The Covid-19 pandemic gave heavy blows to states all around the US. There has been a dire need for safe and affordable housing in California in the last two years, as noted by property management recruiters. To this end, California lawmakers passed two laws in an effort to beat rising home prices and cut through local zoning rules.
The LIHTC program was created by the Tax Reform Act of 1986 and has been revised on numerous occasions to support affordable housing development. The two major types of tax credits available to developers are the 4% tax credit and the 9% tax credit. The 4% LIHTC is referred to as the “rehabilitation tax credit” and is aimed to deliver up to a 30% subsidy. The 9% LIHTC, often referred to as the “new construction tax credit”, applies to new construction developments and is estimated to generate around a 70% subsidy.
In line with Senate Leader Toni Atkins’ speech, the bill allows up to four smaller second housing units on single-family land. However, this bill does not apply to ‘historic’ zones. Thus, it only applies to specific locales currently zoned for free-standing houses only.
Today, many investors, builders, and developers are investing in low-income housing tax credit (LIHTC) projects. These projects provide low-income workers with affordable and secure homes. They also give investors a consistent return.
They involve all the hazards related to real estate assets. The projects also feature crucial compliance demands and other risks unique to the tax credit program. As such, investors should not ignore expert, affordable housing asset management. If they do, they risk lowering their asset’s likely returns.
What Is Affordable Housing Asset Management?
It is not easy to run an affordable housing program. It requires a hands-on approach and creative tools. Such techniques ensure the properties are under proper maintenance. Likewise, inhabitants have access to needed services. They also adhere to project funding-compliance standards at all times.
Generally, affordable housing asset management refers to forming a solid creation of operational and financial strategies. These tools aid in tracking a firm’s affordable housing portfolio. It involves the creation and implementation of clear, sustainable, and long-term investment goals. The Newport Group plays an active role in this effort. The Newport Group provides executive placement services in the real estate sector. The services help firms save time and money while boosting their property performance by providing them with experienced executives through their SMART Search Process.
Advantages Of Affordable Housing Asset Management
Often, many organizations focus on revenue generation over asset and portfolio management. The emphasis is frequently on obtaining and underwriting the asset investment. In turn, this may result in the growth of an extensive project portfolio and fund investments. Managing that portfolio might triumph over an acquisition-set investment team.
Due to the pandemic, asset managers who handle LIHTC investment programs of over 5 million households have had to review their asset management strategies and make adjustments accordingly. Their counterparts manage portfolios of both profit and non-profit market value housing developments.
Affordable housing providers must maintain cash flows while sticking to rent restrictions. They also must consider the needs of investors and their tenants, who are more likely to be under financial strain.
The Newport Group assists you in finding the top real estate development executives for your project. With more than 25 years in real estate recruitment, they can soundly link you with skillful talents to manage your LIHTC project.
We Network With A Purpose
The Newport Group is a leading executive recruiting firm with expertise in numerous industry verticals. We deploy proprietary data sets and meticulous processes to identify, recruit, place, and help retain blue-chip talent at leading companies nationwide. Turn the challenges ahead into competitive advantages alongside our help. Roles we’ve placed include Senior VP, VP of Operations, Sr. Construction Manager, and Operations Manager Telecom, to name a few. Our team of recruiters is active in all sectors of real estate development, including production homebuilding, multifamily, affordable, commercial, retail, land, and asset and property management. Construction verticals include commercial, civil, telecom, gas, power, utility, pipeline, infrastructure, and environmental consulting and remediation. Ever strategic in our approach—we present talent that aligns with our client’s strategic objectives.