Tax Credit Advisor Article Archives

Catastrophe is both precondition for and stimulus of three things – sudden extinction, explosive innovation and enduring reform. As all three happen speedily, each vies with the other two for primacy.

House Democrats have unveiled the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act) and summary.

A recent Federal Reserve survey found that 39 percent of households that were working in February and were earning less than $40,000 a year lost their jobs in March or the beginning of April. Given these statistics and the target demographic, owners and managers of affordable housing have been preparing for dramatic declines in rental revenue.

In these darkest of times, this month’s Tax Credit Advisor devotes our pages to hope.

The residents we serve are amongst the most vulnerable to both the health and economic effects of the crisis so, as an industry, we cannot afford to take a break or slow down. Much of our vital work has continued (with modifications) under new social distancing protocols and I want to acknowledge our many colleagues who are risking exposure to ensure critical maintenance and services get delivered, construction projects remain on some semblance of a schedule and, of course, rents get collected.

Alan Jaffe is at the forefront of these efforts. Jaffe is managing director and head of the Public Finance Housing, Real Estate, and Project Finance Group at Jefferies, the largest independent investment bank in the United States. Jefferies is also a 50 percent owner of Berkadia, a market leading multifamily and commercial lender, investment sales provider and tax credit syndicator.

When a hurricane has devastated a project and the developer wants to get rehab work done before the next deadly storm season, speed is of the essence.

When it comes to allocation of Low Income Housing Tax Credits and complementing Private Activity Bonds (PAB), there’s only so much to go around. The IRS distributes both forms of financing to states based on population; as noted by the Affordable Housing Finance website, the 2020 LIHTC allocation “will be the greater of $2.8125 multiplied by the state population, or the small state minimum of $3,217,500. For private-activity bonds, the amount used to calculate the volume cap will remain $105 multiplied by the state population. The state minimum will be $321,775,000.”

The Hilltop Apartments was a previously market-rate rental apartment project that sits near the eastern city limits of Washington, DC, in the Deanwood neighborhood. Built in the 1960s, it had become a run-down project within a gentrifying area, and the natural market direction might have been to demolish it and build new market-rate housing that commanded higher rents.

Insufficient ventilation and insanitary surroundings reduce the vital resisting power of individuals exposed to such conditions; overcrowding causes closer contact with the infected individuals, and the absence of sunlight prevents the destruction of disease germs by nature’s principal disinfecting agent.

Adrian Iglesias founded Generation Housing Development in Dallas, TX in 2002 with the mission to provide affordable multifamily housing for families and seniors, “in sustainable communities that residents and city leaders can be proud to call their own.”

Renovating affordable housing units in San Francisco isn’t very affordable. Redoing the 202 units at Eastern Park Apartments, for instance, is estimated to cost $171 million when finished in this ultra-high-cost housing market.