts Housing Investment Corporation (MHIC). The financing also included a $21 million construction and permanent loan and a $21.6 million bridge loan from MassHousing. Quincy Tower is a 16-story elderly affordable housing community for seniors 62 and older. There are 161 affordable apartments that will undergo improvement. Rehabilitation plans include $71 million capital improvements to the building exterior, upgrading common areas, improvements to the property’s mechanical and hot-water systems, replacing cabinetry and finishes and upgrading the building’s accessibility. Beacon Communities is expected to begin construction in December and wrap up by February 2018.

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The Tennessee Housing Development Agency (THDA) announced April 7 that the public-private partnership between Columbia Housing and Redevelopment Corporation (CHRC) and LHP Capital LLC is the recipient of THDA’s first allocation of Innovation credits. CHRC requested and was awarded $5.5 million in credits. The Innovation credits will be used to acquire and substantially rehabilitate the 50-apartment Oakwood Community. Under the U.S. Department of Housing and Urban Development’s (HUD’s) Rental Assistance Demonstration (RAD) program, CHRC is converting its public housing portfolio to a Section 8 project-based rental assistance program. THDA’s board of directors set aside up to $1.1 million in 9 percent LIHTCs for an innovative affordable housing development that would otherwise not have been funded in the annual competitive cycle. 

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On April 6, Sterling National Bank, the principal subsidiary of Sterling Bancorp, announced the investment of a combined total of $25.2 million in federal and state historic tax credits (HTCs) and LIHTCs to Newburgh CORe Neighborhood Revitalization in Newburgh, N.Y. The investment for the affordable housing initiative included an $11.2 million construction loan and a direct equity acquisition of LIHTCs, federal HTCs and state HTCs for $14 million. Newburgh CORe Neighborhood Revitalization is historic rehabilitation and renovation of 45 mixed-income affordable rental apartments in 15 buildings. The development will provide permanent affordable housing for homeless individuals, middle-income families, artists, veterans and seniors. Of the 45 apartments, 12 will have preference for households involved in artistic and literary endeavors. In addition to housing, the initiative includes plans for the redevelopment of an abandoned dress factory building, which will be rehabilitated to serve as a multi-use community center with after school youth programs, studio/gallery space for artists and computer training lab. The deal closed Feb. 28.

LIHTC People

The Kentucky Housing Corporation (KHC) announced March 31 personnel changes. Rob Ellis, deputy executive director for housing production and programs announced his retirement later this year, after nearly 24 years of service. Lisa Beran will be promoted to deputy executive director, housing production and programs. She is serving as general counsel and deputy executive director of legal services and has been with KHC nearly 10 years. Jeremy Ratliff will be promoted to general counsel and deputy executive director, legal services. He is serving as managing director, multifamily programs and asset management. Tracy Thurston will be promoted to managing director, multifamily programs and asset management. She is serving as managing director, corporate planning and accountability. Jon Davidson will be promoted to managing director, corporate planning and accountability. He is serving as managing director, business logistics and has been with KHC for 11 years. All promotions will be effective July 1. 

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BRIDGE Housing announced April 4 Monica Edwards as the new president of BRIDGE Impact Capital, the nonprofit developer’s community development financial institution affiliate. Edwards is responsible for raising capital for real estate developments that improve affordable housing, educational, health and economic opportunities for low-income communities. Before joining BRIDGE, Edwards was president of The Monarch Group, a consultant agency providing structured finance and portfolio management with an emphasis in new markets tax credits (NMTCs). She has also served as chief investment officer for ICA Fund Good Jobs, and before that, she was vice president at Citibank Community Development Investments. Edwards is based in San Francisco. Her appointment was effective April 3.

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The National Association of Housing and Redevelopment Officials (NAHRO) board of governors announced April 10 the appointment of Adrianne Todman as the incoming CEO. Todman was the executive director of the District of Columbia Housing Authority (DCHA), where she created a national model to house and assist homeless veterans. Before that, Todman held several key positions in both the legislative and executive branches of the federal government, where she served as a legislative director in the House of Representatives. She was also with the U.S. Department of Housing and Urban Development (HUD) as the first manager of the national HOPE VI competition, then as a policy assistant at both the Office of Public and Indian Housing and the Office of the Secretary. Todman received the D.C. Building Industry Association’s Public Official of the Year, and NAHRO’s 2016 M. Justin Herman Memorial award. Todman will assume this position June 1.

LIHTC Bond

The California Debt Limit Allocation Committee (CDLAC) granted authority April 3 to its executive director to waive until Aug. 15 the forfeiture of performance deposits associated with extension requests prompted by the disruption in the equity and debt market for low-income housing tax credit (LIHTC) investments. The executive director also has the authority to waive until July 1 performance deposit forfeitures and negative points associated with a full reversion of a bond allocation, if the reversion was prompted by the market disruptions. The notice was released to qualified residential rental program applicants and is available at www.treasurer.ca.gov.