On NOVOGRADAC: Low-Income Housing Tax Credits News Briefs – August 2024

LIHTC Industry

American Council for an Energy-Efficient Economy in July released “The Residential Retrofits for Energy Equity Playbook,” an 85-page guide to help organizations and government offices seeking to start, improve or expand energy upgrade systems for low- and moderate-income housing. The playbook includes sections on planning an equitable engagement process, identifying community and upgrade priorities and crafting a well-designed and equitable program and notes the importance of low-income housing tax credits in the process.

LIHTC State

Massachusetts in June announced the award of $227 million in state and federal funds for affordable housing. The announcement included $44.5 million in state tax credits, $27.1 million in federal 4% low-income housing tax credit (LIHTCs) and $12.1 million in federal 9% LIHTCs along with $143.4 million in other state grants and subsidies to help build or preserve more than 1,700 homes. The largest recipient by number of apartments receiving LIHTCs is Curtis Apartments in Worcester, a 150-apartment, seven-building redevelopment of a public housing site.

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The Iowa Finance Authority in July announced the award of more than $106 million in federal LIHTCs for 10 properties in the Hawkeye State. The awards are expected to build or preserve more than 400 homes. Timber Ridge, a 52-apartment senior property in Davenport co-developed by Parallel Housing and Woda Cooper Companies, received the largest award with $12.8 million. Iowa received 27 applications in this round.

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The North Dakota Housing Finance Agency opened the application period in July for four financing incentives for affordable rental housing development, including $31 million in federal LIHTCs. Applications are also now accepted for HOME, National Housing Trust Fund and the state-funded Housing Incentive Fund. The deadline for submissions is 5 p.m. CT Sept. 30.

LIHTC Dealmakers

Housing Trust Group in June received $20.4 million in low-income housing tax credit (LIHTC) equity for The Fountains at Hidden Lake, an 81-apartment senior property in Crystal River, Florida. The $24.5 million development will host seniors 62 and older who earn up to 40% and 60% of the area median income (AMI). City Real Estate Advisors syndicated the tax credits. Construction is due for completion in 2025.

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Trinity Financial secured $51.5 million in financing from KeyBank for the redevelopment of The Aeolian Building in Meriden, Connecticut, into multifamily housing. The future 82-apartment property was previously host to a company that manufactured automatic player pianos. Residents will earn up to 25%, 30%, 50%, 60% and 80% of the AMI with 11 apartments for market-rate tenants. The endeavor received LIHTCs as well as state and federal historic tax credits (HTCs). KeyBank provided a $27 million tax credit equity investment. The plan also includes the redevelopment of a nearby Little League complex and a basketball court.

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Hunt Capital Partners (HCP) in June waived its qualified contract option on Beverlye Crossings in Dothan, Alabama. The 104 garden-style apartments host those earning up to 60% of the AMI. HCP’s decision lengthens the extended-use period of the property to 2045.

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MGL Partners in July purchased a nearly 49,000-square-foot office building in Denver for conversion into a 50-apartment senior affordable housing property. The site will use the income averaging set-aside to host those earning up to 30% and 80% of the AMI. The Iliff Apartments development was previously awarded 9% LIHTCs. MGL Partners plan to demolish the office building before building the apartments.

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Guam Housing and Urban Renewal Authority anticipated 96 apartments will open before the end of the year at Summer Vista I, in the Dos Amantes area of the island’s Dededo village. Developers broke ground in February 2023 on the 12-building site. The development includes LIHTCs in the capital stack.

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Cypress Square, an 84-apartment affordable housing property in Sarasota, Florida, was completed in July. Sarasota Housing Authority and Fortis Development teamed up to develop the site, which hosts those earning up to 30% and 80% of the AMI. Bank of America provided the 9% LIHTC equity.

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Construction started in June on Court Street Apartments, a 111-apartment affordable housing complex in Binghamton, New York, which will in part host veterans who have experienced homelessness and other vulnerable populations. Financing includes $14.9 million in LIHTC equity and $6.4 million in federal and state HTC equity.

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LaFayette Apartments, a $13.5 million development in Waterloo, New York, opened its doors in June. The development hosts those earning up to 60% of the AMI. Lakewood Development II and Stoneleigh Housing developed the site, which was previously a school house. The 35-apartment senior complex received $5.4 million in LIHTC equity, as well as $4.4 million in state and federal HTC equity.

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Developer National Church Residences was awarded 9% LIHTCs in June for two properties in Ohio. Divinity Landing will feature 54 senior apartments in Macedonia. The Commons at Grant will preserve 100 apartments of permanent supportive housing in Columbus. Both are expected to begin construction in 2025.

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Developers broke ground in June on Dr. Violet T. Lewis Village, a 105-apartment affordable senior apartment complex in Detroit. The $29.3 million property will sit on the site of the former Lewis College of Business, a historically Black college and university. Wallick and Presbyterian Villages of Michigan are co-developing the site. Merchants Capital Security Bank, First Merchants Bank and Federal Home Loan Bank of Indianapolis participated in the capital stack. Developers anticipate opening doors in late 2025.

LIHTC People

Mark Morgan took over June 18 as chief executive officer of The Michaels Organization (TMO). Morgan, previously chief operating officer for TMO has served the organization for more than 35 years. Morgan takes over for John J. O’Donnell, who took a leave of absence after the June 17 announcement of allegations of racketeering in an indictment by the New Jersey State Attorney General. The indictment did not name TMO as a company and focuses on two properties along the Camden Waterfront in New Jersey.

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Massachusetts Housing Investment Corporation in June announced Leslie Reid joined as its chief of investment programs. Reid will oversee all investment as well as aid in market growth and expansion. Reid previously served as CEO of Madison Park Development Corporation, a community development organization in Massachusetts.

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Pennrose in June named Tricia Yarger as its vice president of capital markets. Yarger will oversee external capital partner and investor relationships as well as land acquisitions in a newly created role. Yarger brings more than two decades of experience to the role, including most recently as head of capital markets for Fairstead.

LIHTC Bonds

Rep. Wiley Nickel, D-North Carolina, introduced legislation in July to allow low-income housing tax credit (LIHTC) sponsors to access private activity bonds (PABs) 15 years after a property is placed in service without affecting a state’s cap in return for a 50-year affordability period. The Keep Housing Affordable Act (H.R. 8900) would reset the affordability period if the PABs (and 4% LIHTCs that go with PABs) were accessed after 15 years, with the option to commit to 50 years of affordability with access to PABs after 15 additional years or 30 years of affordability (without superseding the previous 50-year period) without further access to the bonds.

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The California Debt Limit Allocation Committee in June issued a series of proposed regulation changes for PAB-financed housing in the state. CDLAC staff conducted a public hearing on the proposed changes July 18 and CDLAC anticipates the adoption of the changes at a CDLAC meeting Aug. 6. The changes include extending one of the expiration date options for allocation to properties from 194 to 201 days, while adding a third option of 222 days. Another change requires at least 51% of the developer fee, cash flow and net sale proceeds to go to a Black, Indigenous and people of color (BIPOC) entity to receive seven bonus points in the evaluation criteria, rather than the previous requirement that the BIPOC entity receive a share of the proceeds.

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Co-developers Housing Visions and Redev CNY LLC in May unveiled Moyer Carriage Lofts, a 128-apartment adaptive reuse of a former factory in Syracuse, New York. The former Moyer Carriage and Car Factory is now a mixed-use property hosting those earning up to 60% of the area median income (AMI), including 50 apartments reserved for those requiring supportive services. The capital stack includes $3.6 million in permanent, tax-exempt bonds, $26.7 million in state and federal low-income housing tax credits, $14 million in state and federal historic tax credits and $6.4 million in state Brownfield tax credits.

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The Housing Authority of the City of Pittsburgh closed a Rental Assistance Demonstration transaction with HUD in June that will preserve 90 affordable rental homes at Manchester Commons in Pennsylvania. The site includes eight small multifamily residential buildings and 48 single-family homes in various locations across northwestern Pittsburgh. The $18.7 million redevelopment’s financing includes bonds, 4% LIHTCs and Moving to Work Housing Choice Vouchers.

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Augusta Housing, the housing authority in Augusta, Maine, received a $500,000 from the state in June in Community Development Block Grant funds for its Malta Street Housing development. The previous month, the development was awarded $4.8 million in 4% LIHTCs and bonds. The $11.3 million senior property will host those 55 and older earning up to 60% of the AMI. Augusta Housing expects to break ground in 2025 and open the 34-apartment site in 2026.