David A. Smith Author Archives

NH&RA News

NH&RA Hosts ICAST IRA & BIL Instant Benefit Estimate Calculator

ICAST’s IRA & BIL Instant Benefit Estimate Calculator is now available on NH&RA’s website under the Resources section.

The Guru Is In: Green is not what you think

Ask Americans what they envision by green building and the property they describe will likely be a ground-hugging campus, newly built, festooned with cutting-edge technology. Then show them a 12-story central-city high-rise built in the mid-1960s and they may instinctively recoil at its plain exterior, small footprint (often paved), and visible age. Yet, when properly compared, that refurbished 202 is much greener than the new campus, because “green isn’t what you think it is.” Instead it’s three things.

The Guru Is In: Disparate dangerous nonsense

Even as tax reform looms on the horizon, the LIHTC is under a different mortal threat, one from an unlikely source – the Obama Administration and its judicially questionable but so-far politically effective blunderbuss known as disparate impact. If not struck down in a case just argued in the Supreme Court, then we might as well kiss goodbye states’ autonomy to set their own QAPs and to make binding awards, and say sayanora to the LIHTC production pipeline as we know it.

The guru is In: The “healthy home living” tax credit

Young singles have plenty of personal, economic, and social mobility; they have minimal cash assets (and possibly maximal student-loan liabilities); they want to live somewhere close to work and pay as little cash for it as they can. Their needs beautifully complement what the elderly homeowners have, and what they have is what the elderly need.

Immigration, citizenship, and housing investment

Culturally, Mexico begins just south of Tucson, where the Interstate signs are in Spanish and the distances are in kilometers.

Invisible affordable housing

For want of a database, a valuable inventory is being lost.

The multi-purpose antidote

Among investment tax credits for real estate projects, the historic rehabilitation credit is a multiple anomaly. It is the oldest (enacted 1976); not capped and allocated but available as-of-right; payable at once on completion; and justified by physical heritage, not by reference to use.

David A. Smith: The guru is In: Expand RAD now

RAD, the public housing Rental Assistance Demonstration is in jeopardy of stalling for want of a simple legislative fix: Passage by Congress of a bill raising the current cap of 60,000 units to at least 185,000, or, better yet, eliminating the cap entirely.

Personal service or personal privacy?

Amazon, Google, and the NSA know more about your residents than your property manager does – and are collecting more information about them continuously.

Demand doesn’t create units; units create demand

In nearly four decades in this business, I have never believed in the logic structure underlying traditional market studies, because they have their causality backwards. And (confession time) I have never used one to make a decision, because a much better means of testing the market is readily available.

How to price a LIHTC deal

Do you want to be an affordable housing investment banker, a titan of structured finance making a market in low-income housing tax credits? You are ready to spend hours upon end laboriously gathering minute financial information on a proposed property; analyzing its risks in painstaking detail; performing two-dimensional scenario sensitivity analysis; and then surfacing and innovatively managing transaction, operational, and counterparty risks.

Heraclitus’ Preservation

At the recent presentation by the National Affordable Housing Management Association of its Community of Quality awards, all five winners were preservation: two 42-year-old Section 236s undergoing rehab; a new-construction rising like a phoenix from razed public housing; a 1928 hotel on its second renovation (1995 and 2013); and the turnaround of a drug-infested eyesore. Among them, virtually everything that we normally consider a property attribute was changed.

Four other shoes

In 1900, if you lived in a New York tenement, your bedroom was usually right below that of your upstairs neighbor. When he removed his heavy shoes late at night, you’d hear the two muffled thumps clearly through your ceiling – first one, then the second. Any delay between thumps might keep you awake, wondering what had happened above you.

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