Affordable Housing Industry Update
Roadshows, RealWorld to provide insight
The world of Affordable Housing is not immune to change. This changing knowledge base is fundamental for the industry’s property managers and owners. Adaptability is an essential trait due to uncertainty in the Affordable Housing market, given the recent shift in the administration, according to industry officials.
Tax cuts promised by the Republican Congress and president have cast doubt among investors as to the continued viability of low-income housing. Housing and Urban Development (HUD) has shepherded the construction of 2.78 million units from 1987-2014; however, the 4 percent Low Income Housing Tax Credit may not be available to stimulate the development of housing targeted to lower-income households. Furthermore, a moratorium on new regulations may halt actions targeted at streamlining the system, something badly needed by the industry.
Likewise, HUD’s programs, Housing Rent Supplement (RSP) and Reverse Auction Program (RAP), are nearing the end of their terms. RSP, created in 1965, provides rent supplements on behalf of needy tenants living in privately owned housing, while RAP promotes low-cost property inspections for HUD-assisted housing. Both programs are transitioning into HUD’s Rental Assistance Demonstration Program (RAD), which according to housing industry experts, could be the Affordable Housing industry’s solution to preserving Low Income Housing. The public/private partnership has helped revitalize the country’s vast inventory of public housing that has fallen into disrepair.
Another program, the Project Rental Assistance Contract (PRAC) portfolio, is badly in need of capital infusion and could be rolled into RAD.
The possibility that these and other programs could fall by the wayside – through tax reform or other budget cuts/freezes at HUD – stands to disrupt what has been a robust investor market in Affordable Housing. With rents increasing faster than tenants can pay, HUD’s mechanisms for assistance need more than a little maintenance.
That’s a hard pill to swallow for 2017.
TRACS 2.0.3.A. has major changes going into effect soon
Gustavo A. Sapiurka, Senior Vice President of OneSite Enterprise Solutions at RealPage, Inc., has been following Affordable Housing’s course more closely in recent months and will continue to talk about it on the RealPage Affordable Roadshow and at RealWorld, RealPage’s annual user conference. Sapiurka encourages executives and professionals to seize the opportunity to understand what is coming down the pike.
“There are uncertainties in the Affordable market,” Sapiurka said, “and things that anyone who is part of that market needs to know about.”
Of particular interest to Sapiurka is the impact of the latest updates to the Tenant Rental Assistance Certification System. The upcoming TRACS 2.0.3.A. update will incorporate major changes that impact the software used at the site level for reporting assisted housing programs.
Sapiurka will touch on TRACS 2.0.3.A., which goes into effect Oct. 31, 2017, at each of three upcoming roadshows in Greensboro, N.C., Atlanta and Boston this spring as well as at RealWorld in Las Vegas in July. His session at RealWorld, RealPage’s annual conference, is one of several that will address Affordable Housing and rental housing trends and insights, as well as product training. At the first roadshow earlier this year in Los Angeles, Sapiurka touched on the highpoints of TRACS 2.0.3.A. before a group of some of the largest Affordable Housing providers in the region.
‘All of these are action items that will need to be taken’
A key driver of TRACS 2.0.3.A. is repayment agreement functionality. HUD has made changes in an attempt to clarify and help properties better report repayment agreements between residents and HUD, which improves the quality of data HUD reports to the GAO and other agencies in charge of oversight. Sapiurka expects the new changes will assist HUD and the federal government to gain better insights into the effectiveness of the program.
“There are new ways to report repayment agreements, and there are additional fields that will need to be reported,” Sapiurka said. “Property managers and owners will be reporting all activities on every single repayment agreement, regardless if it’s a zero payment, just to make sure that HUD is able to capture all the data on a monthly basis.”
Sapiurka illustrated how a new feature moves an account from active to inactive if a resident fails to meet the repayment agreement three months in a row. Once repayments are restarted, the status reverts to active.
Additionally, TRACS 2.0.3.A. has updates for working within RAD, as well as how properties deal with social security and date of birth for foster children and adults. Lastly, new management and reporting processes make headway in HUD’s Family Self-Sufficiency (FSS) program.
“All of these are action items that will need to be taken by management or the user,” Sapiurka said. “If you’re not prepared, it will affect your business.”
RAD’s growth ensures the future of Affordable
The evolution of programs like RAD forces Affordable Housing to make continual changes, according to Sapiurka. RAD plays an instrumental role in helping the voucher-based component of the industry stimulate more updated housing options. In doing so, RAD repairs existing public housing through tax credits. HUD estimates that this rehabilitation of existing housing has a price tag of $26 billion.
Since the program’s inception in 2012, RAD has transformed 527 properties, representing 57,816 units. This $3.85 billion of new investment was used for rehabilitative construction.
RAD’s success is directly linked to the healthy future of Affordable Housing. Sapiurka stresses that, in short, RAD shields affordable housing.
“You’re basically preserving affordable housing from the public side,” Sapiurka said.
RealPage’s next roadshow is March 23 in Greensboro, N.C. at the Proximity Hotel.