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The provisions of the recent 2008 and 2009 HUD Consolidated Appropriations Acts (P.L. 110-161, P.L. 110-329), and the Housing and Economic Recovery Act of 2008 (HERA; P.L. 110-289), will affect the preservation and development of affordable housing, as well as HUD's administrative policies, warns attorney Michael Reardon, a partner in the Washington law firm of Nixon Peabody LLP.
These provisions relate to:
Section 213's (formerly Section 318) transfers of assistance contracts and use restrictions;
Since June 2008, tax credit prices nationwide have fallen almost 5 cents per 10-year tax credit dollar. As of Oct. 1, 2008, tax credit prices are in the range of 75 to 82 cents per dollar. This figure represents a steep decline in value from a year ago, when prices were in the range of 90 to 95 cents per dollar.
There are a number of reasons for the decrease in equity, including reduced demand by investors who are seeking higher yield investments, says affordable housing consultant A.J. Johnson, an expert in the low-income housing tax credit (LIHTC) program.
The Housing and Economic Recovery Act of 2008 (H.R. 3221), which generally applies to buildings with placed-in-service (PIS) dates occurring after July 30, 2008, is expected to provide a boost to developers, says Glenn A. Graff, an Illinois attorney with Applegate & Thorne-Thomsen, PC, in Chicago.
One of the main reasons for the boost is the provision that sets the minimum credit percentage at 9 percent for both new construction and non-federally subsidized major rehabs.
Two major government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, announced recently that they are not making new tax credit investments. Together, these GSEs accounted for approximately 40 percent of tax credit investment annually for the past decade or so.
A lower price for tax credits has been the main effect of reduced GSE participation. The price for tax a credit in 2007 averaged approximately 93 cents, and that number is likely to drop below 84 cents in 2008, according to Affordable Housing Finance magazine.
In August, the manager of a tax credit site in Newark, N.J., reported that during this past summer, residents have suffered an increase in criminal activity that has been unusual even for inner-city housing projects. For example, as reported in the New York Post on August 6, four teenage students who were listening to music in a parking lot not far from a local housing project were shot by a group of armed thugs.
In February, the D.C. Court of Appeals dealt the D.C. Housing Authority (DCHA) and its residents a setback. The court's decision in Pratt v. District of Columbia Housing Authority put a dent in DCHA's efforts to have local D.C. law support HUD's “One-Strike” policy. The One-Strike law, which permits owners to evict assisted housing residents for lease violations involving criminal activity, applies to Section 8 (Housing Choice Voucher) and Section 9 (safe public housing) residents, says Margaret McFarland, former general counsel to DCHA.
HUD is seeking comments from owners and managers about its Enterprise Income Verification (EIV) System. Specifically, HUD would like to hear about the experiences of owners and managers in seeking and gaining access to the EIV System and in using various multifamily applications and reports contained within the EIV System.
Sending comments to HUD. Owners and managers wishing to submit comments about EIV should email their comments to: MF_EIV_Comments@hud.gov.
In February, the D.C. Court of Appeals dealt the D.C. Housing Authority (DCHA) and its residents a setback. The court's decision in Pratt v. District of Columbia Housing Authority put a dent in DCHA's efforts to have local D.C. law support HUD's “One-Strike” policy.
Sales of new homes fell by 26 percent in 2007, the biggest drop since 1963, when record-keeping began, the U.S. Department of Commerce reported last month.
2007 was also the worst year for housing starts in 16 years and, perhaps, since the Great Depression. In December 2007, housing starts were 1.006 million units, compared with 996,000 units built in 1991, Commerce Department officials report. December 2007 was itself a terrible month for housing starts: They were down 14.2 percent from November, when starts were at 1.173 million units.
A study of the Washington, D.C., metropolitan area, released in January 2008 by the Urban Institute, indicates that as the result of an aging population, demand for affordable housing will rise significantly over the next 30 years. The study, titled “Housing in the Nation's Capital—2007,” also indicates that the findings of the Institute, a Washington-based nonprofit think tank, are equally valid for other regions of the nation.
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