David A. Smith Author Archives

As will be amply demonstrated elsewhere in this month’s Tax Credit Advisor, the conceptual case for using improvements in affordable housing to improve healthcare outcomes is overwhelming. Common sense, personal experience, a nearly unanimous view of affordable housing providers, a host of expert opinions, statistical studies – everything favors it.

A few weeks ago at the World Bank’s biannual Global Housing Finance Summit, a conference of roughly 350 housing executives from around the world (mainly from national governments and the Bank itself), I spoke on Financing Housing Down the Income Pyramid, and the ensuing Q&A session produced this challenging question from the audience, “How do we create effective affordable rental tenures?” That choice of words instantly set me thinking, and in formulating my answer, I stumbled on the right way to frame the question.

Congressman Steve Pearce (R-NM-2): Mr. Russ, can you tell me what rates of return [LIHTC] investors are looking at in this market? A lot of money sits idle, desperately looking for return.

When soliloquized by megalomaniacal president Frank Underwood in House of Cards, our title quote sought to prove his opponents’ hypocrisy. But it actually reveals quite the opposite: a profound divide between two philosophies that affects almost every part of the affordable housing business.

Everyone in America knows that student debt is out of control. Seventy percent of the Class of 2015 will graduate with debt averaging $35,000 apiece, adding to the $1.2 trillion in student loans outstanding, a debt class bigger than car loans, bigger than credit card debt.

In central London, on the pavement at every street corner, every traffic light, every pedestrian crossing, are painted two words: LOOK RIGHT. They exist to protect us against the instincts most of us have spent a lifetime acquiring, instincts that kick in when we are inattentive, in a hurry, tired or under stress.

You know that old trees just grow stronger/ And old rivers grow wilder every day
Old people just grow lonesome/ Waiting for someone to say, “Hello in there, hello”
– John Prine, 1971

For centuries during the late Middle Ages, tales were told of the realm of Prester John, whose empire of milk and honey lay among the heathen somewhere beyond the horizon. Expeditions were mounted in search of this Most Christian King, reputed to breed unicorns, whose prized horns were brought back by intrepid explorers.

At the beginning of my talk on leadership to NH&RA’s Next Generation Leadership group in November here in Boston, my glib self-description (“either the room’s youngest old person or its oldest young person”) unwittingly voiced a generational paradox of our industry: what seems to older executives a gray floor seems to their younger colleagues a gray ceiling.

The Schleswig-Holstein question is socomplicated, only three men in Europe have ever understood it. One was Prince Albert, who is dead. The second was a German professor who became mad. I am the third … and I have forgotten all about it.
– Lord Palmerston (Prime Minister, 1855-65)

To the list of American things that are growing more expensive in real terms, we must add the standard LIHTC apartment, and the principal reason is our capital sourcing model, the funding sieve.

“You will be haunted,” resumed the Ghost,
“by Three Spirits.”
“I – I think I’d rather not,” said Scrooge.