Resource Horizon for Affordable Housing Preservation Arizona Affordable Preservation Summit February 25, 2011 Jim Beachler JMB Preservation Advisors

Fractured Housing Markets; Affordability Redefined Housing Market Disarray Foreclosure Financial Market Upheaval Affordable Rental Housing Market Redefined – Job loss = doubling up; Halt to New Construction National Rental Vacancy rate 10.6% in 2010 – Despite an increase of 800,000 Households

Market Disarray and Responses LIHTC Market – TCAP and TECP Neighborhood Stabilization Program New Issue Bond Program HOME and CDBG; Other Local Resources Alternative Funding Resources – Energy Monies

NSP Basics and Affordability Three Rounds totaling 7 Billion Round 2 competitive; 1 and 3 = Entitlement 25% of total Grant - < 50% median – Grantee choice re: Rental or Homebuyer Use restriction Provisions choice of Grantee – Many follow HOME Program as Safe Harbor

NSP Property Types Foreclosed – 60 days delinquent under MBA delinquency calculations and owner notified – Property owner 90 days or more delinquent on tax payments – Foreclosure proceedings initiated or completed – Foreclosure proceedings complete, title transferred to intermediary that is NOT an NSP grantee, sub-contractor, or developer

NSP Property Types Abandoned – Mortgage/tax/tribal leasehold no payments 90 days – Code inspection determines not habitable and no corrective action within 90 days – Subject to court-ordered receivership/nuisance abatement or state definition of abandoned Vacant – Unoccupied structures or vacant land that was once developed

Tax Exempt Bond Market Continues to be important to Preservation Market New Issue Bond Program 2009 initiative – Treasury Department purchased $18.5 Billion – $6 Billion for Multifamily – Expenditure deadline extended through 2011 – Leveraged other resources (LIHTC, HOME, etc.) – Also provided Liquidity for HFA Variable Rate Bonds Volume Cap Tax exempt Bonds Important to Rental Housing finance efforts

Treasury / HUD Report to Congress (Reforming Housing Finance Market - 2/11) Four Priorities Referenced, including – Commitment to affordable rental housing – Flexible / transparent funding of targeted affordability 100 million renters 25% of all renters pay 50% of income for rent For every 100 extremely low income renters (< 50 of median) – 32 adequate rental homes Small Properties contain 1/3 of all rental apartments

Creativity and Focused Resources Budget Deficits = importance of wise expenditures Locally Designed and targeted NSP Funds / other resources may Revolve – Gap Financing Key for Affordability Rural Housing 515 Loan Subordination – other creative solutions are critical Energy Resources – Utility Company / other

Preservation Challenge Continues Importance of protecting housing resources LIHTC Expiring use, Section 8, Section 236, RHS 515, other assisted rental properties New Challenges and Opportunities to employ creative solutions Lessons learned from recent housing upheaval Array of Resources – Information Sharing Key