Yardi<\/a> client Burbank Housing has experienced the dire need for new construction firsthand, \u201cThat was one of the reasons why [Burbank Housing] built Logan Place (pictured, right), was for the homeless. When the company advertised that they were opening a brand new affordable housing property, they went straight to the homeless shelters. A majority of our applicants were from the shelters throughout Sonoma County,\u201d she says.<\/p>\nWithout adequate housing availability, low-income families are relegated to shelters or the streets. Competition for one of the few affordable housing units becomes desperate.<\/p>\n
There are several factors contributing to the decline in available housing. Primarily, the building costs have increased while equity has remained the same for decades. There are also fewer gap financing offers and tax credits, with less money flowing from HUD in programs such as the HOME Investment Partnerships and The Community Development Block Grant. Lastly, equity investors aren\u2019t seeing the returns that they would prefer, making affordable housing an unappealing option.<\/p>\n
\u201cThere is always a shortage of federal and state tax credits to go around,\u201d begins Jeanne Taylor, CFO of Preservation of Affordable Housing, a Yardi client. \u201c<\/b>After the economy hit a few years ago, the tax credit arena wasn\u2019t as plentiful…and the investors became a little stricter in their requirements.\u201d<\/p>\n
Future tax reform could further tighten investors\u2019 purse strings. Any legislation that includes lower rates and longer depreciation would damage the industry\u2019s bottom line. Novogradac & Co. proposes that the industry would see as much as 12 percent less equity, which is about $1 billion each year.<\/p>\n
With so many hurdles to new construction, affordable housing providers are taking advantage HUD 811 and 202 properties or setting their sights on the new tax credits and subsidies being issued for the preservation of existing housing. Aptly named Preservation of Affordable Housing has focused its objectives on improving existing properties.<\/p>\n
\u201cWe\u2019re also looking into what they\u2019re referring to as Rental Assistance Demonstration (RAD), where public housing agencies are going to be transferring to affordable entities and taking over some of the public housing stock that is at-risk, that needs a facelift and a little TLC. We\u2019re touching in that sector as well,\u201d says Taylor.<\/p>\n
The new approaches help but they cannot fill the void caused by a lack of new construction. The backlog for existing housing is too great and the demand continues to rise.<\/p>\n
\u201cYou know, Logan Place is a stepping stone for people who are coming out of the shelter,\u201d explains Fakalata. \u201c[Residents] have a low rent that they would be paying to help them save, to move on to something that\u2019s bigger and better. Logan Place isn\u2019t supposed to be somewhere where they sit forever. They need to use it as a stepping stone to, you know, get out there.\u201d Fakalata shakes her head. \u201cProvide for your family. Put a roof over their heads so that they don’t go back to being homeless again. They can use it as a stepping stone to get a house, get a job, build your rent and landlord history and move on so that they next homeless person can come in and start their new life.\u201d<\/p>\n
But that transition isn\u2019t happening fast enough.<\/p>\n","protected":false},"excerpt":{"rendered":"
Michael J. Novogradac, a managing partner at Novogradac & Co., estimates that available affordable housing lags behind demand by as many as 20 million units. The funding simply isn\u2019t there. Without it, low-income families and affordable housing providers are running low on options. Aubrey Fakalata, Resident Manager of Yardi client Burbank Housing has experienced the […]<\/p>\n","protected":false},"author":440,"featured_media":11121,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_s2mail":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,3354],"tags":[116,924],"class_list":["post-11120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-people","category-team-yardi","tag-yardi-client-profile","tag-yascsb"],"acf":[],"yoast_head":"\n
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low on options.<\/p>\n