Low-Income Housing Tax Credits News Briefs - October 2012

Monday, October 1, 2012

AFFORDABLE HOUSING INDUSTRY BRIEFS

A recent study by the U.S. Department of Housing and Urban Development (HUD) found that the majority of low-income housing tax credit (LIHTC) properties remain affordable to working families even after they transition out of the initial mandated 15-year affordability period. Though additional affordability requirements may be placed on these developments to keep them affordable longer than the first 15 years, HUD has still expressed concern that properties may eventually convert to market-rate housing that would be unaffordable to low-income renters. According to the study, more than a million LIHTC units will be eligible to leave the affordable housing category by 2020.

***

In a recently published paper, Nancy O. Andrews, president and CEO of the Low Income Investment Fund (LIIF), and Audrey Choi, managing director and head of Morgan Stanley Global Sustainable Finance, argue for the building of more transit-oriented development (TOD) communities or housing planned with public transportation as a primary focus. In “How Transit-Oriented Development Can Help Get America to Work,” Andrews and Choi found that the jobs of low-income workers in particular have moved further away from city centers, convenient public transportation and affordable housing. They write that these workers must then put more time and money toward commuting. Andrews and Choi suggest TOD would make quality jobs much more accessible for those living in affordable housing and that the benefits from a reinvigorated workforce will benefit both the housing communities and the local economy as a whole. The paper is available at www.morganstanley.com.

***

The Affordable Housing Investors Council (AHIC) welcomed seven new members to its organization. The institutions are BOK Financial, BB&T Bank, Deutsche Bank, M&T Bank, Prudential, Rabobank and RBS Citizens. AHIC is a national trade association for affordable housing investors, established in 1995 to promote best practices in the field and to standardize data collection and reporting. AHIC membership includes invitations to national conferences three times a year, access to members-only informational resources and networking opportunities. Information on AHIC membership is available at www.ahic.org/membership.

***

The National Multi Housing Council (NMHC) and the National Apartment Association (NAA) ran ads at the Republican National Convention and the Democratic National Convention to communicate the contributions of housing developments in creating jobs. The ads ran in POLITICO last spring and portray rental apartment housing as the new American Dream in terms of job creation and flexibility for renters. NMHC and NAA have also launched a new video series featuring NMHC President Doug Bibby addressing misconceptions about the need for apartment housing and consumer choices. The ads are available on www.nmhc.org and the videos can be found on www.youtube.com/nmhcapartments.

DEALMAKERS

Boston Capital announced it will invest in the construction of two New York state affordable multifamily developments. Situated on 8.76 acres, Gloversville Housing will offer families 48 units with central air, dishwashers, a patio or balcony and laundry facilities on each floor. In addition to a playground and basketball/volleyball court, there will also be a 1,368-square-foot community center with a kitchen and a common computer learning space. The units will be available to households earning 60 percent or less of the AMI. The Valatie Senior Housing property will feature 32 units in one two-story elevator building. Each unit features central air conditioning and a patio or balcony. Common spaces include a community room with kitchenette, a computer room, laundry facilities and garden. Units will be available to seniors with household incomes 60 percent or less of the AMI.

***

Centerline Capital Group announced it will provide a $2.45 million Federal Housing Administration (FHA) loan to acquire and help rehabilitate Clear Horizons Apartments, a nine-building apartment complex in Shreveport, La. The proposed changes will also be funded though 9 percent LIHTC equity that PNC Bank invested in the property. The borrower, Summit Clear Horizons LP, estimates improvements will cost an average of $66,000 per unit and will include new kitchens, bathrooms, carpet, flooring and washer/dryers. The electrical wiring and mechanical systems will be upgraded. There will be new roofs for all nine buildings in the complex, as well as a new community center building. Built in 1971, the 84-unit property is subject to a project-based Section 8 HAP contract and will be affordable for residents earning up to 60 percent of the area median income (AMI) in Caddo Parish.

***

More than 50 Cincinnati community leaders attended the Aug. 9 groundbreaking for the Talbert House Grand Development Initiative, composed of 39 single-bedroom units in East Price Hill. Talbert House, a nonprofit organization, also provides services in adult behavioral health, community care, court and corrections, housing and youth behavioral health. The Grand Development Initiative was funded partially by LIHTC equity provided by Fifth Third Bank. Primary Grand Development partners include CinTech Construction, Creative Housing Resources LTD, Federal Home Loan Bank of Cincinnati, Fifth Third Bank, Ohio Housing Finance Agency, Ohio Capital Corporation for Housing, and the U.S. Department of Housing and Urban Development. .

***

Great Lakes Capital Fund (GLCF) recently received $953,806 from the Community Development Finance Institutions (CDFI) Fund that the fund will use for initiatives in Illinois, Indiana, Michigan, New York and Wisconsin. This grant will help cover many predevelopment costs such as architectural services, legal counsel fees, land acquisition costs and preconstruction work for multifamily affordable housing initiatives. The housing will be made available to those with household incomes of 60 percent or less of the AMI.

***

Boston Capital announced it will invest in three affordable developments in Oklahoma. Cedar Hollow in Harrah will consist of 29 single-family homes complete with two-car garages and outdoor patios. Common amenities will include barbecue grills, a picnic area, a playground and sport court. Cedar Hollow will be open to families earning 50 percent or less of the AMI. Cottage Park-Shawnee in Shawnee will be a 32-unit property for seniors. Units include dishwashers and a one-car garages. There will also be a 1,200-square-foot community building. Units will be available to seniors earning 60 percent or less of the AMI. Cross Creek Landing in Oklahoma City will be a 44-unit development for seniors with frost-free refrigerators, dishwashers and a one-car garage. These units will be available to seniors earning 50 percent or less of the AMI. All three properties feature Energy Star appliances, ceiling fans and washer/dryers.

***

The American Institute of Architects, California Council (AIACC) awarded Daly Genik Architects the 2012 Merit Award for Architecture for its work on the Tahiti Housing Complex, a 36-unit affordable housing development in Santa Monica, Calif. Developer Community Corporation of Santa Monica completed the property in 2009 on the site of a deteriorated apartment complex. One of the main architectural objectives was ecological responsibility, so the Daly Genik team designed Tahiti to exceed LEED standards. None of the six three-level buildings have air conditioning units. Balconies instead stagger direct natural daylight and a centralized bamboo grove encourages natural ventilation by creating a microclimate. In addition to environmental sustainability, other criteria for the AIACC award included quality of design, resolution of idea, innovation, thoughtfulness and technique.

***

TCAM, an asset management company based in Boston, Mass., has established a preservation desk to better serve clients seeking to invest in older affordable housing properties. It will also handle the needs of clients who want to leave or recapitalize those older investments. Among the other expanded services TCAM will offer through the preservation desk are refinancing, property sales, transfers of LP interests and other structured solutions.

***

Eden Housing, Community Working Group and the city of Palo Alto hosted a frame-up celebration and hard hat tour of 801 Alma Family Apartments, a new affordable housing property in downtown Palo Alto, Calif. The multifamily development features 50 housing units, an on-site manager’s unit, a community room, landscaped outdoor and barbecue space and a computer learning center. The property is located only two blocks away from the downtown transit station and is within walking distance to schools, shops, medical facilities and other amenities. Units will be available to family households earning 30 percent to 50 percent of the Santa Clara County AMI.

STATE BRIEFS

The Minnesota Housing Partnership released a set of county-by-county reports revealing a 94 percent deficit in available rental housing to low-income residents. According to the study, only 40 rental units are available for every 100 extremely low-income renters. The report also finds that during the course of a year, the average Minnesotan working in food service or retail sales will fall more than $10,000 short of affording decent housing and basic necessities, such as quality food and proper medical care. The report shows that in every county, there are families spending more than half of their income on housing. The county profiles can be found at www.mhponline.org.

***

The California Tax Credit Allocation Committee (TCAC) published a memorandum proposing an update of the state’s 10 current geographic apportionments. Parts of the propositions for 2013 include an updated methodology in determining apportionments and inclusion of the city of Los Angeles as an 11th region. The current methodology was based on the population estimates of each county, housing cost, poverty and urbanization. TCAC suggests a new system based on a region’s tenant population of low-income housing tax credit (LIHTC) properties, minus the estimated rural population. TCAC will also consider two population-based datasets by the U.S. Census Bureau’s American Community Survey (ACS). The first is based on the percentage of households with very low-incomes, 50 percent or less of the area median income (AMI). The second is based on renters with a high housing cost burden, a gross rent of 50 percent or more of the household income. Details are available at www.treasurer.ca.gov.

***

The North Carolina Housing Finance Agency (NCHFA) funded 42 LIHTC developments in 30 counties this year, totaling 2,482 units. The recipients, chosen from an initial pool of 97 applicants, were awarded nearly $22 million in federal LIHTC allocation. Top awardees include the 103-unit Long Creek Apartments in Dallas with $868,606, the 74-unit Boulevard Phase II in Charlotte with $865,439 and the 100-unit Royal Oak Gardens in Kannapolis with $804,589. A full list of recipients is available at www.nchfa.com.

***

Dakota Western Bank contributed $275,000 to the North Dakota Housing Incentive Fund (HIF) to help bridge a funding gap for The Landing, a 24-unit multifamily property in Bowman, N.D. The total cost for developing the apartment complex is more than $3 million. HIF provides low-cost financing to affordable rental housing developers and is funded by state taxpayers. Those who contribute to HIF receive a dollar-for-dollar state income tax credit. Once completed, The Landing will house disabled adults and families in need of low-income housing.

***

The Lowndes County board of supervisors in Mississippi has approved a change in the way properties receiving LIHTCs are valued. The previous income approach assessed the income generated for property owners from rental units. Local officials complained that the formula led to the county charging non-LIHTC property owners higher rates to compensate. Lowndes County will now use a cost assessment approach under which developments are evaluated according to the real cost of the property. Discussion on the issue will continue as at least two lawsuits are already pending.

PEOPLE IN THE INDUSTRY

The National Housing & Rehabilitation Association (NH&RA) announced the 2012 Affordable Housing Vision Awards recipients. This year’s winners include James Keefe and Patrick Lee, founding partners of developer Trinity Financial, Inc. in Boston, Mass. The third winner is Patrick Clancy, former president and CEO of Boston-based nonprofit developer The Community Builders, Inc. Keefe and Lee have spent more than 25 years developing market rate, subsidized and affordable housing for the Boston area. Clancy led his company to become one of the country’s leading mixed-income housing developers. An award ceremony will be held in Boston on Oct. 29 during the NH&RA Fall Developers Forum. The Vision Awards have been presented annually since 2004 to outstanding affordable housing and community development leaders in the private and nonprofit sectors.

***

Preservation Housing Management LLC (PHM) has appointed Kevin Baptista as the new director of business development. A licensed Massachusetts real estate broker, Baptista’s new role will include revenue management for the subsidized, market rate and mixed-income revenue garnered from PHM’s portfolio in nine states and the District of Columbia. Baptista previously worked at MassHousing’s preservation department where he strategized the usage of LIHTCs, federal and state loan funds, and taxable and tax-exempt bond financing. He is involved in the MIT Center for Real Estate and the Institute for Real Estate Management.

***

Great Lakes Capital Fund has hired Trey Phillips as a new asset manager for its Chicago, Ill. office. Phillips will oversee a multifamily asset portfolio spread across the Midwest. He has an MBA with concentrations in both investment management and real estate finance and investment from DePaul University. Prior to his career in real estate, Phillips served the U.S. Army as an infantry staff sergeant and received the Army Commendation Medal for service in Iraq.

***

The New York City Housing Authority (NYCHA) has named Cecil House its new general manager. Most recently, House was the senior vice president for operations at Southern California Edison, an electric utilities firm with 18,000 employees. Before that, he served as a senior vice president for the operations support business unit and as the chief procurement officer. He has a bachelor’s degree from the McIntire School of Commerce at the University of Virginia, a J.D. degree from Harvard Law School and a master’s degree in business from Columbia University. NYCHA has also appointed Andreas Spitzer as chief financial officer and executive vice president for finance. Prior to this appointment, he was NYCHA’s vice president for strategic investments and finance, during which he oversaw the treasury division. A certified public accountant, Spitzer holds a bachelor’s degree from Virginia Tech University and a master’s degree in business from Cornell University.