David A. Smith Author Archives

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

For more than half a decade now, we’ve heard unicorn tales of Social Impact Bonds (SIBs), and despite a compelling common-sense soundbite case, SIB sightings are rare, volume is minimal and replicable scalability at best theoretical…because we are having trouble putting together the right ingredients, the right government counterparties and the right sponsors.

Without realizing it, roughly 20 years ago American affordable housing drifted into its third new territory, and because its border isn’t demarcated, we’re wandering through it without a map.

In 1229, Christian monks in Jerusalem, rummaging about for parchment, unbound a centuries-old codex, scraped off what was written on it, refolded the leaves in half, and wrote atop the now-smaller book, at right angles, new liturgical texts for the Holy Land’s faithful knights.

By the time you read this, tax-exempt private activity bonds will be dead. Or they won’t. The New Markets Tax Credit will be dead. Or it won’t. The top corporate bracket will be 20 percent. Or it won’t.

If a true test of a company’s sustainability is its ability to transition from a founding or visionary CEO or leadership team to a next generation of both, then the affordable housing industry is in a watershed, where we are about to discover how many of today’s leading companies will still be so in half a decade.

So long have the Historic and Low Income Housing Tax Credits existed substantively unchanged that we take both for granted, not just in their existence but also in their particulars – procedural switches that were set one way for the Historic Credit, another for the LIHTC.

Just to our north lies a country whose population, eight percent less than California’s, is spread out over a land two percent larger than America, a country whose dominant language is the same as ours, and whose housing challenges are a refracted mirror image of ours at home, with fragments that are like ours but assembled in configurations entirely different from ours.

If asset management is the core competency of durable developers and investors, then asset valuation is a core skill of durable asset managers, and one that’s often under-resourced.

When the conversation turns to high cost, we wish it would go away. We are defensive, hesitant, technical and long-winded; modes of argument that make the industry look like complacent apologists for the status quo. Though our mode of argument hasn’t cost us yet, if we allow others to frame the debate, inevitably it will.

For every employee seeking affordable housing, there is an employer wishing the employee finds it – and not knowing how it can be created. Yet what employers can do is enormous, if we show them how to deploy the resources they already have.

It is the curse of the expert to be unaware of what regular folks don’t know about his or her subject.

The voluntary public housing revolution has yet to cost HUD a dollar: in fact, the Rental Assistance Demonstration (RAD) has leveraged $8.90 for every dollar of public housing funds deployed, generating $3.9 billion of construction investment on the 59,000 apartments that have closed, with another 126,000 on deck, which together are liberating 185,000 apartments from the 1.3 million home public housing inventory and awakening the hitherto squelched or sublimated entre- preneurial capacity of public housing authorities, many of whom may never have known they had it in them.