Affordable Housing News & Views - September 2017

CohnReznick Insights

Health Care and Housing: CohnReznick’s Conference Recap

• “Innovative Models in Health and Housing” keynote: Dr. Josh Bamberger, Chief Medical Consultant for Mercy Housing and associate clinical professor for Family and Community Medicine at the University of California, San Francisco.
• “Health Care: Prioritizing and Balancing Needs” panel: Michelle Norris from National Church Residences, Ali Solis from Make Room and Meg Manley from McCormack Baron Salazar. Winell Belfonte, Partner at CohnReznick, moderated.
• “Health Care and Housing: Partners in our Future?” panel: Robin Hyerstay from Enterprise, Jo Ellen McNamara from United Health Care and Matthew Leber from LISC (Local Initiatives Support Corporation). Beth Mullen, partner and national director of affordable housing, moderated.
• “Health Care and Housing: Examples and Successes” panel: Debbie Thiele from Corporation for Supportive Housing, Brad Bridwell from Cloudbreak Communities and Michelle Norris from National Church Residences. Bob Moss, CohnReznick’s director of legislative affairs, moderated.
• “Funding Opportunities: HTCs, New Funds and Equity Sourcing” panel: Peter Sargent from MHIC (Massachusetts Housing Investment Corporation), Eric Klipfer from RBC and Joe Reilly from CDT (Community Development Trust). Nick Ratti, partner at CohnReznick, moderated.
• “Business Strategy: Succession and Continuity” panel: Bryan Shumway of Wish Rock was joined by CohnReznick’s Brian Newman (with expertise in the formation, operation and dissolution of partnerships, C-Corps, S-Corps and LLCs). Wendy Tillery, partner at CohnReznick, moderated.
• “Business Strategy: Organizational Chaos and Technology” panel: Howard Barash and Bhavesh Vhadani, both partners in CohnReznick Advisory practice, moderated.
 
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NOW AVAILABLE: CohnReznick’s Latest Performance Report on LIHTC Properties

From CohnReznick’s Tax Credit Investment Services Group, the latest performance study on tax credit properties has been released.The report surveyed the owners of properties financed with housing tax credit properties. By examining their 2016 portfolio of more than 22,000 properties, the surveyed portfolio reported, on a median basis, a 97.8% physical occupancy rate, 1.35 debt coverage ratio and more than $600 per unit per annum net cash flow. The cumulative foreclosure rate among housing credit properties continues to outperform all other real estate classes – reporting 0.71% foreclosure rate. This analysis is available now on our web site and the full data set will be released later in the fall with search and sorting capabilities. You can find the full report at the link below.

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Disaster Relief Assistance: Hurricane Impacts on Affordable Housing

Recorded after the impact of Hurricane Harvey and its severe and tragic impact on Texas, the topic of housing relief unfortunately is again top-of-mind for those with properties impacted by Hurricane Irma. Our thoughts and prayers are with those effected and we hope this recording helps provide some answers on how to help shelter those affected as well as how to approach repairing and rebuilding LIHTC properties. In this quick, 15-minute recorded presentation, Beth Mullen, CohnReznick’s Affordable Housing Industry Practice National Director, discusses how major disasters impact tax credit properties and explains IRS Procedure 2014-49 so owners can understand their options for relief, including carryover relief, recapture relief, and emergency housing relief for those who are interested in providing temporary housing. 

Please click here to access the recording. 

Additionally, for those of you that have damaged property impacted by disasters and casualties of all kinds, in particular from Hurricanes Irma and Harvey, please be advised that our valuation group might be able to help.

As claims for damaged or destroyed properties are placed with insurance companies, replacement value becomes a significant issue. Our valuation experts in this area can review the claim to make sure fair replacement values are met. Please contact Fernando Sosa (Fernando.Sosa@cohnReznick.com, 312-508-5443) for assistance.

Around the Community

We will be attending and/or speaking at these events. We hope to see you!

Wisconsin Housing and Economic Development Authority Annual Conference - September 12

The National Association of State and Local Equity Funds Annual Conference - September 13-15

Opportunity South Carolina 2017 Community Economic Development Conference by South Carolina Association for Community Economic Development - September 13-15

Connecticut Housing Coalition Annual Conference - September 26

Virginia Housing Alliance Housing Credit Conference - September 26-27

Institute for Responsible Housing Preservation Annual Conference - September 27-28

Preservation North Carolina Annual Conference - September 27-29

Housing Washington – October 2-4

Louisiana Association of Affordable Housing Providers Annual Conference – October 4

Georgia Affordable Housing Coalition Annual Half-Day Meeting – October 4

Affordable Housing Investors Council Fall Summit– October 4-5

Arlington Partnership for Affordable Housing – October 5

Governor’s Conference on Housing and Economic Development (NJ) – October 5-6

Housing Colorado Annual Conference – October 11-14

NCSHA Annual Conference– October 14-17

IPED’s Tax Credit Property Dispositions Conference – October 12-13

NHP Foundation 2017 Symposium & Dinner – October 17

National Leased Housing Association Fall Seminar– October 19-20

NDC Academy Conference – October 23-25

San Diego Housing Federation Annual Conference – October 25-26

Texas Association of Local Housing Finance Agencies – October 25-27

North Carolina Housing Works Conference – October 25-26

Citizen’s Housing and Planning Association (MA) Annual Dinner– October 26

NAHRO National Conference – October 27-29

In Case You Missed It...

News stories and headlines from the previous month 

National News

Help states solve their housing problems with the Affordable Housing Credit Improvement Act
Housing is the engine that drives America’s economy. Where you live impacts where you work, where your children can attend school, and the type of community that surrounds your family. For most of us, housing is our largest expense, and it determines nearly every other financial decision we make, including how much of our income we put away in savings and how much we’re able to reinvest into the economy.  

Roundtable: Experts Weigh in on Mixed-Income, Mixed-Tenant Housing
It’s not easy to spot new affordable housing. From the outside, the communities often look like market-rate developments or are even the best property on the block.  On the inside, however, there’s a lot going on. 

8 Million Reasons
Good heavens, the housing crisis for the nation’s poorest families keeps getting worse.  Here’s the latest: In 2015, 8.3 million households had worst-case needs, up from 7.72 million in 2013 and approaching the record high of 8.48 million in 2011, according to the Worst Case Housing Needs report released by the Department of Housing and Urban Development (HUD).  

Permanent Disaster Tax Relief Possible After Harvey’s Destruction 
There is some hope that permanent disaster relief tax provisions could be included in a tax reform package, and the push will likely build steam after the devastation of Hurricane Harvey.  Such a bill may also move separately from tax reform, which could increase its chances of passage as the larger overhaul effort is bogged down in the House and Senate. 

Will the Generation After the Millennials Buy Homes?
A lot has been made of millennials’ home buying tendencies (or lack thereof) in recent years, but it’s not too early to discuss what to expect from the next generation, too. GlobeSt.com staffer Carrie Rosenfeld recently spoke with First American Financial Corp. chief economist Mark Fleming about the next generation of home buyers.

For Cap Rates, Expect More of the Same
There was limited movement in cap rates for U.S. commercial real estate in the first half of 2017, according to Spencer Levy, senior economic adviser and head of Americas research at CBRE. The company’s latest North America Cap Rate Survey also shows that the general outlook for cap rates and returns in the year’s second half is for stable pricing.

AHF Showcases Industry’s Rising Stars
Affordable Housing Finance is recognizing six individuals 40 and younger who are playing vital roles in the creation and preservation of affordable housing across the nation.  This year’s Young Leaders include developers, a low-income housing tax credit (LIHTC) syndicator, an attorney, and a consultant working with American Indian tribes to create or preserve affordable housing. 

Is Anybody Home at HUD?
In mid-May, Steve Preston, who served as the secretary of Housing and Urban Development in the final two years of the George W. Bush administration, organized a dinner at the Metropolitan Club in Washington, D.C., for the new chief of that department, Ben Carson, and five other former secretaries whose joint tenure stretched all the way back to Gerald Ford. It was an event with no recent precedent within the department, and it had the distinct feel of an intervention. HUD has long been something of an overlooked stepchild within the federal government. 

Future Will Necessitate Prefab Construction, Tech Pros Say
Thinking about the future of how we live may conjure Jetson-like ideas and smart homes that know what you need and when you need it.  Some of those high-tech features are already going into homes, some as after-market options and some as part of the builder's or developer's design.  But technology is constantly improving, consumers’ expectations are changing, and residents' demands for technology are becoming more urgent. As a result, current tech at some point, perhaps soon, will no longer be able to meet the demand.  

Report: More Households Renting Than at Any Point in 50 Years
Nearly 10 years out, the Great Recession's effects can still be felt in households around the country, perhaps especially in renter households, which are at their greatest number since 1965, notes the Pew Research Center.  The total number of households in the United States grew by 7.6 million between 2006 and 2016. But over the same period, the number of households headed by owners remained relatively flat, in part because of the lingering effects of the housing crisis.  

NOAH: The New Housing Acronym You Need to Know
Currently, more than 11 million renter households spend at least half of their income on housing. And, according to the latest The State of the Nation’s Housing report by the Joint Center for Housing Studies of Harvard University, the number of rental units in the US that are available at the lowest rents is rapidly declining. As a result, the affordable housing crisis shows no sign of diminishing, as the number of low-income renters far exceeds the number of available affordable units. 

Census: Apartment Construction to Peak This Year
Real estate investment firm HomeUnion takes a look at a new residential construction report from the U.S. Census Bureau that offers a mixed outlook on the supply side of the housing market.  With housing starts down from June of this year and July of 2016, the firm's experts say this could be a sign the peak of this construction cycle is on the horizon:  In July, builders broke ground on 1.2 million homes, 5.6 percent lower than one year ago. 

Hunt Acquires Stake in Pennrose Properties
Hunt Cos. has closed on an agreement to acquire a minority interest in Pennrose Properties, one of the nation's largest owners and developers of affordable housing.  As part of this transaction, Hunt will secure a long-term interest in Pennrose’s future development activities while Pennrose assumes responsibility and oversight for a substantial portfolio of projects in Hunt’s pipeline. Terms of the deal were not released.  

What 53 New Markets Tax Credit Projects Say About the Treasury Program

The U.S. Treasury Department announced last week that it had received 230 applications for this year’s round of New Markets Tax Credit (NMTC) allocations. Add up what those applicants are seeking to support community development in low-income areas, and you get $16.2 billion — more than four times the $3.5 billion in NMTCs available. 

Houston's Road to Recovery
As the mighty floodwaters recede, Houston and other parts of hard-hit Texas begin the slow, grim task of recovering from Hurricane Harvey. The storm devastated the state, sending approximately 34,500 evacuees into shelters, destroying more than 6,000 single-family homes, and damaging another 82,422. Affordable housing developments were not immune from Harvey’s wrath.

Country Music’s Rising Star Kane Brown Raises Awareness Of The 25 Million Americans Struggling To Make Rent
Kane Brown is partnering with Make Room Inc. to shine a spotlight on the critical issue of struggling renters in America. On Tuesday, September 12, the country music newcomer will participate in a congressional briefing at the Hart Building on Capitol Hill in Washington, D.C.  The goal of the briefing is to expose the human suffering and societal costs the rental housing crisis, reinforce the importance of placing affordable rental housing on the national agenda, and advocate for bold solutions that will end housing insecurity. Members of Congress, staff, and impacted families will also participate in the briefing.  

Worst-Case Housing Needs Increase
The number of very poor unsubsidized families struggling to pay their monthly rent and who may also be living in substandard housing increased between 2013 and 2015, according to a new report released by the Department of Housing and Urban Development (HUD).  In 2015, 8.3 million households had worst-case needs, up from 7.72 million in 2013 and approaching the record high of 8.48 million in 2011. 

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