Thursday, July 28, 2016

The Community Builders’ Historic South End Apartments receive honorable mention at Edson Awards

News from NHC's family of members 
by Radiah Shabazz, National Housing Conference 

The Historic South End Apartments, a development run by NHC member The Community Builders (TCB), recently received an honorable mention certificate in the HUD Preservation category at the 2016 Charles L. Edson Tax Credit Excellence Awards presented by the Affordable Housing Tax Credit Coalition. The award recognizes LIHTC developments that do an exception job of creating strong, healthy communities.

Home to 146 families, the Historic South End Apartments consist of 32 buildings in the South End neighborhood of Boston. They make up the largest intact Victorian residential neighborhood in the country, having been founded in the 1850s. The Community Builders acquired property from Ebenezer Baptist Church in 2013 and provided extensive rehabilitation to what became the Historic South End development.

Prior to receiving the award, all apartments received heating and window upgrades while others were given kitchen and appliance upgrades, new doors and other LIHTC-financed renovations. The historic character of the building was kept intact through the year-long revitalization through its outer detailing and facades.

“TCB is honored to be recognized by the Edson Awards,” Bev Bates, The Community Builders’ Senior Vice President of Development, said in a press release. “We’re committed to creating dynamic communities and preserving and developing high-quality housing for people of all incomes.” 

Headquartered in Boston, The Community Builders is one the nation’s leading nonprofit real estate developers and owners. NHC congratulates them on this prestigious honor!

How affordable housing gets built

by Ethan Handelman, National Housing Conference; Pamela Blumenthal, Urban Institute 

A version of this post originally appeared on Redfin.

Financing affordable housing isn't easy.

Our new interactive tool shows that without subsidies, which can be hard to come by, it's virtually impossible for developers to build homes that are affordable to low- or extremely low income families. That’s because lenders loan money for housing development based on the property’s expected income, and when rents are set to affordable levels, there’s a huge gap between the money needed to build and the money lenders and investors provide.

Yet, new affordable apartment buildings—albeit not enough of them—are built. So how do those developers do it? 

The primary source of development funding is the Low-Income Housing Tax Credit (LIHTC), a federal tax credit administered by state agencies. Most affordable housing that gets built receives an allocation of tax credits. (You'll see in our simulation that the LIHTC tax credits are the default for 100-unit buildings.) 

To receive tax credits, a proposed development must dedicate at least either 20 percent of its apartments to people who earn less than half of the area median income or 40 percent of its apartments to people who earn less than 60 percent of area median income. To be affordable, the rent for those apartments must be no more than 30 percent of the target income level. In practice, most properties dedicate most or all of the units to affordable use.

Yet, even if a proposal meets these conditions, tax credits aren't guaranteed. States allocate tax credits through a competitive process that varies by state and in most places has many more applications than available credits. 

And even if you get the tax credit, as our tool shows, it's not enough. This is where developers have to get even more creative. 

Most affordable housing financing deals involve a mortgage, tax credits, and two or three other sources of money. It's not uncommon, however, for developers to rely on upward of 20 financing sources as they try to fill the gap between what it costs to build affordable housing and the money they have available. 

Some of that money comes from federal block grants like the HOME Investment Partnerships Program or the Community Development Block Grant Program. Some of it comes from foundations, local trust funds, or state housing trust funds. Sometimes states or localities will give developers relief from their property taxes. There are also tax credits for clean energy or for using a historic building. In rural areas, the US Department of Agriculture sometimes subsidizes affordable housing. 
And then there's rental assistance; the promise of federal rental assistance can make a big difference in the development stage because developers can confidently tell lenders and investors that they will have renters and those renters will be able to pay (because the government is actually paying much of the rent). Rental assistance allows developers to serve lower-income renters while still ensuring necessary revenue to operate the property and pay debt service. Still, only about one in four people with low enough income to qualify for housing assistance actually receives it.

The problem with this multitude of funding sources—besides the fact that funds are limited—is the lack of standardization. Most of these tax credits and subsidies are awarded through competitive processes, but those processes often run on different timelines and require different applications. And if you need even three or four funding sources beyond the LIHTC to move forward with a proposed apartment building, winning one grant but having to wait six months for another can be fatal to the project. (Some states, such as Massachusetts and Minnesota, coordinate the state-run grant and tax credit programs to mitigate this problem). 

Funders also change what they want to fund. For example, Illinois recently prioritized housing in areas of opportunity in awarding grants to affordable housing developers. This year, however, they've added priorities for projects that help with community revitalization. Changing allocation year to year is mostly good from a public policy perspective, because it means public dollars flow to highest need. But shifting priorities can pose a challenge to developers looking to build affordable housing, because acquiring land, planning a development, and applying for funds is a multiyear process.

Given that developers must rely on many sources—sometimes as many as 29—beyond a mortgage loan and the LIHTC tax credit to build affordable housing, it's important for states to consider ways to better coordinate the variety of grants and tax relief opportunities available, and it’s important for all levels of government to ensure there are enough subsidy funds available to meet the need. Developers must overcome many obstacles, such as permitting, land acquisition, and gaining community support. Governments should take steps to make sure closing the financing gap is not the obstacle that dooms development.

The Assisted Housing Initiative is a project of the Urban Institute, made possible by support from Housing Authority Insurance Inc. (HAI, Inc.), to provide fact-based analysis about public and assisted housing. The Urban Institute is a nonprofit, nonpartisan research organization and retains independent and exclusive control over substance and quality of any Assisted Housing Initiative products. The views expressed in this and other Assisted Housing Initiative commentaries are those of the authors and should not be attributed to the Urban Institute or HAI, Inc.


Pamela Blumenthal is a senior research associate in the Urban Institute’s Policy Advisory Group, where she and her colleagues work to provide urban policymakers with evidence-based policy recommendations. She is also part of the Metropolitan Housing and Communities Policy Center, with an emphasis on qualitative research and expertise in affordable housing, land-use regulation, and economic resilience. 

Wednesday, July 27, 2016

Could Pokémon Go help affordable housing?

What we're building 
by Ethan Handelman, National Housing Conference

You’ve likely heard about, or even played, Pokémon Go, the new mobile game that overlays imaginary creatures onto a real-time map.  What you may not have heard is that Pokémon Go gives us a new way to think about how and where we live and travel. The map within Pokémon Go highlights public spaces, denser living patterns, transit and other features of places that offer more affordable housing opportunity.

Sure, it’s just a game. It has all the trappings of Pokémon: weird but oddly cute imaginary creatures, a puzzling imperative to collect them in spherical cages, and an undeniable ability to capture the attention of many, many people. By placing all of those features on top of a real-time map that you interact with by actually going places, the game pushes players to engage with the built environment in a way I’ve never seen before in a game. 

Pokémon Go rewards players for visiting Pokéstops and Pokégyms, all of which are pre-marked on the map. In my individual assessment and others’ more thorough review, Pokéstops highlight all sorts of valuable public and private spaces:

There are some businesses, too, including a few bars I won’t mention by name (one is immediately below NHC’s offices). For the most part, though, the game encourages players to appreciate the public spaces that come from investment of public resources.  Near my suburban home, there are just a few Pokéstops: two parks, my transit stop, a church and a hospital.  In downtown D.C., near my office, there are probably five times as many Pokéstops in the equivalent land area. Players will find a lot more Pokémon Go activity, closer together, in more densely settled, walkable communities. Stimulating positive encounters with those environments can help build appreciation for the smarter patterns of development that generate housing opportunities.

And in case you think this is too abstract and disconnected from the world of real estate, know that it’s already becoming a selling point for single-family homes. So, if you play or know those that do, let me know. We’ve already discovered that NHC member CPDC’s Edgewood Commons development is a Pokéstop, but if you find other Pokéstops that connect to affordable housing, please share them with me. I think we’re all curious to see where this goes.

CalHFA approved to borrow from FHLB San Francisco

News from NHC's family of members 
by Radiah Shabazz, National Housing Conference 

NHC member California Housing Finance Agency (CalHFA) recently announced that it has been approved for $100 million in financing availability from the Federal Home Loan Bank of San Francisco (FHLB San Francisco), an NHC Leadership Circle member. CalHFA will use its access to Bank credit to fund a portfolio of Fannie Mae and Ginnie Mae mortgage-backed securities composed of loans it has originated for low to moderate income homebuyers.

The new financing grants CalHFA access to a variety of low-cost funding solutions that can be used to achieve its affordable housing initiatives and assist families and individuals of all income levels obtain quality housing and become homeowners. They will also assist in expanding homeownership opportunities for low- and moderate-income families throughout California.

“We look forward to being the first housing associate to borrow from the Federal Home Loan Bank of San Francisco,” said Tia Boatman Patterson, executive director of CalHFA. “Access to the Bank’s competitively priced funding will provide us with flexibility in how we raise capital for lending and will expand our lending capacity. It will help us manage our liquidity and lower our costs of capital, which will ultimately help more Californians have a place to call home.”

Among low- and moderate-income residents in California, 30 percent of households spend at least half of their income on housing costs, compared to a national rate of just 15 percent, according to NHC’s “Housing Landscape 2016.” These efforts from FHLB San Francisco and CalHFA to funding more affordable housing in the state will enable more Californians to have safe, decent and affordable homes.

The financing deal was finalized in June. 

Monday, July 25, 2016

CPCD shows housers can take the lead on public safety

News from NHC's family of members 
by Radiah Shabazz, National Housing Conference 

NHC Leadership Circle member the Community Preservation and Development Partnership (CPDC), along with the Council for Court Excellence and fellow Leadership Circle member the Local Initiatives Support Corporation (LISC), recently surveyed 5,000 residents living in Washington, D.C. about perception of public safety amid increasing concerns about rising crime and homicide rates. The survey found that residents in the District’s Ward 8 feel the least safe and that a partnership approach is needed to improve concerns about public safety.

The survey was conducted last summer online and through face-to-face interviews for the purpose of measuring a baseline level of perception of public safety among city residents as a means to promote more collaboration with local police to identify strategies for improving it. Among its findings are that residents of Ward 8 feel the least safe in their neighborhoods, on public transportation and in parks and playgrounds. The survey also notes that younger D.C. residents experienced high rates of exposure to violent crime. The results come at a time where there is much concern nationally about rising rates of homicide in major cities and have pushed CPDC to launch and lead a “Collaborating for Prevention” initiative to foster community-driven public safety plans to ensure that residents thrive.

“Public safety is core to a community’s quality of life,” CPDC Senior Vice President for Community Impact Strategies, Pamela Lyons, said in a press release. “Our goal with this survey is to identify what we need to do to strengthen partnerships between residents who live in communities across the city and the law enforcement officers who are supposed to protect them. Residents are ready to build stronger, trusting relationships with police and work together with them to create safer neighborhoods for themselves and their families.”

Ensuring public safety is a vital aspect of strengthening the bond of community development. At our July Restoring Neighborhoods Task Force meeting LISC presented on community safety initiatives and community policing. View a recording of the meeting and visit our website to learn more about the Restoring Neighborhoods Task Force and to get involved.

Read the full report, “Perceptions of Public Safety: Report on the 2015 DC Public Safety Survey,” here.

The limitations of data-driven policymaking

by Brian Stromberg, National Housing Conference

My work on opportunity mapping at NHC has uncovered some important issues regarding the use of data in both describing social problems and in prescribing the solutions. For example, one question that came up during the webinar I recently hosted referred to the limitations of data-based methods like opportunity mapping. In the interest of expanding the discussion out from simple description, I wanted to provide a more nuanced discussion of what opportunity mapping and other forms of data-driven policymaking can mean for the participants on both sides of the process.

Opportunity maps have an unavoidable limitation: they are static representations of very non-static processes and relationships. Maps are a very powerful and important tool for translating facts and figures into a more relatable format. However, like a travel guide, they are outdated from the moment they are printed. Neighborhoods in many of the cities embarking on the great Geographic Data Journey (most recently prompted by the updated AFFH rule) are changing rapidly. On top of that, there are a lot of things that can factor into “opportunity” that are not easily mapped, such as social relationships. The ability of households to rely on neighbor and family members can mitigate some of the negative consequences that come from living in “low opportunity” areas.

Besides the inherent limitations of using a static map to represent active social processes, another issue to consider is how the data informing the maps are chosen. Many of the data used for making opportunity maps are “publicly available,” but this does not necessarily translate to “publicly accessible.” Equity in data access can be difficult to achieve given the technical knowledge required to find, analyze and visualize data. Not only can the simple process of gathering and packaging data for analysis be time-consuming, but effective analysis and visualization of that data often requires some sort of training in various software packages and analytic theories. Data can be difficult to wrangle even for seasoned researchers; community members that haven’t had the privilege of learning the same skills are likely to struggle even more.

One potential answer for both of these issues may come in the form of community engagement. Including community members at various steps in the mapping process helps build equity into the final product. First, community members can be engaged with the selection of indicators, as well as during the data collection stage. This can help address the first concern mentioned above. Second, the actual analysis of the data and the creation of the map can benefit greatly from including community members whose voices are less likely to be heard in such technical policymaking processes. Training these community members might be beyond the scope of any data analysis program (in terms of agenda and in terms of simple capacity). However, the simple act of incorporating the importance of community perspective increases the possibility of policies that are inclusive rather than divisive.

The use of large datasets in analyzing social problems is an increasingly popular topic. Researchers at the Urban Institute recently published an essay on the use of data in predicting neighborhood change. The authors also cite the work of the Bloomberg Philanthropies What Works Cities project, which has funded an expansion of data-driven policymaking in 39 cities across the United States. Another recent data-driven project is the Silicon Valley Triage Tool, an algorithm developed to efficiently distribute resources for homeless people. The use of an algorithm to solve social problems created by a local economy whose success is based on monetizing algorithms may seem a bit too on-the-nose. Mother Jones has a balanced discussion of the tool and its implications. The federal government has also been participating in this expansion of data-driven policymaking. In addition to the broader Open Government Initiative, the White House recently launched the Opportunity Project, which collects open data sources from federal agencies and a dozen cities around the country.

Clearly, data-driven policymaking is becoming part of common practice. The potential for new insights is too great to ignore. Like other data-driven methods, opportunity mapping is an attempt to redress inequities that have built up over time. It’s important to remember that maps contributed to these inequities through the practice of redlining, and the seeming objectivity of data has been used in the past to justify oppression. As cities begin to grapple with the flood of data that is washing through policymaking, we need to make sure that the most vulnerable communities are not swept away, but are instead lifted up.

Tuesday, July 12, 2016

Making the most of summer

by Chris Estes, National Housing Conference 

I hope you had a restful, safe and celebratory Independence Day. The Wire took last week off in deference to the national holiday. The news here in Washington continues to be a fair amount of activity on the regulatory front (see below for more information on the opportunities). On the legislative side bills on non-housing issues and the gravitational pull of the election has led to a growing recognition that the appropriations bills are likely to not get passed and we are headed for another continuing resolution. As we move closer to the fall we will begin forecasting what this means for housing funding.

While progress on getting appropriations for housing programs passed in regular order remains doubtful, we have been encouraged by the strong bipartisan support for the Housing Opportunity through Modernization Act and are hopeful that past bipartisan support on homelessness issues will ensure renewed funding for the U.S. Interagency Council on Homelessness.

After a significant amount of discussion around the issue of principle reduction, FHFA announced in April that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent underwater borrowers. Today they launched an interactive map on that highlights the top 10 states where these potentially eligible borrowers live. The map can be sorted by MSA or ZIP code.

In addition to focusing on funding and regulatory issues at the federal level, NHC is working to develop the agenda and fill out the speaker lineups for our next two convenings: How Housing Matters on December 13 and Solutions for Affordable Housing on December 14.

In June, NHC elected six new members to its Board of Governors. I wanted to again welcome them to the board:
  • Dan Soliman, Director, Housing Impact Area, AARP Foundation.
  • Diane Yentel, President and CEO, National Low Income Housing Coalition.
  • Kirsten Johnson-Obey, Senior Vice President of Policy and Legislative Affairs, NeighborWorks® America.
  • Sandra Henriquez, Director of Operations, Rebuilding Together.
  • David Adame, President and CEO, Chicanos Por La Causa, Phoenix, Arizona.

In addition, the following were appointed to the Board of Governors by NHC regional affiliates the New York Housing Conference and the California Housing Consortium:
  • Marc Jahr, Consultant with Community Development Futures, LLC.
  • Carol Galante, I. Donald Terner Distinguished Professor in Affordable Housing and Urban Policy and the Faculty Director of the Terner Center for Housing Innovation at the University of California, Berkeley.

Our full Board of Trustees and Board of Governors rosters are available on our website.

As always, thanks for being a member of NHC.

Wednesday, July 6, 2016

2017 housing finance reform…already?

What we're building 
by Ethan Handelman, National Housing Conference

At NHC, we are already preparing for what could happen on housing finance reform next year, even though it is still summertime. The big question of what to do with Fannie Mae, Freddie Mac and other parts of our housing finance system still needs a definitive, legislative answer. NHC wants to make sure that affordable housing is a part of that answer in a constructive way.

Yes, I know there’s an election still to happen between now and 2017. It will be incredibly distracting for several more months, and then when it is over, the new Congress and the new administration will face the same questions that have stood open since 2008. Housing choices are required by life events, but they are enabled by financial options. How do we ensure that new parents can get a mortgage for the house with enough space for the baby? Can the recent college grad afford an apartment near her first job? Are there affordable housing options for the farm workers, restaurant workers, retail workers and the many other lower income people who keep our economy running? 

The technical details of housing finance reform help to provide the answers to those questions. At NHC, we are trying to connect the dots between the technical details and core messages of affordable housing. For instance, Shekar Narasimhan and I wrote an article on why multifamily finance needs its own solution in housing finance reform, potentially different from single-family. Yesterday, I spoke on a webinar for Habitat for Humanity affiliates who want to understand more about housing finance reform and the role they can play in making it happen. Our policy team is engaging with the Federal Housing Finance Agency on a range of regulatory issues. And at our Solutions for Affordable Housing conference on December 14, policy experts in housing finance will discuss the outlook for reform in 2017.

Post-election, we will have another opportunity to move beyond the temporary patchwork that has held the housing finance system together since 2008. Let’s make sure affordable housing is ready to play our part.

Saturday, July 2, 2016

NHP Foundation acquires Mark Twain hotel; to be preserved as affordable housing

News from NHC's family of members

by Radiah Shabazz, National Housing Conference

The NHP Foundation, an NHC member, recently acquired the Mark Twain Hotel in Chicago in partnership with Pembrook Capital Management LLC, The Chicago Community Loan Fund, Bellwether Enterprise Real Estate Capital, US Bank and the City of Chicago Department of Planning and Development. The Foundation will preserve and maintain the property as affordable apartments under the city’s new single-room occupancy preservation ordinance.

The building includes 152 single-occupancy units and over 9,000 square feet of ground-floor retail space. The NHP Foundation expects to begin the development phase of the project in 2017 and plans include upgraded kitchens and the addition of community space. The property will be listed in the National Register’s Proposed Residential Hotels in Chicago, 1900–1930 group designation, which recognizes the accommodation from this era as historically significant.

“Since 1932, the Mark Twain Hotel has been a landmark of the Gold Coast neighborhood. The acquisition and future renovation of the property by the NHP Foundation is an incredibly exciting project for all parties involved,” Richard Burns, president and CEO of the NHP Foundation, said in a statement. “We are proud to be a part of Chicago’s efforts to preserve its affordable housing, and we are delighted with the opportunity to significantly improve the property while providing a better quality of life for the residents.”

Twenty-five percent of renters in Chicago face severe housing cost burden, compared to just 15 percent of renter households, according to “Housing Landscape 2016,” NHC’s annual report on the affordability challenges in metro areas across the nation, The city’s single-room occupancy preservation ordinance (SRO) will help to ensure that more low- to moderate-income families have access to decent, affordable housing in the city.

The acquisition of the Mark Twain Hotel is the largest deal so far under the new SRO funding program for affordable developments .