Breaking Ground
Sharon Wilson Géno, President, National Multifamily Housing Council
By Darryl Hicks
12 min read
Five years ago, I interviewed Sharon Wilson Géno when she was executive vice president and chief operating officer at Volunteers of America National Services (VOANS), the housing and healthcare affiliate of Volunteers of America, one of the largest nonprofit affordable and mixed-income/mixed-use housing and senior care operators in the nation.
About a year ago, Wilson Géno left VOANS to become president of one of the most influential housing advocacy organizations in Washington, DC, the National Multifamily Housing Council, after its long-time president Doug Bibby retired.
So far, the role seems to be a good fit for Wilson Géno, a 30-year veteran of the housing industry and attorney by trade, who has helped guide numerous for-profit, nonprofit and governmental entities around housing affordability, community development and other housing policy challenges.
Tax Credit Advisor sat down with Wilson Géno to talk about NMHC and the important work it’s doing.
Tax Credit Advisor: There are a lot of organizations in Washington, DC that advocate for more affordable housing. What distinguishes NMHC and its members from these other organizations?
Sharon Wilson Géno: We work collaboratively with a lot of different organizations, but NMHC is really a nice umbrella that allows various groups to work together, develop consensus and speak to lawmakers with a single voice. In terms of NMHC members, our core members are owners, developers and managers of multifamily housing. Every segment of the rental housing market is represented, including senior, workforce, affordable and Class A. We also have a number of members who are increasingly interested in single-family build-to-rent. It gives us an opportunity to get that holistic view from the owner, developer and manager side, as well as the suppliers that help support their work.
TCA: NMHC and its members have been engaged on the issues of rent control and tenant rights. What do you think about these issues and how do they intersect with the dearth of affordable housing?
SWG: They’re completely intertwined. Sadly, data collected over many years has shown that rent control hurts renters and decreases the supply and quality of housing. Thankfully, people are increasingly concluding that housing supply is ultimately the answer. Rent control runs against that in terms of how it fits in certain localities. It’s also, I think, a civil rights issue. Folks who need affordable housing are a growing segment of our population. They are sometimes people of color, and if we’re not building and investing in communities of opportunity, we’re really shutting those people out. It’s an important issue, not just for market-rate apartments, but for affordable and every segment of the population. In the affordable space in particular rent control impacts the Fair Market Rent (FMR), which is the driver for Section 8 and other rental subsidies, so it will put them in a position where they will not be able to access perhaps all the subsidies that they need to cover their costs. What gets lost in this conversation is that some of the biggest cost drivers in rental housing are often state and local taxes and increasingly insurance. Those are things that the owner has to pay, regardless of what rent is collected. Those costs have been increasing dramatically, so it’s very important that the rents be set to ensure that they cover these costs while providing a reasonable rate of return. We also are finding ourselves in an environment where the cost of capital is increasing due to interest rate increases and inflationary pressures. If we want to build enough affordable housing, we’ve got to be able to access the capital markets, because the government has not supported affordable housing in a way that it should. If you need healthcare assistance in this country, there’s Medicare and Medicaid. If you’re eligible, you get it. If you need food stamps and you qualify, you get them. If you need housing assistance in this country, you could wait a decade or more. We simply don’t have enough housing. The people who are eligible, we’re not providing assistance for them to go into the private market, and when the private market is not incentivized to build more housing, it makes it even more difficult to use the subsidy programs that we have.
TCA: The theme for this TCA issue is property management and operations. What issues in this area are you currently monitoring?
SWG: One is the recent White House initiative for a Tenant Bill of Rights that suggests different notice periods and other things that would be different from what state law normally requires. The Federal Trade Commission and the Consumer Financial Protection Bureau recently requested information about fair credit and screening practices. There’s been a big initiative concerning what fees are appropriate to charge in rental housing. Most recently, the Federal Housing Finance Agency asked a number of questions about rent control and operations. These are steps that have the potential to significantly impact business operations and increase costs. The big overarching driver, and this isn’t getting enough attention yet, is the increase in fraud. It is astronomical. It’s becoming too easy to buy a new identity on the internet and to create fake pay stubs that people are using to misrepresent themselves in the rental housing screening process. They’re going into apartment units that perhaps they can’t afford, or they don’t have the appropriate payment history to support, and then because evictions have been deterred by certain state and local courts, they’re just staying there. Landlords are unable to turn those units over. These fraudsters are not paying rent, which hurts everybody else in the building. We’re working with members on several solutions to figure out a solution on the front end.
TCA: That’s very interesting and troubling. What else can you share about this fraud issue?
SWG: Despite what people say, no one has reliable eviction data across the country. You can’t get it. But anecdotally a number of people were saying, ‘Hey, are evictions really going up or not? Let’s find out.’ One of our members went back and looked at 2,000 evictions over the last year, starting at the application process, to find out what went wrong and why residents were not successful. This member found fraud in 60 percent of those upfront applications. If that is indicative of what’s going on across the country, it is truly becoming an epidemic.
TCA: Tell us about the NMHC Research Foundation. Why was it created and what noteworthy research has been developed recently?
SWG: It was created by my predecessor, Doug Bibby, and it’s now called the Douglas Bibby Research Foundation. Doug was foresightful about the need to focus academic research on opportunities to create more housing. We’re looking at different projects and leveraging external voices to create independent research that not only informs us on potential housing policies, but also helps us expand the housing supply. The most recent project involved a partnership with the Urban Land Institute that looked at the potential adaptive reuse of commercial office space. The findings from the case study show that there are opportunities in certain kinds of buildings, certain geographies and certain segments, but most office buildings are not constructed in a way that they’re easily adaptable for multifamily. We’re looking at somewhere between ten to 15 percent. The cost-benefit of that is not going to be a panacea, but where it works, it works. Coming out of that, we have worked with congressional offices and there’s been a lot of positive feedback around both state and local cities creating tax incentives for people to convert office to multifamily. There was a proposal introduced in the last Congress that we’re hoping will be reintroduced to provide a federal tax credit to help support the conversion of office to multifamily housing.
TCA: NMHC covers the entire multifamily industry. What do you think about affordable multifamily as a segment of that?
SWG: It has always been an important part of our advocacy strategy, as well as networking, convening thought leadership – part of the work that we do. Our top three legislative priorities include the passage of the Low Income Housing Tax Credit Improvement Act, the reform and expansion of the Section 8 program and the continued protection and creation of additional tax incentives to create more housing. All of these priorities have an affordable component to them. Even market-rate owners who don’t play in the affordable space understand that having a supply of affordable housing is good for everyone because it creates a broader set of options and price points for people who need housing. From a thought leadership standpoint, we have long had a Workforce Housing Committee that bridges the gap between nonsubsidized workforce housing and subsidized housing, some of which is in that increasingly 60 to 120 percent of area median income bracket. That group is active and responsive to a number of proposals that have come down the pike regarding affordable housing.
TCA: Insurance has been particularly painful of late for many in our industry with exorbitant cost increases. What are some of the results from NHMC’s insurance survey?
SWG: The recent NMHC Insurance Survey shows overall that there’s been a 26 percent increase in insurance costs over the last year, but that doesn’t fall out evenly. Some places are seeing 100 to 200 percent increases depending on geography and other factors. This is a huge issue. People still perceive that rents are going up dramatically. There was a spike last year, but rents have come down finally over the last couple of months pretty close to pre-pandemic levels. We’re not seeing that emergency situation that’s been reported in the press. Nevertheless, there are some uncontrollable costs, as I said, state and local taxes are one and insurance is another. Many of the financing sources that multifamily developers rely on have specific insurance requirements, some of which are expensive. We have a task force that has been meeting to recommend solutions. Short-term, we think the federal government should provide additional subsidies for Section 8 and the LIHTC to help cover those costs. We don’t think insurance costs are coming down partly due to climate change and other factors in the insurance market. Long-term, there could be a role for the federal government to help backstop private insurance companies and for the GSEs and bank regulators to reexamine their rules for insurance coverages that are necessary to get certain kinds of financing. If you think about it, the federal government already plays a backstop role with flood insurance and terrorist insurance, so it’s not unprecedented to look at that more broadly in the interest of helping to build more housing stock that we desperately need.
TCA: You’ve been president of NMHC for about a year now. What’s the biggest lesson you’ve learned so far? What leadership style have you brought to NMHC that’s different from your predecessor Doug Bibby?
SWG: The biggest lesson, and I learn this from the staff every day, is that everything must get done in a collaborative way, across housing industry organizations, across different segments of the market, across political views and in a bipartisan manner the work that goes on here. I’m absolutely in awe of this staff and the work that gets done. So much goes on in the back room bringing people together, getting an agreement, building consensus and that to me is an important hallmark of success. In the more tense political environment that we have, it’s even more important now. In terms of leadership style between Doug and I, we’re the same in many ways and different in many ways. I didn’t know Doug well before I took this job, but I am pleasantly surprised at how much we saw eye to eye on housing issues and managing an organization. Doug ensured that affordable housing had a voice at NMHC. He was focused on diversity, equity and inclusion (DEI) efforts within NMHC and that housing providers be more diverse and equitable organizations. Doug shepherded, and I helped get it over the finish line, a housing equity guide in partnership with Enterprise Community Partners, which allowed us to create examples and highlight the importance of the collaboration between market-rate providers and affordable providers in solving the housing problem.
TCA: What are your policy priorities for 2024?
SWG: It’s housing supply, housing supply, housing supply. Anything we can do to facilitate an environment where we can leverage more capital to build the housing this country needs is top on our list. The rent control discussion is happening increasingly not just at the federal level—although there’s an argument to make that there’s not much the federal government can really do—but in the states and local communities. We’re working in coalition with other industry organizations to educate people on what the alternatives are and what we can do to increase supply. Some of those solutions include an expansion of government investment. This is a government problem. It can be solved by the government through financial investments and updating regulations that have impeded multifamily investment for too long, whether it’s changing zoning codes, creating tax abatement opportunities or implementing other things that shorten the time and the cost of developing multifamily housing.
We had over 300 million Americans in 2012 and that number is estimated to grow to 400 million by mid-century. That is a one-third increase in a short period of time. We’ve got to be ready for the population that we have today and the population we’re going to have tomorrow.
