Affordable Housing Finance

GRAPEVINE

Reading Between the Numbers

AFFORDABLE HOUSING FINANCE • April/May 2010

BY CHRISTINE SERLIN

The numbers tallied from AFFORDABLE HOUSING FINANCE’s exclusive rankings of the Top 50 owners and developers for the April/ May issue tell a good portion of the story that was 2009: Not as many deals got done.

Out of this year’s 54 ranked developers (there were four ties), the number of affordable units started last year fell by nearly 29 percent from the 2008 numbers, which had dropped 23 percent from the number of units started in 2007. The average number of units started by these developers dropped to 309 from 2008’s 469.

Completions for 2009 also fell about 5 percent, with the Top 50 developers delivering 20,382 units compared with 2008’s 21,385 units. This still is an improvement over the 17 percent drop that we saw in the year-over-year numbers for 2008.

But the surveys that developers submitted for the AHF 50 rankings show they are hopeful that they’ve already seen the worst and can rebound in 2010 with improved numbers. The ranked developers plan to start as many as 27,551 affordable units in 2010, which would be an astounding 65 percent boost over 2009.

Many deals are breaking ground this spring because of Tax Credit Assistance Program and credit exchange program funding from the American Recovery and Reinvestment Act of 2009. Forty of the 54 ranked developers received these stimulus funds for 155 affordable developments.

The surveys also reveal the strategies that many of the affordable housing owners and developers put in place to keep afloat and, in some cases, even grow their businesses.

Plymouth, Minn.-based Dominium Development & Acquisition, LLC (see cover story on page 30), which ranks No. 10 on the list of top owners and No. 42 on the list of top developers, has really stuck to its core of affordable housing over its 38-year history. During the downturn, it has continued to grow by taking over distressed assets.

Volunteers of America, No. 4 owner and No. 15 developer, also has an interesting story. Because the national faithbased nonprofit has cut back on its number of low-income housing tax credit (LIHTC) projects, it has shifted staff over from LIHTC development to work on refinancing and repairing its existing portfolio projects. It also is looking at several opportunities involving acquisitions of general partner interests rather than fee simple purchases of properties.

Westerville, Ohio-based The Woda Group—No. 43 on the owners list and No. 12 on the developers list—also is working the downturn to its advantage. With land prices coming down, it has experienced growth because it has been able to purchase sites that previously would not have been available for affordable housing.

Regardless of what the numbers show, the affordable housing industry has been mostly resilient and creative in keeping their businesses humming, getting projects done, and preparing for some better years ahead.