Affordable housing executives focused on the challenges and opportunities coming down the road for the industry at the annual AHF Live conference in Chicago.
Weighing heavy on the minds of the industry is the Government Accountability Office’s (GAO’s) review of the low-income housing tax credit (LIHTC) program that is expected out in late spring or summer 2016.
“One of the biggest concerns I have for next year is the GAO report that will come out on cost per unit and how we will create a message around that report,” said Bob Moss, principal and national director of governmental affairs for CohnReznick. “To members of Congress, affordable housing means affordable to rent and affordable to build. We have some work to do in that area.”
Moss, who said he also expects tax reform to happen in 2017, encouraged the audience to continue advocacy work for the LIHTC program by getting legislators out to grand openings to see the developments and residents in person. “Seeing is believing,” he said. “I think that’s our biggest opportunity.”
Bryan Zises, acting executive director of the Illinois Housing Development Authority, agreed and cautioned the audience to not take the report lightly. “I want to remind everyone that the HOME program came under attack because of one newspaper article light on facts,” he warned. “It’s perception that trumps reality.”
Another major public conversation will be focused on where affordable housing investments should be made based on the recent Supreme Court disparate impact ruling and the Department of Housing and Urban Development’s (HUD’s) Affirmatively Furthering Fair Housing Rule.
Sean Thomas, chief of staff of the Ohio Housing Finance Agency, said how states will implement the guidance coming forward on fair housing is high on his radar and will be a challenge.
Developer Ava Goldman, president of The Michaels Development Co., agreed, saying she expects that disparate impact and the focus of developing affordable housing in high-opportunity areas will have a huge effect on the industry. “This is going to change our entire business model.”
Bart Mitchell, president and CEO of The Community Builders, cautioned for a balanced approach. “I’m a big believer in a balanced approach about the absolute evidence that is available for the value of place-based investments in lower-income neighborhoods creating better quality housing and neighborhood opportunity, but also a balanced approach that really does create more investments for affordable housing opportunities for low-income families in high-opportunity urban and suburban neighborhoods,” he said.
With the challenges ahead, Beth Stohr, director of new production, affordable housing tax credit investments, at U.S. Bancorp Community Development Corp., reminded the audience that since the challenges are known, there’s an opportunity to get cohesion as an industry and “get our act together around some best practices, including developing those in QAPs (qualified allocation plans) and around other specific aspects, such as costs.”
During the power panel discussion, several opportunities for the industry also were raised.
With the housing insecurity crisis continuing to grow, Rick Lazio, partner and head of the affordable housing and housing finance practice at law firm Jones Walker, said it’s a positive sign that he is seeing an increase in awareness about the nation’s affordability crisis and more focus on rental housing.
Pat Sheridan, executive vice president of housing at nonprofit Volunteers of America, agreed. “It’s starting to finally creep into the public consciousness, and hopefully we can build on that to get additional resources.”
Workforce housing also was cited as a “challenging opportunity.”
“There’s a huge opportunity across the country for workforce housing,” said Mark Dean, national production manager at Citi Community Capital. “It’s capital challenged, and it’s going to take creative minds from those developers and financiers in order to make it work.”
Charles Werhane, president and CEO of Enterprise Community Investment, said there’s a lot of capital in the market, and the industry needs to get some of that channeled to workforce housing. “There’s another layer of individuals out there that needs help for their families,” he said.
The aging population also is another demographic on the industry’s radar.
“With the demographics really starting to change, we see a lot of opportunity on that front,” said Michael Costa, president and CEO of Highridge Costa Housing Partners.
Sheridan said the industry needs to find ways to mobilize this population to be more vocal in talking with their representatives and senators about their housing needs. “It’s a tsunami of seniors who are going to be out there that need housing, and I think there’s an opportunity there for justification for increasing the amount of allocations of tax credits.”
Ronne Thielen, executive vice president at R4 Capital, added that the affordable housing industry should bring AARP into the seniors housing discussion since the nonprofit organization has more than 37 million members.
Also presenting potential opportunities for the industry in the new year will the National Housing Trust Fund, which will be funded for the first time in 2016, and the National Disaster Relief Bill.
Thomas said after Jan. 1 HUD will release a NOFA with actual funds for each state, and the state agencies administering those funds will be conducting their planning processes around March and April. “Get your voice heard on how to use that money and direct it for gap financing and to aid tax credit properties,” he said.
Goldman said she hopes the National Disaster Relief Bill, which would provide a special automatic allocation for any community that is declared a national disaster area, similar to the GO Zone credits allocated in the Gulf Coast states in the wake of Hurricane Katrina, will be passed in the coming year. “Think about it—what could have more bipartisan support because Mother Nature does not know a red state from a blue state,” she added.