The news continues to be bleak, and signs of the economic downturn on the affordable housing industry are evident in AFFORDABLE HOUSING FINANCE's exclusive rankings of the Top 50 owners and developers.
Out of this year's ranked developers, the number of affordable units started in 2008 is a 23 percent drop from the number of units started in 2007 by last year's group of ranked firms.
Completions for 2008 also fell by roughly 17 percent, with the Top 50 developers delivering 21,385 affordable homes.
And 30 percent of the nearly 100 developers responding to our survey reported that they would be reducing or slowing their pipelines of new projects or acquisitions because of the lack of low-income housing tax credit (LIHTC) capital.
Many in the industry are hoping the stimulus package will jumpstart the LIHTC market and are happy to see the addition of gap financing, but the industry isn't satisfied. Many hoped that it would include a carryback that would attract investors.
But despite the grim news, there have been some brighter spots in recent days and weeks.
The staffing at the Department of Housing and Urban Development (HUD) has started to come together, and these picks are likely to have positive effects on the industry.
Longtime affordable housing developer Carol Galante, who has been CEO of BRIDGE Housing since 1996, has been tapped to head HUD's multifamily programs and knows firsthand what affordable housing developers are facing.
“I've tried to close mixed-finance developments myself at BRIDGE, and I recognize that HUD needs to change to do its part in operating in the tax credit world. I think there is a lot of crosspollination that needs to go on between HUD and the Treasury on the tax credit program,” she said in a recent interview with an editor from Hanley Wood, publisher of AFFORDABLE HOUSING FINANCE.
Some of the other HUD leadership selections also bode well with their affordable housing experience. Peter Kovar is the nominee for assistant secretary for congressional and intergovernmental affairs, and he has been the chief of staff for Rep. Barney Frank (D-Mass.). Fred Karnas, former director of the Arizona Department of Housing, has also been tapped as senior adviser to Secretary Shaun Donovan.
And there's good news coming out of the White House. President Obama's outline of the fiscal 2010 budget provides more funding for federal housing programs, including $1 billion for the national Affordable Housing Trust Fund. Overall discretionary HUD funding would also be up about $6 billion.
But one of my favorite bright spots is the perseverance of Sister Lillian Murphy of Mercy Housing. She should be an inspiration to all owners and developers. She understands the dire need and thinks big. Mercy plans to participate in 65,000 units in the next five years.
“It's a big goal, but the problem is big,” she said.
