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Affordable Housing News & Views - May 2017

Watch Our New Webinar: 9%/4% Structure

lWhen the disruption in the low-income housing tax credit equity market happened last November, many developers were left scrambling to fill funding gaps. State agencies began to think creatively about how they could help developers. California proposed a solution that many developers had not considered in the past which is to split a single project into two separate projects: one project is a conventionally financed 9% deal and the other project is a tax exempt financed deal. 
While this structure is not new and is employed by developers in several states that are primarily areas with high development costs, the structuring is not simple and there are challenges to be met and pitfalls to avoid. CohnReznick works closely with our developers as they coordinate the construction and operation of two separate legal entities. 
If this opportunity sounds intriguing, access our webinar in which Marshall Phillips, Nick Ratti, and Beth Mullen walk through the bifurcated 9%/4% Structure.

Access the webinar

Filtering the Noise: Capitol Connection by Bob Moss 

It has been over 100 days since the election, and all of us have been subjected to the cacophony of political noise on everything from foreign policy, to regulation changes, to new healthcare plans, and finally tax reform. We have heard about skinny budgets, defense spending, and infrastructure. Noise is defined as a sound that is especially loud or unpleasant, or that causes disturbance. Everyone has a type of noise that grinds their spine, as they say, and in this case it is probably the amount of noise, not the type, that is driving everyone crazy. 
But in this latest addition of Capitol Connection, Bob Moss, Principal and National Director of Governmental Affairs, says, “The fact is that, this spring, we actually have the “good noise” of great news for Affordable Housing coming out of Washington DC. Do we have challenges? Yes, there are plenty of challenges for Affordable Housing, but until the glass tips over, it is always half full.”

Read more

The Lobbyist Hit List (The Real Deal)

This article from The Real Deal takes a look at the industry’s biggest trade groups and influencers, who are descending on Washington with everything from tax reform to infrastructure to affordable housing on their agendas. Bob Moss, Principal and National Director of Governmental Affairs, contributes saying, “We’ve been invited in by the Ways and Means tax staff to start talking about financial models that would maintain the low-income housing tax credit production … should corporate rates be lower.”

Read full article

Mark your calendar. We hope to see you at these events.

CohnReznick Featured Events

16th Annual New Markets Tax Credit Summit - May 16-18: Miami Beach, FL

Annual Affordable Housing ConferenceSeptember 6-8: Las Vegas, NV
ULI Spring Meeting – May 1-4
CohnReznick Speaker: Beth Mullen
CohnReznick Speaker: Bob Moss
PHFA Housing Forum – May 11-12
CohnReznick Speakers: Daniel Levin and Bob Moss
CohnReznick Speaker: Regan St Pierre
CohnReznick Speakers: Bob Moss and Beth Mullen
CHAM Annual Conference – June 25-27
News stories and headlines from the previous month

National News

A lot of noise has come out of Washington, D.C., during President Trump’s first 100 days, including the potential for tax reform and a corporate rate reduction, which are causing a hiccup in low-income housing tax credit (LIHTC) equity pricing, and the proposed cuts to the Department of Housing and Urban Development (HUD) budget. Bob Moss, principal and national director of governmental affairs at CohnReznick, encouraged AHF Live Forum attendees to filter the noise and focus on the positive things happening across the nation for the industry. 
Once upon a time, Gary Gorman was an attorney, representing developers and syndicators.  There he was, seeing and touching the affordable housing business from up close. It was right there in front of him, but it still wasn’t close enough to suit him.  Deciding he’d “rather be a player than a referee,” Gorman launched his own affordable housing company in 1984. In the 33 years since its formation, Gorman & Co. has become one of the nation’s top affordable housing developers.  
Representative Maxine Waters (D-CA-43) reintroduced the Ending Homelessness Act of 2017, a comprehensive plan to ensure the lowest income people and families America have safe, decent, and affordable homes.  The “Ending Homelessness Act of 2017” would invest $13.27 billion over five years to address the shortage of affordable housing and to combat homelessness.  
Large, luxury apartment and condo developments have been dominating headlines and casting a big shadow over the “little guys” in rental housing. A new report released by Enterprise Community Partners and the University of Southern California’s Bedrosian Center on Governance aims to call attention to this overlooked segment of the market.  The Understanding the Small and Medium Multifamily (SMMF) Housing Stock report  emphasizes the formidable size of this segment of the market and its importance as a source of naturally occurring affordable rental housing. SMMF properties with two to 49 units account for more than half (54 percent) of all rental housing in the United States, according to the report. 
Local leaders vowed a fierce fight to protect the long-established Community Development Block Grant (CDBG) program.  They are taking their stand as the 43-year-old program, which is used by communities to create affordable housing and revitalize neighborhoods, is targeted for elimination under the Trump administration’s budget proposal.  
The video features Family Scholar House in Louisville, Kentucky, which provides homes for children with parents pursuing higher education; Hope Manor II in Chicago, which serves veterans; and Columbia Senior Residences in Decatur, Georgia, outside Atlanta. It also includes testimony from HUD Secretary Ben Carson, a statement from Senate Banking Committee Chair Mike Crapo, resident testimonials and interviews with experts from across the country.
Housing industry groups did not delay Wednesday in criticizing President Trump's tax reform outline, warning that by eliminating certain housing deductions and credits, the plan would crimp construction and sales.  The immediate resistance from the politically powerful housing sector is an indication of how hard it will be for Trump to shepherd legislation through Congress. 

© 2017 CohnReznick LLP

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.


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