At the National Multifamily Housing Council’s annual conference in Orlando a couple of months ago, I had a chance to talk shop with one of the best in the affordable housing business: Daryl Carter, the founder & CEO of Avanath Capital Management. You’d be surprised at some of the questions he gets—or, on second thought, maybe you wouldn’t be.
Here’s how Carter handles an inquiry he’s heard from prospective visitors to one of the communities his company operates:
“Am I going to get shot?” his guest asks.
”Well, I don’t know,” Carter will say. “Is somebody after you?”
Carter’s tongue-in-cheek response is revealing. Affordable housing sponsors typically face opposition from poorly informed elected officials and local residents. High land prices, red tape and construction costs all contribute to the nationwide shortfall.
Notwithstanding these challenges, developers, public agencies and nonprofits are joining forces to buck the odds, as Nancy Crotti reports this month. Take Alvista Towers, a $150 million project that Phoenix Realty is developing in Queens, N.Y. Units will be evenly divided among low-income, workforce, and market-rate residents, so Alvista Towers will qualify for a city subsidy program.
In 2016, Denver launched a $150 million fund to help close the city’s 22,000-unit affordable housing gap. And Avanath Capital’s investors include retirement funds representing teachers and police officers, who too often can’t afford to live near where they work.
On the regulatory front, affordable housing advocates applaud several provisions of the recent tax overhaul. Congress approved a 12.5 percent, four-year boost in Low-Income Housing Tax Credit allocations. The legislation also authorizes income averaging, which supporters say will add flexibility and promote mixed-income communities.
Topping the next round of legislative priorities is the Affordable Housing Credit Improvement Act of 2017, which is attracting bipartisan support in the usually fractious Senate. The proposal would increase LIHTC allocations by 50 percent and expand the number of preserved and newly built units by 400,000 over 10 years.
Meeting the nation’s affordability challenges calls for all of these steps and many more. The long-term commitment demanded of the multifamily sector and its allies will be immense, but then so is the potential contribution to the nation’s economic well-being and social fabric.
You’ll find more on this topic in the April 2018 issue of MHN.