Unlocking Value Through Asset Management
By Thom Amdur
3 min read
The annual Affordable Housing Tax Credit Coalitions “Edson” Awards Luncheon on Capitol Hill is named for LIHTC founding-father, Chuck Edson, honors outstanding examples of affordable housing around the country and in doing so raises the program’s profile amongst key legislators. Always an engaging speaker, Chuck’s remarks at this year’s luncheon in June highlighted the long-term success of our key housing production program. Chuck observed that while the average life-span of a federal affordable housing program is merely eight years, the LIHTC has aged far better. The LIHTC not only made it through its awkward middle-school years, but has since graduated high school, bought its first drink and is now old enough to run for the US Senate. The remarks were a humorous reminder of the program’s political success and longevity but just as easily could have been an analogy for how our industry has evolved and matured operationally.
This brings me back to a theme that I have raised several times over the past year in this column and will be featured prominently in this and future issues of TCA – that being the essential and highly specialized role of affordable housing asset management. (See Grappling with Growth)
Most development companies I work with at NH&RA are proudly entrepreneurial shops, driven first and foremost by new projects and acquisitions. Even the more tenured firms have a lean, mean start-up mentality, but there is a growing realization in our industry that as the affordable housing companies and portfolios have matured many have missed opportunities to unlock intrinsic value within their companies. This value can come in many forms: creating new operational efficiencies through energy investments or tax and insurance management, boosting NOI through rent optimization or ancillary income, or leveraging asset management data to better inform new development pro-formas, validating annual property budgets or informing building product and design decisions.
On June 6-7, NH&RA convened 120 asset management executives in Arlington, Virginia for a two-day forum to explore how affordable housing leaders are reinventing the discipline, creating value in their portfolios and sharing best-practices and strategies. I am incredibly humbled by the enthusiastic response we received at the event and the candor of what I believe to be some of the most informative and open discussions we have ever had at an NH&RA forum. The event served as the official kick off of NH&RA’s Asset Management Council, a collaborative space where owners, property managers, syndicators, investors and lenders can share best practices and build bridges with their financial partners.
Over the next few weeks, NH&RA will be rolling out to our members and the public an action plan for this new initiative, which will be focused on sharing replicable asset management strategies, developing and sharing industry best practices and creating a network of professionals who can collectively work together to better develop this key discipline. I hope you will join us in this important effort and look forward to hearing your feedback and suggestions.
