Affordable Housing After the Great Recession
As noted in my last article, I recently attended the NCSHA annual Housing Credit Conference in Denver. The event took place while wildfires raged around Denver, but we were fortunately out of harm’s way in the downtown area. Due to all of the smoke from the fires, I think it was the first time that I have ever flown into that airport where I could not see the majestic front range of the Rockies greeting my arrival. But I digress …
One of the focal points of the conference that I would like to discuss here was the state of affordable housing, LIHTC and otherwise, in the wake of the Great Recession and our current political environment.
What has been the impact on affordable housing of the greatest financial upheaval in our country since the Great Depression? Well, it only makes sense that affordable housing is counter cyclical to the economy in that economic boom times usually mean a lesser need for it and leaner times increase the need and hence the demand. That is apparently where we are right now with an influx of over one million renters to the market in 2011, which is by far the greatest in recent history. Housing providers at the conference uniformly cited having more applicants and longer waiting lists than ever before. This, of course, means high occupancy and the need for record speed on lease-ups to help meet the demand. On the one hand, it’s unfortunate that so many families are in need, but on the other hand it appears that business is booming for our properties. Most of you are probably experiencing this same phenomenon as well.
So, while that is all well and good — and actually beneficial for the LIHTC Program — the looming debate over deficit reduction and tax reform in Washington was cause for considerable discussion at the conference. There is apparently not a lot going on legislatively right now in the pre-election environment, but attendees were reminded that we need to be good advocates and stewards of the program to keep it alive. Everyone was encouraged to stay in contact with their local members of Congress and to get them out to visit their tax credit properties to make the program a priority for both parties going into the fight over these two gigantic policy issues facing the country. Both pose a good measure of threat to housing credits, so educating our legislators is key to gaining their support and sponsorship.
Overall, I would say that the mood at the conference was hopeful but watchful — which I think that most of us have learned to be over the last few years, anyway, with all of the industry changes that we’ve experienced.
I have provided a macro overview for you here but I hope to move into more micro-related compliance topics from the conference in the months ahead, so please stay tuned — and stay cool as we weather the last sweltering days of summer heat!