Housing authorities have become significant developers of affordable housing and can bring certain advantages to a deal… their ability to combine local powers and federal assistance make housing authorities uniquely positioned to play substantial roles in the development of affordable housing.
CHESHIRE, Conn. November 20, 2017
HAI Group, RBC Capital Markets’ Tax Credit Equity Group, and Housing Alliance Group, LLC are pleased to announce the closing of RBC Tax Credit Equity-HAI National Fund 1, LP, a public-private approach to support affordable housing developments which are sponsored by public housing authorities on September 28, 2017. The Fund is the first of its kind in the nation to be comprised solely of housing authority-sponsored Low-Income Housing Tax Credit (LIHTC) transactions.
Leveraging $71.9 million of federal Low Income Housing Tax Credit equity from seven institutional investors for approximately $210 million in total development costs, the Fund preserves and expands affordable housing in local communities for about 1,192 units and consists of eight Low-Income Housing Tax Credit projects sponsored by housing authorities. Housing authorities act as sole developer for five of the projects and partner with co-developers for three of the projects.
Seven projects, or 862 units, are supported by the Housing Credit Enrichment Program, of which 83% will be rehabilitation and 17% will be new construction. The Housing Credit Enrichment Program is an innovative new program sponsored by HAI Group in partnership with Housing Alliance Group, LLC, and RBC Tax Credit Equity Group designed to help housing authorities leverage financial resources and secure long-term control of their sponsored LIHTC-financed developments. Housing Alliance Group, LLC offers credit enhancement benefits that help offset guarantees against construction cost overruns and/or operating deficits to satisfy a portion of financial guarantee obligations and reduce a housing authority’s dependency on developer partners to assume these guarantees.
“HAI Group is proud to play a role in helping housing authorities create vibrant neighborhoods that are affordable to low income households,” said HAI Group President and CEO Ed Malaspina. “Housing authorities have become significant developers of affordable housing and can bring certain advantages to a deal. They have powers under state enabling legislation that extend beyond the operation of federal housing programs to buy and sell real estate, operate rental housing, incur debt and issue tax-exempt bonds, and they have unique access to federal programs such as the Rental Assistance Demonstration (RAD). Their ability to combine local powers and federal assistance make housing authorities uniquely positioned to play substantial roles in the development of affordable housing.”
As rental costs keep rising, and fewer affordable rental units are available, millions of people are left struggling to afford their rent. According to recent reports by the Public and Affordable Housing Research Corporation (PAHRC), nearly 500,000 affordable units may be lost over the next five years. Failure to preserve publicly-assisted affordable housing stock now will cost more money in the long-run. Over 50 years, it would cost $6.4 billion to rebuild and maintain these lost units, compared to $4.8 billion to preserve them. Access to a program that provides tax incentives to encourage equity investment by corporate investors like the Low-Income Housing Tax Credit program is essential to enable public-private partnerships, such as the RBC Tax Credit Equity-HAI National Fund 1, LP, to successfully leverage the financial support necessary to preserve and expand much needed affordable housing in our local communities.
About HAI Group
HAI Group is a family of companies founded by and dedicated to serving the public and affordable housing community. We deliver innovative, tailor-made solutions to protect assets, improve efficiency, empower employees, and move housing strategies forward. Our portfolio includes insurance, capital, research, advocacy, and learning solutions. As a Member-owned organization, HAI Group has positioned itself as a recognized leader and expert in the public and affordable housing industry. Headquartered in Cheshire, Connecticut, HAI Group’s Membership extends across the United States.
For more information about HAI Group, please visit http://www.housingcenter.com.
RBC Capital Markets’ Tax Credit Equity Group has raised over $8 billion of equity for affordable multi-family and senior housing, historic and new markets developments, and has 893 assets and 75,623 housing units under administration located in 45 states, D.C. and Puerto Rico. They are an active syndicator in the LIHTC market looking to partner with developer and investor clients on additional investments in affordable housing nationwide. RBC offers public housing authorities competitive terms for the equity investment. They have closed more than 180 public housing transactions bringing over $1.6B in investment in public housing.
For more information about RBC, please visit http://www.rbccm.com/tceg.
About Housing Alliance Group, LLC
Housing Alliance Group, LLC is HAI Group’s Capital Solution. The association offers unique benefits and programs to associated public housing authorities who engage in expanding and transforming affordable housing in their local community.
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