Bring on the Spice

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3 min read

If variety is the spice of life, as the saying goes, then the world of low-income housing tax credits is very well seasoned.

This month we examine a few of the types of specialized LIHTC projects that target a particular niche. Rather than providing just affordable housing where families and seniors can live independently, these properties serve narrower segments of the population, such as persons with disabilities or artists; combine design features and services permitting seniors to “age in place”; or create affordable apartments and common spaces from the conversion of non-residential structures such as office buildings. (“Niche Development,” p. 12)

Niche development produces additional housing units, that’s for sure. But these developments often help achieve other goals for local communities as well, such as sparking or furthering revitalization in a particular neighborhood or even promoting cultural history. One example is El Barrio’s Artspace PS109, now under development in East Harlem by Artspace and a local partner, which will not only provide affordable live/work units for local artists and their families, but also preserve and enhance the neighborhood’s traditions as New York’s Latino cultural capital and restore a vacant former school building to productive use. (“A New York Jewel,” p. 4)

In this issue we also report on an exciting new development among community development financial institutions – specialized entities that provide capital and technical assistance for affordable housing and community development projects in underserved communities. Under the inaugural round of the new CDFI Bond Guarantee program, four CDFIs will now have access for the first time to a long-term source of capital, allowing them to offer long-term loans for affordable housing and community development projects. (“A New Resource,” p. 36)

That is certainly good news for the affordable multifamily housing industry. So, too, is the current state of the LIHTC equity market. (“On a Roll,” p. 26) Syndicators are raising large amounts of equity this year through their multi-investor and proprietary funds, and are seeing continuing stability in yields to investors and credit pricing to developers. Syndicators and others in the industry are also hopeful for the approval soon of an accounting rule change that many believe would stimulate even greater investment in housing credits,   perhaps even from companies not now investing in this product. If that happens, that would add even more spice and variety to the LIHTC capital pot – a shift that would be beneficial to our entire industry. Who says you can’t have too much spice?