Industry Trends and Takeaways for 2020
Mission The NHP Foundation is a not-for-profit real estate organization dedicated to preserving and creating sustainable, service-enriched multifamily housing that is both affordable to low and moderate income families and seniors, and beneficial to their communities.
DESPITE THE CURVEBALLS THROWN ITS WAY, the business of affordable housing weathered 2020 with deals in place, construction continuing and rents, mostly, collected. As with any tumultuous year, 2020 was very much a year of opportunities and challenges. Business challenges presented in 2020 included significant increases in construction costs linked to a scarcity of both materials and labor. Delays in construction were common especially for acquisition/rehab deals. With tenant-in-place rehab no longer possible, relocation costs increased significantly. Covid-19 financial consequences also affected the already resource-challenged states and cities in all our markets and made applying for existing resources significantly more competitive, delaying some projects. And all major markets continue to face an affordable housing crisis exacerbated by Covid-19. Our constituents, low income families and individuals, faced more housing challenges and in many instances risk of losing their homes or homelessness. On the bright side, 2020 saw important housing legislation take effect including passage of the long-awaited LIHTC 4% floor. The industry welcomed a new administration looking to increase affordable housing demonstrably. The new lawmakers already included housing in their latest infrastructure bill. Events of 2020 also demanded action on Diversity, Equity, Inclusion, and Social Justice and the affordable housing world is responding with self-evaluation and improved DEI policies and practices. The significant drop in interest rates helped offset increased costs from Covid-19 on a number of deals closed in 2020, this same drop also provided opportunities to refinance existing loans, even fairly recently closed loans with large pre-payment penalties, to achieve lower debt service costs. On balance, Covid-19 forced several hard decisions and reckonings from which we are emerging stronger than ever. In the words of President Franklin D. Roosevelt on the subject of challenges, “We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.”
Vision A future where
communities flourish because attractive, sustainable housing options and life- enhancing services are ensured for income-challenged Americans. Values NHPF seeks to promote greater diversity, inclusion, racial equity, and social justice in addition to its long- established mission of providing sustainable, service-enriched affordable housing. NHPF is committed to increasing access to opportunities for historically underrepresented individuals and businesses in the development and operation of affordable housing communities.
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