2018, a Pivotal Year in the Affordable Housing Industry
As discussed in RealWorld 2018 sessions
2018 has been a pivotal year in the Affordable Housing sector under the current administration. With a shortage of 7.2 million affordable housing units and the highest increase in homelessness in almost a decade according to HUD, the Joint Center for Housing Studies of Harvard University, and other sources, the need for innovation and simplification has never been greater.
In February, HUD Secretary, Ben Carson, declared in the agency report, Strategic Plan Fiscal Years 2018-2022, the department’s goal to “move away from the policies and programs of the past and develop an innovative approach that anticipates the housing needs of the future, while addressing current needs.”
Several hundred Affordable industry professionals packed the session on Affordable Industry Updates at RealWorld 2018 to hear HUD’s Housing Program Manager, Lanier Hylton, and other experts address how these changes will directly impact their communities.
HUD priority goals, waiting list data and e-signature initiatives
HUD has established four broad Agency Priority Goals (APGs) that it expects to achieve over the next two years:
- Promote economic opportunity for HUD-assisted residents by encouraging self-sufficiency and financial stability, as measured by increasing the proportion of household who exit HUD-assisted housing for positive reasons.
- Transform assisted housing by transitioning 105,000 additional Public Housing units to a more sustainable platform by the end of FY 2019.
- Reduce the average length of homelessness in communities by an average of three days by the end of FY 2019.
- Protect families from lead-based paint and other health hazards by making an additional 23,500 at-risk housing units healthy and lead-safe by the end of FY 2019.
The Agency is also implementing some firsts in data retrieval and document management in alignment with these APGs. They include:
- Tracking waitlist data that will enable operations to view vacancy status and availability.
- E-signature implementation that will expedite document workflow via online portals and email.
Jenny DeSilva, Director for Blueprint Housing Solutions, also clarified updates regarding Fixed Income Verifications that must occur every three years. She noted the process has been made easier and more convenient by allowing qualified residents to self-certify asset value and other aspects of the verification process.
LIHTC and a snapshot of recent legislation
“The Consolidated Appropriations Act of 2018 included a 12.5 percent increase in LIHTC allocations for the next four years, but it might not fill the gap created by the Tax Cuts and Jobs Act (TCJA) [passed in 2017] because it will have little effect on the pricing of credits and investor tax benefits and is not a permanent fix. This uncertainty comes amid a deepening affordable rental housing crisis: only around 20 percent of households that qualify for housing assistance receives any.” – Urban Institute Research report, From Safety Net to Solid Ground: The Low-Income Housing Tax Credit – Past Achievements, Future Challenges, July 2018
RealPage’s Greg Proctor, Vice President of Compliance, highlighted the impact of recent legislation and policies on an embattled LIHTC program:
- The National Council of State Housing Agencies (NCSHA) compliance policy advocates limiting developer and consultant fees which will cause some slow down in the units being built.The Council is also recommending a minimum threshold for rehabs, implementing needs assessment qualification and the waiver of a qualified contract.
- The overall impact of the Tax Cuts and Jobs Act (TCJA) is discouraging industry investment because the trickle down effect of a reduced corporate tax rate is a decreased value in LIHTC investments.
- To offset some of the adverse effects of the TCJA, the Omnibus Spending Bill includes a new income-averaging set-aside option that would enable more income diversity, balancing higher-income and lower-income units and making more households eligible for LIHTC properties.
- The HUD Streamlining Final Rule limits the number of inspections on the properties or verifications every year.
Rural housing developments
Last month, the current administration recommended—in addition to an overhaul of federal government agencies and programs—moving the USDA’s loan guarantee and rental assistance programs to HUD. According to the Recommendations Summary of Proposal, “…Having both USDA and HUD housing programs administered by HUD would allow both agencies to focus on their core missions and, over time, further align the Federal Government’s role in housing policy.”
Despite the monumental changes and challenges facing the Affordable industry, Gustavo Sapiurka, RealPage SVP Enterprise Solutions, did not hesitate to praise this group—representing one of RealPage’s largest customer bases—for their dedication to providing quality housing for every one—a commitment that RealPage shares with its Affordable partners.
Learn more about how RealPage’s Affordable Solutions streamline document management workflows, automate move-ins, expedite certifications, and maintain compliance.