Savoring the Roses

3 min read

Sometimes we forget just how good we have it. Every now and then, we need to stop and smell the roses as the saying goes.

That’s the case with the low-income housing tax credit equity market, the proverbial garden that has caused more than two million affordable apartments to bloom over the past decades from new construction or substantial rehabilitation projects.

Today the program is still alive, after nearly 28 years, a record length for any federal housing development program. The properties developed today are better than those in the early years of the program: much more energy efficient and typically enhanced with a wide range of services for residents.

Just recently, we’ve seen the ratification of an accounting rule change making LIHTC investments more attractive to corporate investors; positive new CRA guidance; the preservation of the program in House Ways and Means Committee Chairman Dave Camp’s tax reform discussion draft; and the Senate Finance Committee’s approval of favorable LIHTC extender provisions.

Best of all, the LIHTC equity market is strong and working efficiently today. There’s plenty of equity available to finance virtually all new projects; yields to investors are at reasonable levels; and robust credit pricing to developers in just about all markets means new developments need less gap funds if any to be viable. As signaled in this month’s article on tax credit equity (“On the Cusp of Further Growth,” p. 24), current signs suggest another strong year for the LIHTC market in 2014.

We also take a moment this month to appreciate what is happening in the green building and retrofit world. On April 3, National Housing & Rehabilitation Association held its inaugural Preservation Through Energy Efficiency Road Show in Philadelphia, a smashing success that attracted more than 120 attendees from the affordable housing, utility, and other industries. (“PTEE Road Show Kickoff is an Eye Opener for Attendees,” p. 14) One of the topics covered was successful resident engagement – how to persuade residents of green affordable multifamily properties to adopt behaviors to proactively conserve energy and water and thereby maximum building performance. A handful of developer/owners around the country are employing a variety of actions to make this happen. (“Making Green Buildings Work,” p. 18)

Green is also the prevalent theme in this month’s case study article about a newly completed tax credit development in Los Angeles County. Arbor Green Apartments incorporates a large solar photovoltaic system that provides electricity to residents and supplies almost all of the property’s power needs. (“Ultimate Green,” p. 4)

Truly, there is a lot happening today in the affordable housing industry that gives reason to celebrate. This month, rather than worrying about possible negative impacts from future tax reform or housing finance reform legislation, or further tapering by the Fed, let’s stop a moment and relish the current positives in our industry. Enjoy the issue.