Monthly Columns Archives

This is an auspicious year.

A U.S. District Court for the Northern District of Texas recently granted an injunction to extend the Community Reinvestment Act final rule’s effective date, April 1, along with all other implementation dates. Here’s what you need to know about the case and how it will impact LIHTC investment.

Names can outlive their purpose and their original meaning. Though the Holy Roman Empire was neither holy, nor Roman, nor an empire, a cluster of mutually distrustful principalities with a largely symbolic head of state known as the Holy Roman Emperor maneuvered under that rubric for a thousand years after its 800 AD founding by Charlemagne before it was put to sleep by the 1815 Congress of Vienna. Such may yet be the fate of two venerable concepts, Fair Market Rent (FMR) and the Area Median Income (AMI). 

Due to the COVID-19 pandemic and resulting impacts on the economy and financial markets, as well as the Federal Reserve’s raising of short-term rates to stave off inflation, interest rates and construction costs have risen dramatically, resulting in funding gaps that many multifamily affordable housing developers in the four percent LIHTC space have had difficulty filling.

I just had the privilege of watching a National Housing & Rehabilitation Association member interview Gloria Steinem for his webcast. At 90, Steinem has not lost a beat. She is as eloquent, thought-provoking and inspiring as ever.

Recent good news has me feeling like the affordable housing industry is awakening from a bleak winter into a springtime blossoming with federal action that will make it easier to build and preserve affordable housing.

Those who say you can’t put a price on virtue have never worked in the capital markets. Although people say they value many things, what they actually pay for is what they truly value. Increasingly, that is virtue, or the appearance of virtue, now manifesting itself in the availability, terms, security and risk-adjusted yield of debt or equity instruments.

Against a backdrop of rising rents nationwide and a lack of housing supply in major cities, suburbs, and rural areas, leaders in Washington, DC are devoting significant time and attention to addressing the affordable housing crisis. President Biden, in his March 7th State of the Union address, called for Congress to enact his plan to “build and renovate two million affordable homes and bring…rents down.”

The needs of the public housing portfolio are well documented: annual shortfalls in Congressional funding dating back to the 1980s have contributed to an estimated capital backlog of $70 billion.

In 1998, when North Carolina Democrat-turned-Republican Lauch Faircloth added the amendment for which he became infamous, the Department of Housing and Urban Development and Public Housing Authorities (PHAs) were in a protracted bureaucratic standoff combining the worst features of medieval sieges and the First World War.   

If 20 years ago you had told a young Henry Santana that someday he would run for Boston City Council, the recent immigrant from the Dominican Republic growing up in public housing would have thought you were playing a joke on him.

Public housing in the U.S. dates back to the Housing Act of 1937 when Congress created local housing authorities to build public housing for millions who were struggling after the Great Depression.