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Novogradac Journal of Tax Credits Volume 1 Issue 8

The August 2010 issue of the Novogradac Journal of Tax Credits.

Journal cover August 2010

Articles

Michael J. Novogradac

Sunday, August 1, 2010

Project-based Section 8 rental assistance can be a powerful leveraging tool for low-income housing. This is the basic idea behind HUD’s Rental Assistance Demonstration (RAD).RAD is using Section 8 leveraging to great effect and increasing use of project-based Section 8 to spur redevelopment of public housing and other properties across the country. The fiscal year 2018 budget greatly increased the cap on the number of public housing units that can go through RAD, causing many public housing agencies (PHAs), developers and other housing industry players to consider RAD for the first time. The concepts behind RAD are simple, but implementation can get confusing quickly.These tips can help you avoid unnecessary obstacles and help you maximize your project’s potential. Tip 1: You don’t know what you don’t know. Many RAD stakeholders approach the program having familiarity with some HUD programs, but not others. For example, many otherwise HUD-savvy individuals do not necessarily realize that there are multiple Section 8 programs. RAD highlights the two largest: project-based rental assistance (PBRA) and project-based vouchers (PBV). PBRA is administered by HUD’s Office of Housing (Housing) through HUD, state housing finance agencies (HFAs) or performance-based contract administrators (PBCAs). PBVs are administered by HUD’s Office of Public and Indian Housing (PIH) through local PHAs and state HFAs. While PBRA and PBV are similar, different and distinct rules and regulations

Jennifer Dockery

Sunday, August 1, 2010

Pineda Village, a scattered-site, 144-apartment public housing development in Cocoa, Fla., is a landmark achievement for the Cocoa Housing Authority (CHA).In the wake of the 2013 takeover of the agency by the U.S. Department of Housing and Urban Development (HUD), the CHA is back in control and converting its entire inventory through HUD’s Rental Assistance Demonstration (RAD) program. The process will start with Pineda Village, which will be followed by the rest of the 183 units in CHA’s public housing stock. Funding will come through equity from low-income housing tax credits (LIHTCs).“The best and the speediest option for us was to renovate,” said Herb Hernandez, executive director of CHA. “We applied six times for LIHTCs and on the sixth time, we won $13.5 million for Pineda Village.”Hunt Capital Partners provided $12.7 million in LIHTC equity for the development. Construction began in June and the property has a June 2019 completion date, with a cost of $22 million. Smith & Henzy Advisory Group Inc. is the co-developer.“Pineda Village shows that RAD works for all sizes of PHAs,” said Charlie Rhuda, a partner in Novogradac’s Boston office, who worked with CHA on the development. “Herb and his team were patient and the winners are the residents who will live in the refurbished apartments.”[scald=173451:embedded_image_100 {"link":"https://www.novoco.com/atom/173451","linkTarget":"_blank"}]Image: Courtesy of Cocoa Housing Preservation IIWhen completed, Pineda Village in

Owen P. Gray, CPA

Sunday, August 1, 2010

Question: Can you use new markets tax credit (NMTC) financing to purchase an existing building?

Jennifer Dockery

Sunday, August 1, 2010

When HRI Properties, local developer David Watkins and former NFL running back Deuce McAllister began renovating the historic King Edward, Standard Life and Hines Motor Company buildings in downtown Jackson, Miss., the area had been losing residents and businesses for decades. Visitors to the King Edward’s upper floors in 2008 could gaze into the surrounding buildings through the gaping holes in their roofs. The Jackson Redevelopment Authority (JRA), which owned the three iconic buildings, believed that renovating the structures could bring businesses back into downtown. Now, as HRI completes the last phase of development, JRA can celebrate the smaller redevelopment projects that the project has spurred in the state capital.

Forrest D. Milder

Sunday, August 1, 2010

Reed Realty Group of Portland, Ore., found the site of the future Pac 10 Lofts apartments in Lawrence, Mass., through a combination of old-fashioned grunt work and new technology.“We didn’t find the building first, we found the market,” said Josh Blevins, director of historic redevelopment and government affairs at Reed Realty Group. “We have a model that identifies cities and [metropolitan statistical areas] to look at and once we identified Lawrence as a city, we looked for buildings. The ‘magic’ [behind finding the site] was a guy sitting in Portland–I think it was actually our managing director, Scott Reed–using Google Earth and Street View to check out underused buildings that didn’t have a for-sale sign on them on the other side of the country. It was modern technology and some old-fashioned luck.”The luck had a payoff. Reed Realty Group is in Phase 1 of a two-step renovation of a section of the former Pacific Mills wool complex in Lawrence into affordable housing. This phase includes 180 apartments, including 40 workforce homes for moderate-income households. Financing includes equity from low-income housing tax credits (LIHTCs) and state and federal historic tax credits (HTCs), with U.S. Bank as the sole investor.Reed Realty Group purchased the building in May 2016 and construction began earlier this year.“We’re super-excited,” Blevins said. “It’s a big building that’s a block off the main commercial street in Lawrence (Essex Street), where there are so many small


News Briefs

Sunday, August 1, 2010

The federal bank and thrift regulatory agencies announced a series of public hearings on modernizing the regulations that implement the Community Reinvestment Act (CRA). Interested parties are invited to provide testimony and written comments...

Sunday, August 1, 2010

In a June notice, the U.S. Department of Housing and Urban Development (HUD) detailed the general requirements for the agency's fiscal year 2010 competitively awarded grant programs. HUD also included new requirements for applicants to comply with state and local laws banning housing discrimination based on sexual orientation...

Sunday, August 1, 2010

The U.S. Department of Housing and Urban Development (HUD) released in June its 2010 notice of funding availability (NOFA) policy requirements and general section to its fiscal year (FY) 2010 NOFAs for discretionary programs. The notice gives prospective applicants for HUD's competitive funding...

Sunday, August 1, 2010

The Iowa Utilities Board (IUB) adopted rules in July that encourage the development of more state small wind generation systems by simplifying interconnection with electric utilities. Designated small wind innovation zones will be established in political subdivisions to expedite the local government approval process for these wind generation systems...

Sunday, August 1, 2010

National New Markets Fund LLC closed a $7 million new markets tax credit (NMTC) investment with U.S. Bank to complete funding for the Next Generation Health Care telemedicine project in northeastern Ohio. When it is completed in February 2011...

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