Affordable housing developers and their financial partners are working hard to close private-activity bond (PAB) deals in the final weeks of the year.

The fourth quarter is typically a busy time for the low-income housing tax credit (LIHTC) industry, but there’s even more urgency this year. The tax bill passed by the House eliminates PABs, a critical tool in financing the production and rehabilitation of affordable housing. The Senate tax bill retains bonds, so it’s left up to members of both houses to reconcile their differences.

Beacon Communities purchased National Development Corp. (NDC) and its portfolio with an estimated value of more than $250 million. The Boston-based company is the new owner of NDC’s 59 properties built in the 1970s and 1980s, the majority of which are affordable. The transaction expands Beacon’s unit count, but also its geographic presence and team members.

For today’s residents and consumers, technology is merely a means to an end—convenience is the true Holy Grail. At the touch of an app, we can summon a ride, schedule a house cleaning, order dinner or meet “the one.” For multifamily designers and developers, that means upping the amenities game or even changing it completely to provide real-world, tangible value to overworked, time-strapped residents.

In our latest report on multifamily and vertical living, CallisonRTKL harnessed the collective imaginations of our design teams around the world, and examined the latest research on U.S. markets, demographics, sustainability, technology and consumer preferences to find out what amenities will resonate with the most renters. What amenities do we see in almost every development, which ones are reserved for exclusive properties and what will these look like in the next five to 10 years?

The multifamily market is constantly changing, with some metros thriving while others are low in demand. In the National Apartment Association’s Q2 Market Momentum Report, industry experts were surveyed about their business plans, expectations and trends in the industry. Paula Munger, director of industry research & analysis for NAA, spoke to Multi-Housing News on some of these predictions and what certain markets should work on in order to offer more opportunistic growth. 

Contrary to predictions, total U.S. construction spending dropped 1.4 percent in April compared with the previous month, coming in at an annualized rate of just over $1.218 trillion, according to the Census Bureau on Friday. Even so, compared with a year earlier, total construction spending gained 6.7 percent.

Both private and public construction spending declined for the month, though the public sector drop was steeper (as has been the case). Private construction spending was down only 0.7 percent from March, with private residential construction also down 0.7 percent, and private nonresidential construction off 0.6 percent. Spending on public construction projects was off 3.7 percent for the month.

The housing shortage is a prevalent issue across the nation, with some cities struggling more than others. “The Housing Paradox” session during ULI’s 2017 Spring Meeting in Seattle explored how the housing shortage has come to be and what steps need to be taken in order to alleviate this problem. Cities such as Houston, which is the fourth biggest city in the country, and Chicago, both have rising incomes and strong population growth without a spike in housing prices. “Why can’t we build enough housing to match job growth? The answer is actually very short: We can,” said Alan Durning, executive director & founder of the Sightline Institute.

Seattle’s vibrant economy has produced job growth in a broad range of sectors, supporting housing demand and kickstarting an apartment boom. Nearly 10,000 new units are planned to debut this year. Despite the surge in supply, affordability remains a concern, increasingly driving renters and investors out of the city’s core and submarkets into the farflung suburbs.

For months, western markets have led the nation in year-over-year rent growth, according to Yardi Matrix’s monthly rent survey. From Seattle to San Diego, many tech-driven, Millennial-attracting markets have experienced continuous rent growth above previous averages.

Sacramento, in particular, has led the way, as growing demand is met with limited existing stock and low supply growth, forcing annual rent growth above 10 percent in recent months. Overall rent growth in the California capital fell back into the single digits in February for the first time since June 2016, and sits at 9.4 percent on a year-over-year basis in March. Strong gains in education and health services employment (4.2 percent) and professional and business services employment (4.3 percent) support the outsized rent gains. Affordability issues in nearby San Francisco and Oakland are also helping the Sacramento market as some residents are choosing cheaper rents, despite the significant commute to the Bay Area.

A growing number of renters are optimistic about their financial situation and expect to stay where they are even if their rents increase, the research findings, released Monday, show. Also of note, a declining number of renters say they're working toward homeownership, expect to buy a home, or plan to move within the next few years.

Feeling Wealthier
Since Freddie Mac’s last renter survey, in September 2016, renters' sentiments about their financial situation have trended upward. In fact, 41% of renters now say they have enough money to last beyond each payday, up from 34% in September, while those who say they can't afford essentials fell, from 20% to 14%. The percentage who say they have enough to cover their expenses from payday to payday is relatively unchanged, at about 45%.

No matter the location or age group, financial confidence rose among renters in the latest survey. The biggest increases occurred in rural households, up from 27% to 46%, and baby boomers, up from 38% to 48%.

Washington, D.C.—Construction spending in January fell 1 percent to $1.18 trillion compared to $1.19 trillion in December 2016, according to the U.S. Census Bureau. However, residential construction spending grew by 0.5 percent to $476.4 billion, the highest level since August 2007, according to statistics from Trading Economics.

Is the growth in residential development a sign that we are at cycle peak? “Yes, we expect multifamily completions to peak in 2017. We’ve already seen weakness in starts and permits data, meaning that construction will start tapering off in 2018,” Paula Munger, director of industry research and analysis at the National Apartment Association, told Multi-Housing News.

There’s no disputing the growth in the multifamily market over the past few years. Cranes have been visible in big and small cities across the country and 2016 was the first year in a decade that more than 300,000 units were delivered, according to the National Multifamily Housing Council (NMHC), which says 300,000 to 400,000 units are needed each year to keep up with demand.

The level of demand varies from market to market, naturally, but multifamily developers everywhere are still looking to do what they do best: develop. The trouble for some, though, is these projects cost (a lot of) money, and before cranes and crews can get to work, the proper financing needs to be secured.Lately, that has become a sticking point.

The weeks since the presidential election have been times of uncertainty because of the unpredictability of the new administration's actual plans. As we all struggle to parse campaign rhetoric from true intentions, it's no wonder that concerns over the future of the low-income housing tax credit (LIHTC) are growing. But the LIHTC is not the only tax credit under threat that is beneficial to low-income housing advocates.

The federal historic tax credit (HTC) incentivizes private investment in the redevelopment of historic properties. In many cases, these properties are used to create affordable housing in communities out of properties that were previously in decay. Without the incentive of the HTC, among other tax credits, market forces would drive investment away from historic properties, which make up a significant portion of the real estate in urban neighborhoods and suburban and rural downtowns, leaving the properties to be a community eyesore instead of contributing to local redevelopment and increases in local tax revenues.

Apartment Investment & Management Co. is suing Airbnb, making it the first major landlord to take legal action against the home-sharing company. AIMCO, which manages about 50,000 apartments throughout the U.S., filed lawsuits in California and Florida seeking an undetermined amount for losses and damages, the Wall Street Journal reports. 

Crowdfunding has come a long way in a short time in the multifamily sector, as it has in all real estate asset categories. Rising deal volume and demand for alternative sources of capital is helping overcome initial skepticism about the platform’s long-term viability.

“The investment platform is here to stay, as many crowdfunding groups are well capitalized,” said Dean Sigmon, executive vice president & co-director of the Transwestern Mid-Atlantic Multifamily Group. Last year, Sigmon’s team completed two deals with Fundrise, and he expects more such deals “in 2017 and beyond, as smaller investors reap the opportunities to
be a part owner of multifamily properties.”

US homebuyers are most concerned about rising interest rates, but they still plan to go ahead with their initial buying plans, according to survey results released by Zillow Group Mortgages.

"Most people (83 percent) planning to buy within the next three years will continue with their homebuying plans even if rates increase their monthly mortgage payment by $100," Zillow said in a press release.

Higher rates would, however, limit buyer choices. According to Zillow, "a quarter of home shoppers claim they would reconsider the type of home they are searching for, such as looking for a smaller home or less expensive community, should their monthly payment increase by up to $100 (25%)."

When it comes to the impact of a rate hike on monthly mortgage payments, "for the typical homebuyer shopping for the median US home, valued at $195,300," the company estimated, "an increase in mortgage rates from 4% to 4.25% would increase their monthly mortgage payment by approximately $23."

Among the states, California is likely to be most affected if the series of rate hikes predicted for 2017 do indeed occur, as the state is home to cities with the greatest rise in monthly mortgage payments (San Jose, San Francisco, Los Angeles, and San Diego).

Here are the 13 US cities that, according to Zillow, would see the highest increase in monthly mortgage payments if mortgage rates were to rise to 5% from 4%.

Federal Realty Investment Trust shares lessons learned from developing office space in urban-style mixed-use projects.

When Federal Realty Investment Trust broke ground on Santana Row in 2000, it set out on a bold mission to transform a drab suburban shopping center in San Jose, California, into a retail, entertainment and residential district boasting a robust urban character. Two years later, just after a huge fire destroyed part of the emerging project, restaurants and apartments as well as local and luxury retailers opened. A hotel, movie theater and condominiums were on the horizon. It appeared that the company was on its way to achieving its vision but for one hitch: Some 50,000 square feet of second-floor retail space had failed to elicit interest.

It turned out to be a worthwhile hiccup.

Federal Realty revamped the space and filled it with office users, and it wasn't long before the office tenants began talking about how much they loved working at Santana Row, with its amenities and public spaces just a short stroll away. The developer originally hadn't envisioned including offices in the project, but it retooled its plans to make room for more daytime users and opened a 65,000-square-foot office building amid the Great Recession in 2009. Despite the tough times, tenants filled it.

The intentional mixing of old and young in social environments is not new in the United States, but it is growing more common, as it becomes ever clearer that both groups learn valuable lessons from the other, and the perceived “communication gap” between the two may, for the most part, be made up (or at least exaggerated).

With regard to housing, it is also ever clearer that designing new models that mix the young and the old is becoming necessary, as affordable housing options for both groups don’t exist on the scale needed (Shelterforce's upcoming Aging issue discusses these challenges), and some programs are creating viable options.

An example of such an option is in a retirement home in a town in the Netherlands that offers local university students free housing in exchange for spending time with its senior residents. They accompany them on shopping trips, play games, or simply spend time and talk. Ironically, the article notes that retirement homes in many European countries lack the units to accommodate their aging populations, but the Dutch government’s budget cuts have made affordable units hard to come by, and so rooms in the homes are being left empty. The six students in this housing program are very happy to be living rent free and spending time doing something the author says many of them would be doing anyway in the Netherlands’ volunteer-oriented culture.

Two U.S. apartment markets are the most expensive in the world for apartment dwellers, even more so than traditionally high-rent markets such as Hong Kong, Singapore and Geneva, according to a new report by U.K.-based online realtor Nested