Developer Jim Sari, CEO of The Landmark Group in Winston-Salem, N.C., offered several pointers for winning low-income housing tax credits (LIHTCs).
“It’s statistical analysis,” he said. “I look at QAPs (qualified allocation plans) over a three- or five-year span. I look at what scores have won when I can get that information, where are the deals, and what types. You get a feel for it by examining the data.” Sari said he also likes to do a “grassroots” market study to find the right population. One of his general rules of thumb calls for him to work in towns of 5,000 people or more in rural North Carolina and some other states. “You can do about 10 units per 1,000, if it’s not saturated,” he said. “If you’re in a town of 5,000 or 6,000, you can get away with a 40- or 50-unit deal,” Sari said.
This rate likely won’t pencil out in many areas such as California, but it works in some Southeastern markets, he said. Sari was one of the speakers at a panel that examined LIHTC allocations. It was moderated by Bob Moss of Boston Capital.
Developer J. David Heller of The NRP Group discussed LIHTC pricing, saying that a year ago he was seeing deals get north of a $1 for a dollar’s worth of tax credit in many markets. As recently as three months ago, the price was in the mid-90 cents range. It has recently fallen to the low 90s.
“Some syndicators have said to us don’t pencil your deals north of 90,” Heller said.
Catherine Racer of the Massachusetts Department of Housing & Community Development, Holly Glauser-Abel of the Pennsylvania Housing Finance Agency, Mark Shelburne of the North Carolina Housing Finance Agency, and Jeanne Peterson of the Reznick Group discussed key allocation issues, including targeting special-needs populations and deep targeting of LIHTC properties.