Affordable Housing Finance

GRAPEVINE

A Hint of Year-End Optimism

AFFORDABLE HOUSING FINANCE • November/December 2009

BY CHRISTINE SERLIN

As this challenging year for the affordable housing industry comes to a close, it seems to me that there’s a case of cautious optimism going around. Maybe it’s just that people feel that we’ve hit bottom and conditions can only improve from here on out, or maybe people are just tired of focusing on the negative and are ready for the year to finally be over.

The positive tone was in the air at this year’s AHF Live: The Affordable Housing Developers’ Summit, the annual event from AFFORDABLE HOUSING FINANCE, in Chicago at the end of October.

The encouraging news started with the magazine’s Editorial Advisory Board Roundtable. David Reznick, founder and chairman of the board of Reznick Group, referred to a USA Today article about the nation’s job outlook turning positive and that more companies plan to add new employees in the next six months rather than cutting positions. “As people get jobs back, that is key,” he said.

The keynote address by Carol Galante, the Department of Housing and Urban Development’s (HUD) deputy assistant secretary for multifamily housing, also focused on the positive changes happening at HUD that will benefit the affordable housing industry.

But even with the various degrees of optimism out there, 2010 is still going to be a challenging year.

In this issue of AFFORDABLE HOUSING FINANCE, we’re providing our annual outlooks to help you prepare for those challenges still to come.

The Capital Markets Outlook, starting on page 20, highlights the good and the bad for 2010. The outlook provides a look at what you can expect from Fannie Mae, Freddie Mac, and the Federal Housing Administration, as well as what’s ahead for construction financing, bond financing, and underwriting.

Our tax credit equity outlook looks at a new study by Ernst & Young, LLP, commissioned for Enterprise Community Partners, Inc., and Local Initiatives Support Corp., which says an additional $5 billion in low-income housing tax credit (LIHTC) equity could flow into the market through 2011 if Congress enacts a five-year carryback proposal.

And our annual guide on LIHTC programs, starting on page 26, highlights some of the important news coming out of the states on their qualified allocation plans, Tax Credit Assistance Program and credit exchange updates, estimated 2010 authority, and application deadlines.

Let’s also end the year with some more optimism. The industry consensus on action to bring investors back into the LIHTC market continues to pick up supporters and to make headway on the federal front. Don’t stand on the sidelines, do your part. Support the consensus at www. rentalhousingaction.org, share your stories about the importance of affordable housing, and contact your local legislators to urge them to contact House Ways & Means Committee Chairman Charles Rangel or Senate Finance Committee Chairman Max Baucus in support of these LIHTC proposals.