Tax Credit Advisor Article Archives

It’s the silly season again! Both the Republican and Democratic parties have now held their first presidential debates, and, as promised, they have been very entertaining. Now that the 2016 presidential campaign is really picking up steam and the bizarre Game of Thrones continues to play out in the US House of Representatives (outcome very uncertain at the time that I am writing this month’s column), I think we can safely predict that Congress is unlikely to change course and start passing reams of legislation this political season.

Developers, like renown bank robber Willy Sutton, naturally go where the money is. Yet for far too long, one place they have not been able to go as a potentially huge source of money to create quality affordable housing has been health care. That may be changing, and for the better.

Our staff writer Mark Olshaker and I spent the summer of 1981, the most glorious summer of each of our lives, traveling the country with a film crew and visiting the stars of the 1955 Brooklyn Dodgers for a documentary based on Roger Kahn’s bestselling book, The Boys of Summer. While Duke Snider was the color commentator at the time for the Montreal Expos, we found most of his former teammates in their 50s or 60s and working in their old hometowns: Pee Wee Reese worked in marketing for Louisville Slugger; Clem Labine managed a clothes manufacturing operation in Woonsocket, Rhode Island; Carl Erskine was a bank vice president in Anderson, Indiana; Roy Campanella, long disabled from a famous car accident, was a consultant for the Dodgers; Preacher Roe ran a family grocery store in Viola, Arkansas; and Carl Furillo, battling cancer at the time, worked as a night watchman at a factory in Reading, Pennsylvania.

You’re passing through a small town or city neighborhood and a building suddenly catches your eye. You see bracketed cornices and arched windows; everything looks stylish and solid, built back in an era when, as they say “people cared about quality.”

While what they literally built may have varied, each finalist for the 2015 J. Timothy Anderson Awards for Historic Preservation built a bridge. They built a bridge between what communities had and what they needed. In some cases, it was the bridge between yesterday’s industrial heyday and today’s housing shortage.

The federal Historic Tax Credit (HTC) program has seen a few ups and downs the past six years. The Great Recession that began in 2008, followed by the Third Circuit’s decision in Historic Boardwalk Hall LLC v. Commissioner in August 2012, led to a mass exodus of investors and caused major market disruptions.

To the list of American things that are growing more expensive in real terms, we must add the standard LIHTC apartment, and the principal reason is our capital sourcing model, the funding sieve.

Train bays, affordable housing, market rate apartments and a medical clinic squeeze into the Counting House Lofts, a new community in Lowell, Mass.

“The Big Picture is I’ve always felt that those of us who operate in this area are doing something that is helping to implement Congressional intent to try to make affordable housing available to people, and to try to foster the rehabilitation of historic buildings. And even though the work can be very technical and you’re dealing with very complicated provisions, when you step back and look at that Big Picture, I’ve always taken a lot of satisfaction that what we’re doing is doing good. That’s important to me.”

The homepage states, “The mission of the Department of Neighborhood Development is to make Boston the most livable city in the nation.” It then goes on to explain, “DND’s main functions are to set and implement the City’s housing policy, manage the City’s real estate portfolio, and strengthen Boston’s small businesses.”

Each year since 2004, NH&RA has bestowed its Affordable Housing Vision Award to affordable housing and community
development leaders who have made valuable contributions to the field and demonstrated years of leadership, commitment and imagination. Recognizing that providing housing for those who cannot meet the market rates is an always complex and challenging endeavor, demanding both perseverance and foresight, NH&RA seeks to single out men and women in all aspects of the industry whose careers and achievements serve as examples and role models. Traditionally, one individual is chosen from the profit sector and one from the nonprofit sector.

Over the better part of the past decade, given the extraordinary demand and competition for multifamily investment, many existing affordable housing properties nearing the end of their initial 15-year compliance period have been sold to “conventional buyers” whose goal is to drive high returns rather than be long term owner/operators of affordable housing.