Sign Up For Novogradac Industry Alert Emails

Low-Income Housing Tax Credits News Briefs - November 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Congressional Budget Office (CBO) released the report, “Federal Housing Assistance for Low-Income Households.” The report, released Sept. 11, examines the ways in which the federal government provides housing assistance to low-income households and how that assistance has changed since 2000. CBO also provides information about the households that receive assistance, as well as assesses policy options for modifying that assistance. The report examines three spending programs: the Housing Choice Voucher (HCV) program, project-based rental assistance and public housing. The low-income housing tax credit (LIHTC) was also noted as a key component in the creation and preservation of affordable rental housing and the CBO notes the LIHTC accounts for most of the assistance provided indirectly to low-income households. This report considers four sets of such options on how policymakers could change federal low-income housing assistance, such as changing the size or composition of the assisted population, modifying tenants’ contributions to rent, changing the resources available to the local public housing agencies (PHAs) that administer the programs and changing the ways in which housing assistance is provided. The report is available at www.taxcredithousing.com.

***

On Oct. 2, HUD announced the mortgage insurance premiums (MIPs) for Federal Housing Administration (FHA) multifamily, health care facilities and hospital mortgage insurance programs that have commitments to be issued or reissued in fiscal year (FY) 2016. The FY 2016 MIPs are the same as FY 2015 MIPs, which were published in the Federal Register March 31, 2014. The first-year upfront MIP fee for multifamily, health care facilities and hospital programs is 50 basis points. The FY 2016 MIPs became effective Oct. 8. The complete notice is available at www.hudresourcecenter.com.

***

On Sept. 21, Enterprise Community Partners and the Harvard Joint Center for Housing Studies (JCHS) released the report, “Projecting Trends in Severely Cost-Burdened Renters: 2015-2025.” The report projects the number of households spending 50 percent or more of their income on rent is expected to increase at least 11 percent by 2025, from 11.8 million to 13.1 million. The largest increases are expected among older adults, Hispanics and single-person households. The report reveals the need for affordable housing is already overwhelming the capacity of federal, state and local governments to supply assistance, with 11.2 million extremely low-income households competing for 7.3 million homes affordable to them. This is a 3.9-million-home shortfall. Enterprise and JCHS advocated for policymakers to consider enhanced levels of support for rental housing particularly for lowest-income households but also across a range of income levels. The report is available at www.taxcredithousing.com.

***

On Sept. 29, the Center for Housing Policy at the National Housing Conference (NHC) released the report, “Paycheck to Paycheck: A Snapshot of Housing Affordability for Millennial Workers.” The report lists five occupations held by millennials, as well as providing policy solutions. Solutions include updating measures that were put in place after the 2008 financial crisis. Solutions also include strengthening and expanding programs that create and preserve affordable rental housing so that the government can increase access to housing to reduce cost burden. The report states there are 53 million millennial workers in the United States labor force. However, the earnings of millennial workers are insufficient to afford housing. The report is available at www.nhc.org.

***

The Michael’s Organization announced Sept. 10 the 25th anniversary for The Michael’s Organization Educational Foundation scholarship. The company is celebrating the milestone with the “I Am A Michael’s Scholar” campaign. The campaign tells the stories of scholarship winners. Created by chief executive officer Michael J. Levitt, the scholarship is available to residents of the affordable housing communities that the Levitt’s companies own and manage. The videos premiered Sept. 9 at The Michaels Organization Educational Foundation Golf Tournament, in Marlton, N.J. More than 2,000 aspiring students received $4.6 million in college scholarships. The scholarship funds can be used toward higher education at any accredited college, university or vocational training program in the United States.

***

The Community Development Financial Institutions (CDFI) Fund held the, “Community Development Marketplace Webinar,” Sept. 18. Participants included certified community development financial institutions (CDFIs). They were invited by the Promise Zone team to learn about and provide comment on new tools for gathering information on planned community development projects. The Promise Zone team specifically wanted feedback on how the Community Development Marketplace database could be most useful to CDFIs seeking investment opportunities, developing products and services and understanding the local partnerships and context in which the investments might take place. The Community Development Marketplace database includes projects and activities underway in urban, rural and tribal communities applying to become Promise Zones.

***

On Oct. 1, the Office of the Comptroller of the Currency (OCC) released Community Reinvestment Act (CRA) performance evaluations for 22 national banks, federal savings associations and insured federal branches of foreign banks. Of the 22 evaluations made public this month, five are rated outstanding, 17 rated satisfactory, none rated as needs to improve and one rated as substantial noncompliance. The evaluation period was Sept. 1 to Sept. 30.

 

STATE BRIEFS

On Sept. 30, MassHousing and the Massachusetts Department of Housing and Community Development announced loan closings for $14.7 million in Affordable Housing Trust Fund (AHTF) financing. Financing related to these closings will support the construction or rehabilitation of 673 units of affordable rental housing in 15 communities. The AHTF loan closings include $1 million for the 20-unit Port Landing in Cambridge. A total of $1 million will go to the 56-unit Cranberry Manor and Carpenter’s Glen in Wareham and Taunton, respectively. Residences at Stony Brook Phase 2 in Westford will receive $1 million for the 36-unit development. A total of $750,000 will go to the 32-unit Tritown Landing Phase 3 in Lunenburg. The New England Center for Homeless Veterans in Boston will receive $2.2 million for the renovation of 59 single room occupancy (SRO) units and adding a new SRO unit along with 37 new efficiency apartments. A full list of loan recipients is available at www.masshousing.com.

***

The Tennessee Housing Development Authority (THDA) approved green energy requirements for new multifamily rental property developers seeking to qualify for federal LIHTCs. Under the new guidelines to be incorporated later this year, affordable housing developers seeking LIHTCs will have to qualify for full certification from Enterprise Green Communities. To earn points for full certification under the Enterprise Green Communities program, the developer must include water-conserving fixtures in apartments, high-efficiency lighting controls in common spaces and an overall minimum energy performance score for the entire building. Changes that were also approved include other energy-saving measures that once qualified for points, such as programmable thermostats and energy star certified clothes dryers, will now be mandatory to be eligible for the LIHTC program. More information is available at www.thda.org.

***

Massachusetts Gov. Charlie Baker, and Chrystal Kornegay, undersecretary of the Department of Housing and Community Development, announced $29.2 million in 2015 federal and state LIHTC allocations Sept. 15. The LIHTCs will contribute to the preservation or new construction of 1,484 rental housing units, 1,119 of which will be affordable. In addition, the administration directed $45.8 million in additional funds to support these properties. The Department of Housing and Community Development will fund the developments with a combination of LIHTCs, federal HOME funds and financing from six state bond accounts. The tax credits are expected to produce approximately $182 million in equity. The funded properties will serve individuals and families transitioning out of homelessness, persons with disabilities, the elderly and veterans. The complete list of funding recipients is available at www.taxcredithousing.com.

***

The South Carolina State Housing Finance and Development Authority announced its 2015 LIHTC allocations Sept. 11. Tax credit allocations ranged from $196,870 to $747,357. The LIHTCs will fund the development or rehabilitation of 932 affordable rental housing units for seniors and families. The complete awards list is available at www.taxcredithousing.com.

***

The Wisconsin Housing and Economic Development Authority (WHEDA) announced LIHTC allocations in Middleton and Milwaukee under its 2015 High Impact Project Reserve (HIPR) program. Meadow Ridge Middleton, a 95-unit multifamily development and the Century City Homeowners Initiative (CCHI) in Milwaukee will each receive a tax credit award of $850,000. Eight HIPR applications were received during this special round seeking nearly $5.5 million in LIHTCs. HIPR allocations are made to developments that have strong economic development or redevelopment attributes, have significant community support and/or have a tangible impact on job creation, job retention or job training.

DEALMAKERS

Boston Capital announced Sept. 15 its investment in the construction of Cielo Carmel Phase I and Cielo Carmel Phase II, in San Diego. Cielo Carmel Phase I will be a 107-unit development and will feature 18 one-bedroom, 53 two-bedroom and 36 three-bedroom units on nearly 6 acres. Cielo Carmel Phase II will be a 90-unit development and will feature 15 one-bedroom, 45 two-bedroom and 30 three-bedroom units on 3.75 acres. The two affordable apartment communities will be available to individuals and families earning 60 percent or less of the area median income (AMI). Both apartment communities will be built with low-income housing tax credit (LIHTC) equity and are part of the 2,652-acre master planned Pacific Highlands Ranch Community development. Cielo Carmel Phases I and II will share an amenity package consisting of a 2,355-square-foot community building with kitchen, three tot-lots, a dog park, community garden and three common laundry facilities. Development of the two properties is expected to produce more than $21 million in local salaries and create nearly 225 new jobs.

***

Bellwether Enterprise Real Estate capital LLC announced Sept. 18 $5.8 million in permanent debt financing to complete the construction of the John and Jill Ker Conway Residence in Washington, D.C. A celebration to indicate the final piece of steel is being put into place for a building was held for the property Sept. 18. The John and Jill Ker Conway Residences will provide affordable and permanent supportive housing for homeless veterans and low-income individuals. The 14-story mixed-use building will have 12 floors providing 124 micro studio apartments that will be located above office, retail and community spaces on the ground level and second floors. Of the 124 units, 60 units will be set aside for veterans exiting homelessness; 17 units will be available to low-income residents with referrals from the city’s Department of Behavioral Health; and 47 units will be reserved for lower-wage working individuals making no more than 60 percent of the AMI. Amenities will include conference space, management offices, a lounge, a fitness center, retail space and social services. Development cost is expected to total $32.7 million, with completion slated for spring 2016.

***

A groundbreaking ceremony was held Sept. 21 for affordable housing communities in Hayward, Calif. Eden Housing is the developer of the two affordable housing communities, South Hayward BART Family & Seniors Communities. The two communities will be located on 1.44 acres, site of the former South Hayward Bay Area Rapid Transit (BART) overflow parking lots, and will be made up of adjacent five-story standalone buildings sharing a common courtyard. A total of 151 affordable apartments will be provided. Of those, 87 affordable rental apartments will be available to families and 64 affordable rental apartments will be for seniors, age 62 or older. Units will be available to residents earning between 30 percent and 50 percent of the AMI. Each community will have a computer center and a community room. The building for seniors will have a fitness and health center. The developments will also share a 10,000-square-foot courtyard with a large playground, community gardens and a barbecue area with picnic table. The South Hayward BART Family & Seniors Communities is financed with state and federal LIHTCs and transit-oriented development (TOD) grants from the California Department of Housing and Community Development. Development costs are expected to total $53.5 million, with construction expected to be completed May 2016.

***

WNC announced Sept. 21 that its subsidiary, Community Preservation Partners LLC, will purchase Plaza Townhomes in Portland, Ore., from Home Forward, a housing assistance organization. Renovations to the community are expected to include enhancements to each unit’s interior, common areas and maintenance areas. WNC’s Community Preservation Partners expects to complete more than $3 million in upgrades to the property. Plaza Townhomes includes 68 two- and three-bedroom units, as well as a community room with computer access, a playground area and a laundry facility. The property is available to families earning no more than 50 percent of the AMI, and those that meet requirements of the Section 8 program.

***

Preservation of Affordable Housing (POAH) announced the closing of refinancing on Central Annex and Union Court in downtown Pittsfield, Mass. The refinancing will aid the restoration of the buildings. Financing includes $4.5 million in LIHTCs, $1.75 million from the Affordable Housing Trust Fund and a $5.4 million construction permanent loan and a $3.5 million bridge loan from MassHousing. Central Annex, built in 1898 as a high school, is a 46,707-square-foot, three-story building. The 62-unit property includes a community room, interior courtyard, common laundry facilities and a parking area. Union Court, built in 1905 as a hotel, is a 37,940-square-foot, five-story building. The 39-unit property includes a community room, covered courtyard, common laundry facilities and a parking area. All units are available to seniors and disabled individuals earning at or below 60 percent of the AMI. POAH plans significant renovations to both properties. This includes plumbing upgrades and replacing the roofing, windows and doors, as well as bathtubs.

***

The grand opening of the Hickory Hill Recovery Center for Men in Knott County, Kentucky was Sept. 11. The facility will be part of the Recovery Kentucky Center and will offer a supportive housing and recovery program for men suffering from chronic substance abuse and addiction. The Kentucky Housing Corporation provided $700,000 in LIHTCs and $1.1 million in HOME Investment Partnerships program funds. A total of 68 efficiency apartments are provided and development costs totaled $7.8 million.

***

On Sept. 15, Swords to Plowshares, a veteran service agency, received approval to develop an affordable permanent housing site in San Francisco’s Mission Bay neighborhood. The development is a joint venture with the Chinatown Community Development Center and the property will house 50 homeless veterans and 50 low-income families earning up to 60 percent of the AMI. Plans include three building wings and a central courtyard. There will also be on-site supportive services for residents. The development is scheduled to break ground by early 2017, with the building ready for occupancy by the end of 2018. Development costs are expected to be $50 or $60 million. Funding will come from local, state, federal and private sources, including 9 percent LIHTCs and funds available through the Veterans Housing and Homeless Prevention program.

***

Rockport Mortgage Corporation, a national provider of Federal Housing Administration (FHA) multifamily and health care financing, announced Sept. 9 the investment of $17 million for the acquisition and substantial rehabilitation of Pinnacle Park Apartments in Knoxville, Tenn., formerly the Arbor Place Apartments. The rehabilitation of the 200-unit low- and moderate-income housing community will be completed using funds from the U.S. Department of Housing and Urban Development (HUD) 221(d)(4) program, 4 percent LIHTCs, short-term tax-exempt bonds and multiple-tranche financing. The property also has a project-based Section 8 rent increase.

***

Cathedral Development Group (CDG) announced Sept. 14 the closing on a $44 million refinancing of Westward Ho Apartments in Phoenix. The 289-unit affordable rental housing community opened in 1928 as a hotel. The property was converted to affordable housing in 1979 and is now available to seniors. The refinance included an FHA Section 221(d)(4) substantial rehabilitation loan, $1.5 million in 9 percent LIHTCs, as well as federal historic tax credits (HTCs). The FHA loan was provided through Berkadia Commercial Mortgage, while the LIHTC equity was syndicated through The Richman Group and provided by Bank of the West. Arizona Department of Housing allocated the tax credits. Rehabilitation costs are projected at $14 million and repairs will include but not be limited to upgrading in-unit features, windows, mechanical systems and plumbing systems. Rehabilitation is slated for completion by the end of 2016.

***

The grand opening of the Duffy School Apartments in Florence, N.J., was Sept. 28. Development of the 53-unit senior apartment community was funded with $1.04 million in LIHTCs, which generated approximately $10.1 million in private equity. The redevelopment involved the adaptive reuse of the historical school building into 35 affordable rental housing units. The new construction provided an additional 18 units. Of these units, seven are available to households with incomes at or below 30 percent of the AMI and five are reserved for homeless seniors. Of the remaining units, 25 are available to residents earning at or below 50 percent of the AMI, and 21 units are reserved for residents earning at or below 60 percent of the AMI. Amenities include a community room, a fitness center, a library, a craft room, an entertainment facility and office space. Development costs were $14 million. The property is expected to provide approximately $2.5 million in ongoing economic output, with 14 direct and indirect full-time equivalent jobs.

***

On Sept. 22, the New Jersey Housing Mortgage Finance Agency (NJHMFA) celebrated the grand opening of Apartments at the Mill in Burlington, N.J. The former knitting mill was redeveloped with $1.2 million in LIHTCs. Other funding included $500,000 from Burlington County HOME Investment Partnerships program, $780,000 from the Federal Home Loan Bank of New York and a permanent mortgage from NJHMFA. Apartments at the Mill is located on 2.96 acres and provides five buildings housing 65 one-, two-, and three-bedroom affordable units for low- to moderate-income households. Of these units, five are available to households with incomes at or below 20 percent of the AMI and reserved for individuals with special needs, two units are at or below 30 percent of the AMI, 26 units are at or below 50 percent of the AMI and 32 units are at or below 60 percent of the AMI. The property is anticipated to produce $2.7 million in ongoing economic output and approximately $150,000 in state and local taxes annually. A total of 15 direct and indirect/induced full-time equivalent jobs were also provided. Development cost was $15 million.

***

The Alden Foundation, a nonprofit organization specializing in building affordable housing units for seniors, held the official groundbreaking of Woodridge Horizon Senior Living Community in Woodridge, Ill. in early September. Construction was funded with $1.42 million in LIHTCs. Other sources of funding include state grants and HOME funds administered by DuPage County. Construction on the four-story, 93-unit brick building began in June. There will be one- and two-bedroom apartments for rent to seniors 62 and older. Of the 93 units, 90 will be offered at affordable rates while two will be rented at market rates and one will be reserved for a maintenance manager. Amenities will include a fitness center, a game room, a computer lab and a library. The Alden Foundation has received 119 pre-applications and 41 full applications for residency. Cost for the senior housing community is expected to reach $21 million, and the property is scheduled to open in August 2016.

 

PEOPLE IN THE INDUSTRY

On Sept. 8, Massachusetts Gov. Charles Baker appointed Michael J. Dirrane chairman of MassHousing board of directors. This is Dirrane’s second time serving as chairman; his first term ran from 1995 to 2009. He is also MassHousing’s longest-serving board member, first serving in 1993. Dirrane is the senior managing director at National MI Holdings. Before this current role, he held senior positions at Mortgage Guaranty Insurance Corporation, Amerin Guaranty, GE Mortgage Insurance Company, Fannie Mae and PHH Corporation. He began his career at MassHousing in the 1980s. In addition, on Sept. 23, Baker announced the appointment of Margaret F. Wagner and Ping Yin Chai to the MassHousing board. Wagner is managing partner at First Atlantic Capital LLC, a real estate investment company working on acquisition, ownership and redevelopment of multifamily housing communities throughout the United States. Chai is the president and chief executive officer of Salem Five, a financial services institution.

***

The Federal Reserve Board announced Sept. 22 the members that will make up its newly formed Community Advisory Council (CAC). The 15 individuals of CAC have consumer- and community-development-related expertise and will provide information, advice and recommendations to the board on a relevant policy matters and emerging issues of interest. CAC members will initially serve one-, two- or three-year staggered terms, but going forward, new members will be appointed to three-year terms. The first meeting will be Nov. 20. A list of members is available at www.federalreserve.gov.

***

Sheila Crowley, president and chief executive officer (CEO) of the National Low Income Housing Coalition (NLIHC), announced Sept. 22 her retirement, slated for April 2016. Crowley has been with NLIHC for 17 years. She was involved in creating the National Housing Trust Fund and ensured the NLIHC remained a source of affordable housing information for policymakers in Washington, D.C. The board of directors is working to find the next president and CEO.

***

On Sept. 24, BRIDGE Housing announced Marie Debor as the vice president of development for the nonprofit developer, owner and manager of affordable housing. Before joining BRIDGE Housing, Debor was with The Related Companies for 13 years, most recently as vice president of development. Before that, she was a commercial real estate appraiser for FMV Opinions, and a market research analyst for Cushman & Wakefield.

***

On Sept. 22, the Federal Reserve Board announced the selection of Mary Tingerthal as a panel member. Tingerthal, the Minnesota Housing Finance Agency commissioner, will be part of the 15-member panel offering input on how federal monetary policy affects the needs of low- and middle-income consumers. The panel will offer perspectives on affordability, vacancy rates, ownership stability and ethnic disparities in housing.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

Learn more about Novogradac's expertise and many services