LIHTC Industry
The U.S. House of Representatives passed $79 billion bipartisan legislation Jan. 31 that includes provisions to restore the 12.5% increase in annual 9% low-income housing tax credit (LIHTC) allocation for 2023-2025 and to decrease from 50% to 30% for 2024 and 2025 the private activity bond financing threshold for 4% LIHTC transactions. The Tax Relief for American Families and Workers Act of 2024–which also includes expansion of the child tax credit and restoration of research and development deductions–passed by a 357-70 margin and headed to the Senate. Novogradac estimates that the LIHTC provisions would provide more than 200,000 new and preserved affordable rental homes.
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Growth in housing rentals slowed in 2023 after record-breaking increases in 2021 and 2022 while rental unaffordability increased by 2 million households during the last three years, according to a report by the Joint Center for Housing Studies of Harvard University released Jan. 25. The America’s Rental Housing 2024 report saw apartment rents drop year over year in nearly one-third of the 150 markets tracked. Simultaneously, a record-high 22.4 million Americans spent more than 30% of their income on rent and utilities. The report also indicated a record-high number of people experiencing homelessness.
LIHTC State
Legislation introduced in February in the Utah House of Representatives would allow unallocated portions of the state low-income housing tax credit (LIHTC) to be carried forward. H.B. 465 modifies several affordable housing provisions, including allowing the Utah Housing Corporation to allocate credits returned from the previous year. The bill would also allow the allocation of holdover credits if all potential credits were not allocated in a previous year, with a maximum of 15% of the total previous allocation amount.
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A bill introduced in January in the New Hampshire House of Representatives would establish a committee to study the feasibility of a state LIHTC. H.B. 1470 would create a three-member committee (two members of the House, one of the Senate) to examine the possibility and report to the Legislature and governor by Nov. 1. New Hampshire has no state-level LIHTC, but all three of its border states–Maine, Vermont and Massachusetts–have such credits.
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A bill introduced in January in the Arizona House of Representatives would increase the annual statewide allocation amount for the state LIHTC, while extending the sunset date and allowing discretion to award more state credits to a recipient. H.B. 2576 would extend the Arizona LIHTC’s sunset date from the end of 2025 to the end of 2031, while increasing the annual statewide cap from $4 million to $8 million beginning in 2025. The legislation would also allow the Arizona Department of Housing to award the
amount necessary for the economic feasibility of the project. Currently, there is a cap of 50% of the federal amount. The Arizona LIHTC was enacted in 2022.
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Legislation introduced in January in the Oklahoma House of Representatives would temporarily increase the annual statewide cap for the state LIHTC incentive while also making the credit nonrefundable and establishing a sunset date. H.B. 3243 would increase the annual allocation amount from $4 million to $15 million through 2029 before reverting to $4 million until the credit’s proposed sunset date of Dec. 31, 2034. Another bill introduced in the Oklahoma Legislature, H.B. 4018, would require any state LIHTCs reallocated from a previous year to count against the annual cap of the year in which they are allocated.
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A bill in January in the Virginia House of Representatives would increase the state LIHTC’s annual cap from $60 million to $100 million for calendar years 2023 through 2025. H.B. 1096 would provide the three-year increase for the state credit, which was enacted in 2021 and sunsets at the end of 2025. The legislation wouldn’t change the requirement that $20 million of credits be allocated to developments in localities of 35,000 or fewer residents.
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Massachusetts in January awarded LIHTCs to 19 developments. The awards hope to build or preserve more than 1,900 apartments in the state. Developments in Athol, Boston, Cambridge, Chelsea, Everett, Franklin, Holyoke, Northampton, Oak Bluffs, Rockland, Salem, Somerville, South Hadley, Springfield, Templeton, Wellfleet and Worchester received awards.
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Rhode Island announced in January it received 75 applications for statewide housing programs. Part of the $90 million available in this third round of funding includes LIHTCs along with $65 million in State Fiscal Recovery Funds. Applications were submitted from 21 of the Ocean State’s 39 municipalities. An award announcement is anticipated in May.
LIHTC Dealmaker
The National Equity Fund (NEF) announced Jan. 25 it directed nearly $2 billion to affordable housing investments in 2023. The figure includes $1.43 billion in low-income housing tax credit (LIHTC) equity as well as nearly $425 million for preservation lending and workforce housing commitments. NEF investments of more than $24.5 billion have built or preserved affordable housing since its inception in 1987.
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Merchants Capital Jan. 19 announced its 2023 efforts raised $506.7 million in multi-investor, proprietary and state credit offerings as well as $365 million in LIHTC equity. In January, the financier closed its largest tax credit equity fund to date, Merchants Capital Tax Credit Equity Fund 14, LP, which raised $263 million with a large institutional investor. A multi-investor fund that closed in December 2023 raised $160 million.
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Cinnaire closed a pair of multi-investor LIHTC funds totaling $193 million in January. The financier anticipates the funds will support the creation or preservation of nearly 1,850 apartments across 22 developments in nine states. The funds support
developments in the Midwest and Mid-Atlantic regions. The closings brought Cinnaire’s total equity investments raised in 2023 to $417 million.
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Dominium announced plans Jan. 9 to build 605 affordable apartments in Glendale, Arizona, across two properties, 67 Flats and Juniper Square. The former will deliver 384 apartments, the latter adding 221 senior apartments. For the development of both sites, Dominium received an award of LIHTCs.
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Clara Brown Commons, a 61-apartment property in Denver, opened in January. Mile High Ministries developed the site, which uses the average-income set-aside. Hunt Capital Partners invested in the federal LIHTCs as well as provided solar investment tax credit (ITC) financing.
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KeyBank secured $88 million in February for Cantarra Apartments, a mixed-income apartment development in Manor, Texas, near Austin. Of the 325 apartments, 166 are set-aside for those earning up to 60% of the area median income (AMI); the remaining 159 homes are market-rate apartments for those earning up to 120% of the AMI. KeyBank provided a $41.6 million construction loan and arranged a $46.2 million Freddie Mac 36-month Non-LIHTC forward commitment. JCI Residential is developing the site.
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Travois will develop Yavapai-Apache Homes VIII, a 40-home community on Yavapai-Apache land in central Arizona. The endeavor includes 14 four-bedroom single-family homes, 14 three-bedroom single-family homes, and six two-bedroom duplexes. The development includes a $21.5 million LIHTC equity investment from Raymond James Financial.
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Developer WinnCompanies in January secured financing for The Westcott, a $68.1 million, 114-apartment development in Swampscott, Massachusetts. The majority of the site’s apartments, 94, will host those earning up to 30%, 60% and 110% of the AMI, while the remaining 20 are market-rate apartments. Bank of America provided a LIHTC equity investment. WinnCompanies anticipates completion in spring 2025.
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Co-developer Woda Cooper and Healthy Homes celebrated the January opening of Lockbourne Green, a $16 million, 60-apartment, mixed-use property in Columbus, Ohio. In addition to hosting those earning up to 40% to 70% of the AMI, the property also hosts an early learning center. Bank of America made a $7.3 million LIHTC equity investment into the site.
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Hudson Valley Property Group (HVPG) in January acquired Northgate Apartments in Camden, New Jersey, with plans to rehabilitate the 21-story, 321-apartment site. The property was built in 1963. Financing includes federal LIHTCs, with Enterprise providing a tax equity investment, as well as Aspire NJ state tax credits. HVPG plans a two-year rehabilitation of the site.
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A $14.3 million adaptive reuse of a schoolhouse into Bryant School Apartments in Hornell, New York, completed construction in January. The 39 apartments, all of which are available to those earning up to 60% of the AMI, received $7.7 million in federal LIHTCs and $2.2 million in state LIHTCs. Park Grove Development and Providence Housing redeveloped the site. The Bryant School closed in 2021.
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Evergreen Real Estate Group in January announces completion of Bellwood Senior Apartments, a $31.5 million, 80-apartment senior affordable housing property in Bellwood, Illinois. The development will host seniors 62 and older earning up to 60% of the AMI. Bank of America provided federal and state LIHTC equity, with Hudson Housing Capital syndicating the tax credits.
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Developer Alinea Capital Partners was set to begin construction earlier this year on 10 @ 8th, a five-story, 52-apartment affordable housing property in New Bedford, Massachusetts. The development received federal and state LIHTCs. MassHousing provided $14.2 million in tax credit equity bridge financing as well as a $2.2 million permanent loan. The site also received $54,889 in ITCs.
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RealAmerica Development prepared to expand its plans for a mixed-income endeavor in South Bend, Indiana, to add 23 more apartments in January. The plans now call for two 45-apartment market-rate properties and Diamond View Apartments, a 60-unit affordable housing complex for those earning up to 30% and 60% of the AMI. The development received an award of LIHTCs in 2023. The expanded plans required approval from the South Bend Common Council in February.
LIHTC People
Sarah Brundage was named in January as the new president and CEO of the National Association of Affordable Housing Lenders (NAAHL). Brundage previously served as senior advisor for housing supply and infrastructure in the Office of the Secretary at the U.S. Department of Housing and Urban Development. Brundage follows Buzz Roberts, who retired in February after a nine-year stint at the helm of NAAHL and a 45-year career in affordable housing.
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Enterprise Community Partners in January named Kari Downes as president of its housing credit investments business. Downes has spent more than two decades with the low-income housing tax credit syndicator, including previously as its executive vice president of housing credit investments for more than five years. Downes succeeds Scott Hoekman, who has spent 30 years with Enterprise.
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MidPen Housing in January promoted Abby Goldware Potluri and Joanna Carman to senior vice presidents and co-heads of housing development. The pair will share oversight of a 50-member team aiming to develop approximately 5,000 apartments. Potluri joined MidPen in 2008, progressively promoting to her most recent position as vice president of housing development. Carman joined MidPen five years ago as its director of development.
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Dominium in January announced it hired 154 employees in the fourth quarter of fiscal year 2023. The affordable housing giant also promoted 26 employees during the same period. Dominium owns and manages more than 38,000 apartments at more than 230 sites across the country.
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Bill Brewer, Elaina Mulé, Lorri Murphy, Eric Novak and Emily Paulsen were named Jan. 18 as the new executive committee for Nevada Housing Coalition. Murphy will serve as chair, Mulé as vice chair, Novak as treasurer, Paulsen as secretary and Brewer as chair emeritus. The coalition also named J.D. Klippenstein to its board of directors.
LIHTC Bond
Elizabeth Brook Apartments, an 87-apartment redevelopment/expansion in Stow, Massachusetts, received a low-income housing tax credit (LIHTC) investment in January from MassDevelopment. The Stow Elderly Housing Corp. development combines a 37-apartment new construction with the renovation of a 50-apartment complex as well as the conversion of a single-family house into apartments. MassDevelopment provided $25.8 million in tax-exempt bonds along with $23 million in federal 4% LIHTC equity. Eastern Bank also provided financing.
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Henrietta Homes in Cleveland received $18.1 million in financing in February from KeyBank. The homes are 40 lease-to-purchase affordable single-family homes in the city’s Hough neighborhood east of downtown. KeyBank invested $10.2 million in federal 4% LIHTC equity as well as provided a $7.9 million construction loan. The Famicos Foundation is developing the site.
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Dominium announced in January the resyndication of a pair of properties in Florida. One, Crossings at Cape Coral, is a $6.1 million rehabilitation of a 168-apartment property in Cape Coral, Florida. The other, Oaks at St. John, is a 160-apartment property in Ponte Vedra Beach, Florida, that will undergo a $5.5 million renovation. Both resyndications will use capital stacks that include 4% LIHTCs