David A. Smith Author Archives

Young singles have plenty of personal, economic, and social mobility; they have minimal cash assets (and possibly maximal student-loan liabilities); they want to live somewhere close to work and pay as little cash for it as they can. Their needs beautifully complement what the elderly homeowners have, and what they have is what the elderly need.

Culturally, Mexico begins just south of Tucson, where the Interstate signs are in Spanish and the distances are in kilometers.

For want of a database, a valuable inventory is being lost.

Among investment tax credits for real estate projects, the historic rehabilitation credit is a multiple anomaly. It is the oldest (enacted 1976); not capped and allocated but available as-of-right; payable at once on completion; and justified by physical heritage, not by reference to use.

RAD, the public housing Rental Assistance Demonstration is in jeopardy of stalling for want of a simple legislative fix: Passage by Congress of a bill raising the current cap of 60,000 units to at least 185,000, or, better yet, eliminating the cap entirely.

Amazon, Google, and the NSA know more about your residents than your property manager does – and are collecting more information about them continuously.

In nearly four decades in this business, I have never believed in the logic structure underlying traditional market studies, because they have their causality backwards. And (confession time) I have never used one to make a decision, because a much better means of testing the market is readily available.

Do you want to be an affordable housing investment banker, a titan of structured finance making a market in low-income housing tax credits? You are ready to spend hours upon end laboriously gathering minute financial information on a proposed property; analyzing its risks in painstaking detail; performing two-dimensional scenario sensitivity analysis; and then surfacing and innovatively managing transaction, operational, and counterparty risks.

At the recent presentation by the National Affordable Housing Management Association of its Community of Quality awards, all five winners were preservation: two 42-year-old Section 236s undergoing rehab; a new-construction rising like a phoenix from razed public housing; a 1928 hotel on its second renovation (1995 and 2013); and the turnaround of a drug-infested eyesore. Among them, virtually everything that we normally consider a property attribute was changed.

In 1900, if you lived in a New York tenement, your bedroom was usually right below that of your upstairs neighbor. When he removed his heavy shoes late at night, you’d hear the two muffled thumps clearly through your ceiling – first one, then the second. Any delay between thumps might keep you awake, wondering what had happened above you.

Stuffed into the Dodd-Frank legislation, the tangible manifestation of the witch hunt after the subprime collapse, is a provision, the long-awaited and long-delayed Volcker Rule that put the entire LIHTC business at risk. Hauled out of retirement to chair President Obama’s task force, former Federal Reserve Chair Paul Volcker believed America’s housing bubble was caused by financial sin: nefarious investment banks subverted wholesome commercial banks, taking consumers’ deposits and used them to concoct toxic assets flipped for fast bucks.

Unlike my peers, I do not age. Yet my contemporaries, seen last month at AHF Live in Chicago, look so old. I asked a long-time colleague if I were imagining things.