In a recent webcast, Doug Bibby, president of the National Multifamily Housing Council (NMHC), headquartered in Washington, D.C., joined Jay Parsons and Greg Willett of MPF Research to talk about issues of interest to the multifamily industry.
In discussing the on-going shortage of income-restricted/designated-affordable housing, Bibby emphasized the importance of the Low Income Housing Tax Credit (LIHTC) program. He identified it as the only current government program that is encouraging the production of new and rehab housing for people making 60 percent or less of area median income.
The LIHTC program is presently funded at $7 billion annually but proposals have been made to increase this funding by 50 percent or more going forward. NMHC is strongly encouraging the continued funding and expansion of this program. Part of the challenge in achieving this goal is in educating policy makers on the difference between the market-rate and designated-affordable housing parts of the multifamily housing market. While affordability measures in the market-rate segment may still look good in spite of the recent rapid growth in rents, the designated-affordable part of the market may be restricted by the lack of supply.
Bibby stressed that the long term lack of growth in real incomes has exacerbated the problem of housing affordability.
While legislative activity in Washington is currently at a standstill due to the upcoming election, Bibby indicated that his priorities going forward are in the areas of tax reform and housing finance reform. He pointed out that the tax reform act of 1986 had a deleterious effect on the real estate industry and said that the NMHC is working to see that this is not repeated. He emphasized the critical importance of finance to the multifamily industry and pointed to the fact that both Fannie Mae (FNMA) and Freddie Mac (FHLMC) are projected to run out of capital in 2017 unless congressional action is taken.
While legislative action may be at a lull, Bibby highlighted the potential impact of regulatory action on the multifamily industry. While he was not specific about NMHC’s areas of interest in this interview, areas in which NMHC is active are in insuring the cost effectiveness of energy conservation regulations and in representing the multifamily industry in the development of building codes and sustainability regulations.
In order to support these initiatives, NMHC hired Cindy Chetti as head of its Government Affairs department 5 ½ years ago and has worked to increase its presence on Capitol Hill. NMHC also runs its own PAC, which provides contributions to officials of either party who support the multifamily industry.
A new project of Bibby’s is the NMHC Research Foundation. This is a 501(c)(3) non-profit whose mission is to produce research that will “support the apartment industry’s business interests.” The NMHC website further states that the foundation will study “issues related to development and redevelopment activity, affordable and workforce housing, demographics, tax policy, regulatory environment and zoning and land use.” Bibby thanked RealPage for its recent $1 million contribution to the foundation at the RealWorld conference in July and said that we can expect to see work product from the foundation in late 2016.
In response to a question from the audience, Bibby said that developers looking to get into the designated-affordable housing segment should ask themselves what does their community really need and what role can they play in providing that need. The developer should talk to the local municipality about the tools that they have at their disposal and try to figure out the role he can best play.