Preliminary Agenda

When it comes to discussions on affordable housing, the first thing to establish is whether the discussion is about capital “A” or lowercase “a” affordable – meaning, government subsidized (“Capital A”) or more attainable housing geared towards workforce/middle income (but without the tax credits and red tape). During this session, we will delve deep into what investors and developers need to understand about “Capital A” affordable housing.

What are the different pieces to the affordable puzzle and how do you put them all together to make the math work? What does a typical deal structure look like? What is the basic setup for a 4% deal and a 9% deal? What are the latest in investment strategies and what are some strategies that have worked on recent projects? How does the current interest rate environment come into play? What are the various government agencies, enterprises, and programs involved in affordable housing and how are they integrated into a project? What does a public-private partnership look like for these projects? For those who might be hesitant to get involved in traditional affordable housing because it seems too riddled with red tape, let’s uncomplicate it and show how to make the numbers work.

Traditional affordable housing addresses low-income needs, but there is a wide swath of people who don’t qualify for government subsidized housing yet also can’t afford market rate housing. The growing subset of attainable housing focuses on this massive group that falls into the housing affordability gap, some 30-40 million families that are renters by necessity (in fact, the majority of renters) – 50% of which are rent-burdened, with rent costing more than 30% of their income.

This “lowercase a” affordable housing – call it attainable, workforce, middle income, missing middle, lower-price entry-level, or naturally occurring affordable housing – is particularly attractive to investors and developers because it serves a huge population of renters and would-be homebuyers. There’s tremendous opportunity and little competition, without all the challenges of government subsidized housing or limits on returns.

How are we meeting the needs of the middle? What are some new innovations in the middle-income housing space that address the shortage of attainable housing head-on? How can we create pathways to home ownership for the middle-income community? How are investors getting into this space and what do those deals look like? What are some creative ways of financing this kind of affordability? How can public-private partnerships be structured for these kinds of projects? How are developers targeting the right properties to acquire, build, and finance? What are local governments doing to address this need and work with developers to provide tax credits, attractive financing options, and other financial tools to support the need for middle-income housing? What will it take to get a Middle-Income Housing Authority established in every state?

The ability to access Fannie & Freddie and HUD financing makes all the difference in whether an affordable project deal can be done. What are all the financing options available for financing traditional affordable housing – the big ones like Fannie and Freddie, but also other lesser-known programs that are available? How will the new administration impact the availability of this financing? How are banks starting to get creative? How are debt funds leading development as regional lenders have stepped back? What are some different ways people are trying to free up capital for affordable projects? What are some ways of attracting investor capital to deliver affordable housing (such as pension funds)?

What are the challenges in developing new housing stock, particularly housing that’s affordable or lower cost? Will the Fed’s recent lowering of interest rates help spur on new development? What about rehabilitating existing properties? For traditional affordable housing, what are some of the changes in regulations with respect to property conditions and reporting to HUD? How are you navigating zoning issues and NIMBYism? Where is new construction for affordable housing happening, and how are developers looking at financing and returns for new construction deals? Where are you finding investors for these deals? How are public-private partnerships being utilized to create new attainable housing (middle-income/workforce)? What about workforce housing preservation? What are some case studies of recent projects with innovative capital stacks? What is working for developers right now?

The term “missing middle” specifically refers to types of housing products that haven’t been popular in nearly a century – those that fall somewhere between single-family homes and mid- to high-rise multifamily units that offer a range of affordability options and a greater variety of housing choices. Duplexes, triplexes, townhomes, bungalows, courtyard clusters, and live-work spaces are some of the more traditional housing products that comprise this “missing middle,” but other categories that are also growing in popularity with investors like ADUs, economy extended stay hotels, and manufactured housing can also uniquely address the crisis in attainable housing.

How are these different types of products addressing the affordability gap? What do investors need to understand about these different types of products? How can the development of these other types of “missing middle” housing products be supported and incentivized? How are developers overcoming zoning restrictions and other forms of municipal opposition? What needs to happen for the stock of alternative missing middle inventory to increase?

To develop traditional affordable housing, the Low-Income Housing Tax Credit (LIHTC) program is essential. This federal program has created the most affordable housing to date and is the most important and effective way of increasing affordable housing stock. And while LIHTC is a federal program, state agencies are responsible for allocating these tax credits, which means the rules vary from state to state. During this session, we will dive deep into the nuances and challenges of navigating LIHTC.

What are some of the biggest challenges and how are developers overcoming them? What does the regulatory environment look like and how are developers navigating it? What are some case studies of recent projects that were successfully completed? How are developers selling LIHTC credits to investors to use as cash? What are the investors looking for with these credits? Who is buying these credits right now and at what price? What are people doing to get their deals done right now? As we’re in the first quarter of a new year and the first 6 weeks of a new administration, what are investors’ short-term expectations for LIHTC pricing over the coming months? Are public housing authorities competing with private developers for these tax credits? In markets with a lot of conventional new supply, are LIHTC-funded assets in competition with conventional assets (but with added regulatory burden)?

Having the right technology is integral in any kind of property management, but when it comes to affordable/attainable housing it can be a make-or-break difference. How are you selecting the right tech stack for your portfolio? How are you developing your tech stack to create more efficiencies? How is automation being used to create more efficiencies, reduce errors, and free up staff for more human-centered tasks? What tech tools can be added to improve ROI and make properties more profitable? How are you thinking about your network planning and infrastructure future-proofing, including standards, configuration plans, and partnering with architecture and construction teams? What are you doing to bridge the technology gap for affordable applicants and residents? How can technology, including AI tools, be used to speed up the qualification and lease-up process? What other potential applications are there for AI? What tech platforms can be used to deliver resident services at scale? What about tech innovations for energy and water usage that can make properties more efficient and help residents save money on utilities?

Operating low- and middle-income housing comes with its own unique set of challenges. For LIHTC-funded housing in particular, there is the increased regulatory burden and compliance standards in order to maintain tax credits. But even in non-government subsidized middle-income/workforce housing, property managers are under constant pressure to drive costs down while simultaneously maintaining a positive customer experience – without allowing properties to fall into disrepair.

How can owners choose the right property manager for the programs they’ve partnered with? What do they need to know about the operational workload that has to be done onsite in order to maintain compliance? Should compliance be outsourced or remain in-house? Can it be centralized? How do you manage compliance at scale? How are you staying on top of all the regulations and what’s changing with LIHTC and HUD? How do you handle screening? How do you address safety issues and incident occurrences/injuries at aging properties? What about incidences of crime? For populations that need a lot of resources, what services are you providing and how are you trying to best serve your community? What amenities can you add that are beneficial without significantly increasing rent?

What new technologies are developers using that make housing cheaper to build and allow it to be more affordable – modular, prefab, 3D printing? What about design strategies that bring down the cost of new construction? What can we learn from building designs popular in other parts of the world, like single stairway “point access block” buildings? How can we work with local municipalities and state governments on changing building codes to allow such buildings?

Affordable housing operators can provide a wide range of resident services to support the well-being and stability of their tenants, which may include financial literacy programs, job training, childcare, health and wellness services, after-school programs, and access to mental health support. These types of services not only help improve residents' quality of life and foster a stronger sense of community, but they also help to reduce turnover and prevent evictions, which is a valuable cost savings and good for investors’ overall portfolios. What sort of supportive resident services are you offering at your properties? How have you seen these services make an impact on resident stability and delinquency reduction? What is the economic value of preventing an eviction? What is the total value of delinquency reduction? What is the quantifiable ROI on investing in prevention?

When it comes to affordable housing (or any kind of housing development), New York City is its own animal. During this small group session, we’ll discuss all the things unique to New York that investors, developers, and landlords are grappling with, including regulations on development, rent control, rent-stabilized assets, rent destabilization, tax abatements, and other requirements for affordable/attainable development.