Articles Archives

Editor’s Note: To help NH&RA members and their residents through the COVID-19 crisis, we have been collecting information from numerous sources on responses by governments, housing agencies, companies and professional associations. We will run this feature in each issue, as long as the crisis persists.

Across the country, affordable housing developers are turning to private activity bonds (PABs) and four percent Low Income Housing Tax Credits (LIHTC or credit) to finance their affordable housing transactions since the nine percent LIHTC remains persistently oversubscribed.

The rapid escalation of the COVID-19 Coronavirus Pandemic is having a deeply unsettling impact on how we live and how we work. It is testing our disaster response system in unanticipated ways and will require a new kind of resilience from us.

“RAD has been the most positive experience I’ve had working with HUD,” states Richelle Patton, president of Collaborative Housing Solutions of Decatur, GA, a consulting firm that specializes in creative problem-solving to develop affordable rental housing. She specializes in HUD’s Rental Assistance Demonstration program, has been involved with around 18,000 RAD unit conversions and has served as a RAD transaction manager for HUD.

Sherrod Brown is a senior statesman who has devoted his entire adult life to politics—representing Ohio’s residents for 45 years—and become one of the most powerful lawmakers in the United States Congress.

Since its launch in 2011, the Rental Assistance Demonstration program (RAD) has put hundreds of  thousands of public housing units under private management, across 44 states plus DC. All this activity was spurred by HUD’s change in incentives – after decades of defunding public housing, HUD decided to allocate money for RAD, showing that privatization is the agency’s preferred future model. But RAD has also shot off because it’s being blended with other HUD tools that better enable public housing repair and conversion. Two of these tools are Section 18 and Rent Bundling. 

Many of today’s affordable housing policies, from inclusionary zoning to strengthened tenant protections, are—whether you agree with them or not—growing out of coastal urban America. But one relatively new HUD program, Rental Assistance Demonstration (RAD), has become a Southern thing.

When the Opportunity Zones program was added to the bipartisan Tax Cuts and Jobs Act of 2017, it was presented as a triple bottom line win: helping underserved communities achieve economic growth and build wealth for residents and businesses; bringing a new source of investment dollars into those communities; and offering the new investors an attractive way to defer and even offset capital gains taxes.

Tax Credit Advisor sat down with Bernstein to get his thoughts on the role Opportunity Zones can play to help address the crisis, as well as other policy initiatives that Congress might focus on in 2020 to help generate more affordable housing.

The idea behind Opportunity Zones has been to encourage development in poor areas. Inspired by the Enterprise Zone concept championed in the 1980s by congressman Jack Kemp, the Trump Administration law is, according to the IRS website, “Designed to spur economic development and job creation in distressed communities…by providing tax benefits to investors who invest eligible capital into these communities.”

When asked about the December 19, 2019 final Opportunity Zone regulations, Jerome Breed, principal with Miles and Stockbridge P.C., said, “The IRS and Treasury did an excellent job with the final regulations. Of course, if I drafted the rules, I’d be happy with all of them.” John Gahan, partner with Sullivan and Worcester LLP, echoed the sentiment, “We as lawyers would never be completely happy with any set of rules.

The enactment of the 2017 Tax Cuts and Jobs Act and the creation of the Qualified Opportunity Zone Incentive (QOZI) has generated a great deal of activity by investors deploying capital in disinvested neighborhoods.