Affordable Housing Developers Urged to Have Voices Heard, Be Ready for Great Deals

Carol Galante, Deputy Assistant Secretary for Multifamily Housing at the Department of Housing and Urban Development (HUD), urged affordable housing developers to aggressively advocate before the government and philanthropy to ensure they have a seat at the table when decisions affecting housing are made.

Galante was the keynote speaker at the 2009 Annual Meeting and Awards Luncheon for the Housing Association of Nonprofit Developers (HAND). HAND was formed in 1991 to support a professional community of housing providers in order to increase the supply of affordable housing in the Washington, D.C. metropolitan area. HAND was incorporated in June 1998 and is an IRS-approved 501(c)(3) non-profit organization. HAND is open to all nonprofit and for-profit housing developers, technical consultants, lenders, local governments, and advocates.

The annual meeting is held each June and features the presentation of the HAND Housing Achievement Awards. The awards recognize the finest in affordable housing projects, programs, and organizations during the preceding year.

Galante said she wants to be a bridge between the Department of Treasury and HUD. Helping the credit industry move forward is one of three goals she hopes to accomplish during her tenure at HUD. She said there are not enough investors for the market and that it needs to be broadened to include other players such as utility companies. These new investors can be encouraged to be good corporate investors thru the low income housing tax credits (LIHTC). She wants to ensure HUD programs work better with the tax credits programs. She said there was a NOFA issued in April with a closing date of June 29 which seeks comments on how the programs can better perform together.

Her second goal is to draft new approaches to preservation and new development. She wants to maintain long-term housing affordability as much as possible. She points to the housing trust fund legislation and the president’s proposed successor to the HOPE VI Revitalization program as examples of trying to expand the assisted housing stock and incorporate schools and retail in neighborhood design.

Her third goal is to make multi-family FHA program more widely available. She said HUD programs are like “your dad’s Pontiac, they haven’t changed much.” She said there are a lot of tools which are not financially available for affordable housing in today’s market which presents an opportunity for FHA.

She offered five recommendations to participants:

1. She said they must be aggressively advocating for what is needed with government and philanthropists over the next year to ensure they have a seat at the table when decisions on housing are made.
2. She said it would be wise to assess their organizational strength at this point in time. “What do you do best? What is your value added? Focus on your portfolio and put it in the best position,” she said.

3. Be ready to acquire property. She believes there will be huge discounts on high end quality property which will be made available in many markets that can transition into effective mixed income housing.

4. She encouraged the developers to plan new mixed use, transit oriented, green developments.

5. Finally, she said to stay nimble, innovative, and be creative to get the deal done.


$1.5 Billion in New Market Tax Credits Awarded

On May 27, the Department of Treasury announce it was awarding $1.5 billion in New Market Tax Credits to 32 organization scattered throughout the country.

In making the announcement, Treasury Secretary Tim Geithner said, "Many communities have been left with a shortfall of financial support and are unable to pursue desperately needed projects, leaving residents to fall even further behind. The New Markets Tax Credit program helps break that cycle by providing an incentive to invest in communities to break ground on new projects, create jobs, and offer much needed services."

The 32 organizations receiving awards have identified principal service areas covering 33 states, the District of Columbia, and Puerto Rico. The NMTC Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. A majority of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities.

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