NEWS HEADLINES
Q
& A with Beth Stohr
By Donna Kimura Low-income
housing tax credit investors gathered recently at the Affordable Housing Investors
Council (AHIC) summer meeting. AFFORDABLE HOUSING FINANCE caught up with Beth
Stohr, AHIC president, after the gathering. Stohr is president of the U.S. Bank
Community Development Corp. Q: What was the mood at the AHIC meeting? A:
There are a lot of questions, a bit of caution, and a bit of uncertainty as to
what's going to happen. Q: What were some of the issues being discussed
by investors? A: The major issue is sustainability-sustainability
at all levels. In order for the "mission" of the housing to work, the
economics have to work for all parties to the transaction. Clearly, investors
are concerned about investing in sustainable projects with sustainable developers
and sustainable sponsors. And clearly the lack of stability in the investor market
is driving discussion these days. Q: A big issue is the decline in capital
for projects this year. What are your thoughts going into the second half of the
year and into 2009? A: Let's start on a positive note. A number
of existing investors have increased their investment goals and are actively closing
transactions this year either on a direct basis or through syndicators. But more
investors are needed to bridge the gap in equity. There is some hope that
there are investors, maybe more economic-driven prior investors, who are on the
sidelines and will come back at the end of the year. My sense is that those investors
are not going to be enough to make up for the gap in the equity in the short run.
And, if an investor is new to the product class, there is a long lead time vetting
things inside of a corporation before you get to the point of signing investment
documents. Higher yields will help attract folks and get them to at least look,
but I think the actual investment execution will take a while. But back
to the positive. The LIHTC program has been incredibly successful because a lot
of folks work constantly to keep it that way. The industry is working in unison
to rectify this situation on a number of fronts. The market will stabilize, and
the bonus could be that we all end up in a better place. Q: What is AHIC
is working on now? A: As always, we are working to keep investors
informed and educated about LIHTCs. We are doing a lot more outreach to new investors
to help them deal with questions raised inside their companies pertaining to evaluation
metrics and accounting. We continue to look at underwriting guidelines at the
project level as well as sustainability at all levels of the LIHTC continuum.
-Donna Kimura
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