David A. Smith Author Archives

If you own an income-producing property, you have an equity partner hiding in plain sight.  Despite never signing a document with you, your municipality owns somewhere between one-eighth and one-quarter of your property’s economics, a slice it can increase without your consent, and will own longer than you’ll own the property. 

Three and a half years after it began with the best of intentions, state-level programs and laws intended to help residents avoid eviction have cost many of the country’s largest, best and most ethical affordable housing owners upwards of half a billion dollars – and the total keeps rising. 

As shown in last month’s Part 1, the economically botched management of the 2020-2021 COVID pandemic precipitated the inevitable return of inflation. Though the household damage was palliated by enormous federal spending across two administrations, that cumulative largesse has now assured us that we will worry about inflation and deal with its consequences for at least the rest of the decade.

Inflation is not a single force but a swarm of costs that appears in scouts and attacks from all directions.

Four years after the response to COVID-19 emptied downtown high-rise office buildings of workers, leaving some towers furnished shells empty of life or commerce, why hasn’t the prophesied breakthrough of office-to-residential conversions appeared?   

Are you an affordable housing developer in search of a local building permit and feeling helpless as popup financial exactions materialize as fast as you vanquish the previous ones? Now there’s one weird trick you can use to get relief: say “sheetz.”

Names can outlive their purpose and their original meaning. Though the Holy Roman Empire was neither holy, nor Roman, nor an empire, a cluster of mutually distrustful principalities with a largely symbolic head of state known as the Holy Roman Emperor maneuvered under that rubric for a thousand years after its 800 AD founding by Charlemagne before it was put to sleep by the 1815 Congress of Vienna. Such may yet be the fate of two venerable concepts, Fair Market Rent (FMR) and the Area Median Income (AMI). 

Those who say you can’t put a price on virtue have never worked in the capital markets. Although people say they value many things, what they actually pay for is what they truly value. Increasingly, that is virtue, or the appearance of virtue, now manifesting itself in the availability, terms, security and risk-adjusted yield of debt or equity instruments.

In 1998, when North Carolina Democrat-turned-Republican Lauch Faircloth added the amendment for which he became infamous, the Department of Housing and Urban Development and Public Housing Authorities (PHAs) were in a protracted bureaucratic standoff combining the worst features of medieval sieges and the First World War.   

With all the time that affordable housing property managers spend scrutinizing resident households’ income, owners and managers who want to avoid the quicksand of eviction should invest similar insight into understanding households’ expenses.

What’s a big-city mayor facing an affordable housing crisis to do? 

Across America, the anti-exclusionary zoning rebellion is in full swing, and like many localized revolutions, it takes revolutionary thinking – like rediscovering the asset class that built 19th-century urban America, which over the last 50 years has become a capital backwater: the family storefront dwelling.