L.A.'s $5 Billion Housing Plan

Los Angeles Mayor Antonio Villaraigosa unveiled a $5 billion housing plan that calls for the building of 20,000 affordable housing units in his city.

“This city’s economic success and vitality depend on our ability to plan for a future of sustainability and stability in our housing market,” Villaraigosa said in a written statement. “This plan lays the building blocks of housing our middle class can afford and takes the first steps toward building ‘housing that works’ for all Angelenos.”

The five-year plan calls for the city to leverage $1 billion in public funds into a $5 billion investment in affordable housing. The effort builds on a $700 million investment from Enterprise Community Partners. Using the funding from this capital campaign, the plan pledges to build and preserve 20,000 affordable homes. The plan includes implementing a mixed-income housing ordinance that requires the city’s largest developers to offer units at prices that the city’s workforce can afford.

The “Housing That Works” initiative will also create 20 sustainable transit communities focusing new development along public transit corridors and close to job centers.

The plan also attempts to address homelessness and the foreclosure crisis. Villaraigosa said the initiative funds 2,200 permanent supportive housing units – where homeless men and women are connected to social services – and expands Sec. 8 voucher programs for the chronically homeless. The proposal also aims to preserve the affordability of 14,000 rental units and educate residents about their rights as landlords and tenants.

Arizona Announces Latest Housing Efforts

Arizona Gov. Janet Napolitano recently announced that the Arizona Department of Housing will receive more than $38 million from the federal Department of Housing and Urban Development (HUD) to help Arizona communities deal with the effects of foreclosure. Governments around Arizona will receive more than $121 million from the allocation announced by HUD under the Housing and Economic Recovery Act of 2008.

The neighborhood stabilization funds aim to help localities and nonprofits obtain foreclosed housing, rehabilitate that housing, and make it available to homebuyers.

Arizona leaders said the federal funding comes on top of actions the state has taken to address the housing problems. In early September, Napolitano announced "Housing Arizona," a $13.6 million initiative designed to help Arizona families and communities hard hit by the economy. The initiative strengthens state foreclosure prevention programs, provides help to first-time homebuyers, and fights homelessness.

Senators urge HUD to help Maine's PHAs

U.S. Senators Olympia Snowe and Susan Collins have asked the Department of Housing and Urban Development (HUD) to look for additional resources to assist Maine's public housing authorities that are struggling with rising energy costs.

"This is a critical issue," said the senators in a Sept. 18 letter to HUD Secretary Steven Preston. "Maine's public housing authorities are near the financial breaking point. With some agencies spending as much on heating oil as they had budgeted, many are left with huge shortfalls."

They cited the troubles faced by several agencies in their state. According to the senators, the Bangor Housing Authority is allotted $2.36 per gallon for heating oil and has spent $4.16 per gallon. The agency uses 300,000 gallons per year for their 563 units, leaving a $450,000 hole in its budget.

Other agencies have faced electric rates that have gone up 15 percent in June, and some landlords have indicated that they will stop accepting HUD voucher tenants because they cannot recoup all of their expenses, said the letter.

"We urge HUD to take immediate action to help cold-weather states, like Maine, during this time of record-high home heating costs," said the senators. "Given the crisis, we encourage HUD to examine any additional resources within the agency that may be available to assist Maine."

CTCAC Looks At Distributing Additional Tax Credits

The California Tax Credit Allocation Committee has issued a memo on how it plans to distribute an additional $7.3 million in low-income housing tax credits that it will receive this year as a result of the Housing and Economic Recovery Act of 2008.

In its proposal, the Committee said it plans to make the credits available to pending second-round applicants for 9 percent credits "by cascading the additional credits through the various set-asides and geographic apportionments."

A memo is posted on the Committee's Web site at www.treasurer.ca.gov/ctcac/.

Sweeping Housing Bill Passed

The low-income housing tax credit (LIHTC) program is about to undergo its most significant changes in years following the passage of the Housing and Economic Recovery Act of 2008.

President Bush signed the far-reaching bill Wednesday, authorizing a set of key modifications to the tax credit. The act also increases oversight of Fannie Mae and Freddie Mac, establishes an affordable housing trust fund, updates the Federal Housing Administration’s multifamily programs, and provides nearly $4 billion in funds for the redevelopment of abandoned and foreclosed homes.

Key LIHTC and tax-exempt bond provisions include:
• Increasing the LIHTC credit ceiling for 2008 and 2009 by 20 cents, or 10 percent;
• Increasing the tax-exempt bond ceiling by $11 billion nationally;
• Repealing a requirement that a bond be posted upon the disposition of a housing credit building or interest in order to avoid recapture;
• Providing permanent alternative minimum tax relief for housing tax credits and bonds;
• Adopting a credit percentage that “shall not be less than” 9 percent through 2013 for new construction and rehabilitation projects that are not financed by tax-exempt bonds.

The Act also creates a new federal regulator for Fannie Mae and Freddie Mac, called the Federal Housing Finance Agency, which will regulate both the capital requirements and affordable housing goals of the government-sponsored enterprises (GSEs). The new legislation effectively abolishes the Office of Federal Housing Enterprise Oversight and takes the task of monitoring the affordable housing goal away from HUD. The Act also gives the Treasury Department temporary authority to extend the GSEs’ lines of credit and to take an equity stake in the companies if needed.

A key provision of the Act concerns the creation of the National Affordable Housing Trust Fund, which is expected to raise about $600 million annually. The trust fund, a dedicated source of financing for affordable housing production not subject to the annual appropriations process, will be seeded by Fannie Mae and Freddie Mac.

Seventy-five percent of the fund would be used for rental housing serving people with incomes below 30 percent of the area median income (AMI), and another 15 percent would go toward rental housing serving those with incomes below 50 percent of the AMI. The remaining 10 percent would go toward homeownership.

The act also modernizes some Federal Housing Administration (FHA) multifamily programs, streamlining the review process, asset management requirements, and subsidy layering requirements for FHA-insured developments using low-income housing tax credits.

The legislation also provides nearly $4 billion in “emergency funding”—effectively Community Development Block Grant funds—for the redevelopment of abandoned and foreclosed homes and residential properties.

Presidential candidates John McCain (R-Ariz.) and Barack Obama (D-Ill.) did not vote on the bill when it went before the Senate on July 26.

Fannie Mae Comments on LIHTCs

Fannie Mae leaders said they will look closely at the Housing and Economic Recovery Act of 2008, which was passed by the Senate on Saturday and awaiting President Bush’s signature, to see what the legislation means for their low-income housing tax credit (LIHTC) investing business.

The bill includes several key changes to the LIHTC program, including increasing the state housing credit ceiling by 20 cents in 2008 and 2009. It also repeals alternative minimum tax limitations on tax credits ands tax-exempt housing bonds.

Many in the LIHTC industry hope that the legislation will provide incentives for Fannie Mae and other investors to return to the market. Ken Bacon, executive vice president at Fannie Mae, cited the AMT changes as an area that he wants to review.

He, however, added that Fannie Mae’s participation “will be a function of the overall earnings of the company. I really can’t make any forward-leaning commitments one way or the other.”

Fannie Mae, which has been one of the nation’s largest LIHTC investors in past years,
invested $10 million in the tax credits in the first half of 2008, a sharp drop from the $620.5 million it invested in the first half of 2007.

Bacon pointed out that the firm continues to do a lot for low-income housing through their debt products. Fannie Mae reported $617 million in financing for rent-restricted housing for households earning no more than 60 percent of the area median income in the first half of the year.

Officials also said that they remain interested in LIHTCs and will continue to evaluate possible investments.

Developer Dedicates Largest Solar Installation

EAH Housing has announced the largest affordable housing solar installation in the country at Crescent Park in Richmond, Calif.,

The nonprofit housing developer said solar power will serve 24 buildings and 378 family apartments in the development that is undergoing a $70 million restoration, including the projected 908-megawatt solar installation. A dedication cermony was held this week.

The solar installation is a $7 million package managed and installed by Sun Light & Power.

EAH acquired Crescent Park in 1994. Funding sources for the rehab include Union Bank: National Equity Fund, Inc.; and California Solar Initiatives rebates.