New Developments: Shovel Ready in 2021
By Thom Amdur
5 min read
2020 was a year of superlatives. The worst, the longest, the most dysfunctional, the most frustrating, the most divisive, etc.…the entire world is more than ready to put the year in the rear-view mirror. Since dashing out my last column, we even got a little bit of good news, a hint that 2021 may be going in the right direction. Two Coronavirus vaccines were approved and distribution has begun. A desperately needed emergency relief package and year-end spending and tax package was enacted after months of congressional stalemate.
The end of one Coronavirus crisis may be in sight later this year, but it looks like we may still be in for another roller coaster year of drama. The dramatic victories of Senators Jon Ossoff and Raphael Warnock changed the balance of power in the 117th Congress, giving President Joe Biden’s legislative agenda a much-needed shot in the arm. The horrific riot on the grounds of the U.S. Capitol during the Presidential election certification on January 6 and the historic second impeachment of President Donald Trump in the last days of his administration also highlight how deep the divides are in this country, the challenges we collectively face and the difficulties the Biden administration will face finding common ground.
But common ground we must find. Too much is at stake for the health, economy, security and welfare of our country. Safe, stable affordable housing is critical to stave off the spread of the Coronavirus. Housing affordability could be that common ground. The crisis America’s low-and middle-income renters face exists in red and blue states. Housing-insecure Americans are particularly vulnerable to the Coronavirus and the underlying health conditions that increase its morbidity.
Affordable housing developers are in a position to lead the economic recovery in 2021. We have shovel ready projects in every state ready to put people back to work. The four percent Low Income Housing Tax Credit floor will drive additional units into the development pipeline at a critical juncture. In some respects, the COVID-19 era and the months leading up to has been housing’s national moment. We proved ready for the challenge and are poised to be a major part of the recovery.
Yet we still face some significant headwinds. My colleague Paul Connolly’s article in this issue delves into many of the challenges affordable housing developers and owners will face in 2021. I wanted to mention a few additional items that we will need to maximize our opportunity to deliver on the promise of more safe, decent, affordable housing in the year to come.
A recent survey by the Community Housing Improvement Program, a New York City association for landlords, found that NYC apartment owners are carrying more than $1 billion of bad debt from missed rent payments during the pandemic. The eviction moratoriums around the country have masked the public visibility of the forthcoming eviction crisis. Tenants and landlords urgently need the speedy deployment of emergency rental assistance and although Congress just appropriated funds, more will be necessary and soon if we are going to stave off a wave of devastating evictions in the spring and summer. I am very encouraged that President Biden’s recovery package makes a substantial commitment to emergency rental assistance. Let’s hope Congress will take it up as its first order of legislative business.
The four percent floor is going to have an incredible impact in the coming years, an enhancement for bond development, opening up new markets to the four percent program. Unfortunately, it will also exacerbate a trend and challenge many states are already facing – scarcity of private activity volume cap. Cap management will be the order of the day in 2021. As we map out NH&RA’s regulatory and legislative priorities this year, it is clear that advocacy at the state level to ensure that each state maximizes its allocation of Private Activity Bonds (PABs) to housing generally, and multifamily specifically, will be at the top of the list. Likewise, educational initiatives around how Housing Finance Agencies (HFAs) can stretch their cap further will be critical. This includes adopting bond recycling programs and developing more efficient single-family programs that leverage taxable and blended mortgage finance products. On Capitol Hill, we will push to lower the 50 percent test and update the statute to allow for HFAs to more easily recycle volume cap and if possible, expand the overall availability of PAB cap as an emergency measure.
I also hope that as public health agencies continue to rollout the delivery of the vaccine around the country that special considerations are made for prioritizing high-risk residents, construction workers and front-line workers in property management. Our property operations and resident service teams have been doing heroic work this past year and their safety should be prioritized. Our construction teams are ready to deliver a record year of production. We know our work is meaningful and impactful. Now let’s make sure nothing stands in the way.
