The Guru Is In Archives

So powerful is the fear of the devil we don’t know that though everyone who works in affordable housing will admit privately that, as currently regulated, the Community Reinvestment Act (CRA) is broken in a policy sense, few will voice this publicly.

To stay profitable, an intermediary (syndicator, CDFI, mortgage originator, donor/technical assistance provider, development consultant) always has to have its own proprietary value proposition – a statement we make about ourselves that, if believed to be true, leads inevitably to the conclusion, ‘Do business with us’.

On September 6, 2008, the federal government nationalized Fannie Mae and Freddie Mac, a measure without precedent in global financial history, even more systemically dramatic than Pierpont Morgan’s single-handedly underwriting global liquidity to stop the Panic of 1907.

For affordable housing transactors, the goal line is the closing, and as it approaches, vision narrows until nothing exists but that.

Seventy years ago, American employers and insurance companies responded to the post-World War II economic and baby boom by developing over 50,000 apartments of largely unregulated private urban workforce housing rentals.

When, in the 1960’s, Lyndon Johnson launched the federal government into the regulated public- private partnership era of affordable housing delivery, the initiative drew on two decades of multifamily rental experience, about which until very recently I knew nothing – the benevolent insurance-company as workforce housing investor/developer.

Today the Guru turns 100.

Confession time: these days I seldom go to big-tent national affordable housing conferences. Half a day’s panels of my peers discoursing in informed erudite polyphony on the latest Washington bad news past, present or possible future leaves me enervated.

For more than half a decade now, we’ve heard unicorn tales of Social Impact Bonds (SIBs), and despite a compelling common-sense soundbite case, SIB sightings are rare, volume is minimal and replicable scalability at best theoretical…because we are having trouble putting together the right ingredients, the right government counterparties and the right sponsors.

Without realizing it, roughly 20 years ago American affordable housing drifted into its third new territory, and because its border isn’t demarcated, we’re wandering through it without a map.

In 1229, Christian monks in Jerusalem, rummaging about for parchment, unbound a centuries-old codex, scraped off what was written on it, refolded the leaves in half, and wrote atop the now-smaller book, at right angles, new liturgical texts for the Holy Land’s faithful knights.

By the time you read this, tax-exempt private activity bonds will be dead. Or they won’t. The New Markets Tax Credit will be dead. Or it won’t. The top corporate bracket will be 20 percent. Or it won’t.