No huge drop-off coming: Multifamily market expected to remain hot into 2023

Renters and investors are still seeking out multifamily space. And the demand for apartment living is showing no signs of slowing, according to Kia Crooms, area vice president of the Midwestern region for King of Prussia, Pennsylvania-based Morgan Properties.

We spoke with Crooms about the enduring strength of the multifamily market and why Morgan Properties is eager to expand its apartment holdings in the Midwest. Here is what she had to say.

Why has demand remained so strong for multifamily properties for so long? What are the factors fueling the long hot streak of this asset class?
Kia Crooms: The economy has certainly helped. There has been excellent job growth in the United States. Wages for individuals continue to rise. People have access to cash. At the same time, the supply chain issues persist. That makes it difficult to build as many new homes as people want. Renting, then, is a great option for people today.

Housing prices are high, too. That is inspiring more people to rent. We are seeing an excellent retention ratio when it comes to lease renewals. Folks are even selling their homes, taking out the cash, and downsizing to apartments and townhomes. They want the lifestyle and the lack of maintenance that comes with renting instead of owning.

What about rising interest rates? What impact is that having on the number of people who want to rent instead of buy?
Crooms: When interest rates are higher, people are more likely to rent. But our investors are still excited about multifamily properties, too. Our investors continue to be excited about different markets, especially when it comes to the Midwest. There are many markets in the Midwest that are always strong.

Morgan Properties has made several recent multifamily acquisitions. We entered the Indianapolis market with a property of more than 2,100 units. We have also recently entered the Chicago suburbs with purchases in Elgin, Palatine, and Schaumburg. We continue to find ways to build our portfolio.

Why make the move to Indianapolis? What attracted you to this market?
Crooms: As an organization, we are oversaturated with properties in the East Coast and Sunbelt regions. Indianapolis was an untapped market for us. We like the growth potential in the Indianapolis area. There are some good meat-and-potatoes properties there when it comes to Class-B assets. There is a Class-B market there that is untapped and in our wheelhouse. We do that section of the market well. We like to buy those properties and add value to them.

–          Morgan Properties’ The Gates of Deer Grove in Palatine, Illinois.

What are renters looking for today from multifamily properties?
Crooms: Coming out of a pandemic, people are now looking to be outside. They are looking for more space. They are looking for everything from outdoor kitchens and grilling spaces to fire pits that they can use in the evenings. They want to really live and gather with family and friends. That’s why we like the Class-B garden-style apartment communities. There are so many value-add opportunities. We can add a lot to the outdoor spaces in these communities.

The way people are living today, things like dog parks have become more essential to folks. They want that off-leash exercise for their furry friends. They want open kitchens outside or splash parks in tandem with swimming pools. Anything that involves spending time with family and friends is important today.

There is no one-size-fits-all list of amenities, though. What works in Michigan might not work in New Jersey.

Speaking of the pandemic, it seems like the multifamily sector held up really well even during the worst days of COVID and that the sector has emerged even stronger today.
Crooms: There were some industries that were hit hard by the pandemic, such as hospitality and retail. We did see some softness when it came to rent collection, but our team members were good at being that expert when it came to helping people source those funds. The government and other agencies offered financial assistance that we could connect people to. There were no off days for our staff during the pandemic. We were there to be of service to the residents.

Today, many renters are staying in place and renewing their leases. Many are doing this because they are nervous about making the move to buying a single-family home with how the interest rates are rising. They might not have the money for a down payment. This all makes multifamily a strong option for people.

Do you plan on acquiring more properties in the Midwest?
Crooms: We do. We are always looking for growth opportunities. Even if we wanted to rest, our investors and employees won’t allow it. It is so lucrative out there now in the multifamily space. We are interested in those value-add opportunities where we can find more meat on the bone by upgrading apartments and townhomes and the amenities in those spaces. That is in our wheelhouse. That is where we win and where we are always looking to expand and grow.

Do you upgrade these Class-B properties enough to turn them into Class-A space?
Crooms: Sometimes that does happen. It depends on the spend and the demographic we are trying to serve. It’s about what the market dictates for a property. We want to make the changes that people want to see, bring in what has been missing from a development. That’s the recipe. We’ve done it over and over, but every property is different. The same amenities don’t work everywhere. We do our due diligence when it comes to the market. We study what people want to see.

The multifamily market has been strong for so long. Do you see demand for apartments, from both renters and investors, continuing to hold steady or rise throughout the rest of this year and into next?
Crooms: We will continue to see strong numbers. Some markets might soften a bit, but I don’t see any huge drop-off happening. The supply chain issues have not been fixed yet when it comes to building new single-family homes. We still don’t have enough housing to get everyone’s heads into beds. Adult children who moved back with their parents will be leaving again to find their own places to live. People are branching out and getting their own apartments and townhomes. One household is now becoming two. Do I see occupancy in the multifamily sector softening a bit? Sure. But I don’t see a huge drop-off. Our occupancy numbers and demand for apartments will both remain high.

 

Source: No huge drop-off coming: Multifamily market expected to remain hot into 2023

https://www.creconsult.net/market-trends/no-huge-drop-off-coming-multifamily-market-expected-to-remain-hot-into-2023/

Commercial Real Estate Symposium October 25 2022 7 a.m. – 3 p.m. PT

Commercial Real Estate Symposium
October 25, 2022
7 a.m. – 3 p.m. PT

Hear from the industry’s top leaders, national economists and thriving entrepreneurs on the future of commercial real estate.

Register now for this FREE event.

Agenda

7 a.m.
Welcoming Remarks
James Huang, President, eXp Commercial

7:15 a.m.
Entrepreneurship and Small Business Financing
Charles Rho, President, VelocitySBA

8:00 a.m.
Using AR/VR Technology to Attract Investors to Your Property
Matt Bonds, U.S. President, RealSee

8:30 a.m.
The Future of Technology in Commercial Real Estate
Duke Long, Second Century Ventures
Obie Walli, CEO, Dealius
Ember Erickson, Co-Founder and Head of Revenue, Biproxi

9:00 a.m.
Inclusion in Commercial Real Estate
Jessica Nieto, ONEeXp
Donnel Williams, President, Black Real Estate Professionals Alliance
Desiree Patno, CEO, NAWRB

9:30 a.m.
Comparing Business & Real Estate Brokerage
Kylene Golubski, Executive Director, IBBA
Neal Isaacs, VR Business Brokers

10:00 a.m.
Corporate Services, RELO and Commercial REO
Dawn Conciatori, Vice President Referral Generation, eXp Realty
Eric Powers, CEO 7LCRE
Fred Schmidt, Managing Partner, Valuation Alliance

10:30 a.m.
State of the Commercial Real Estate Industry
KC Conway, Founder and President, Red Shoe Economics

11:30 a.m.
Global Opportunities in Commercial Real Estate
Meghan Kelley, VP Global Operations, eXp Realty
Renata Sujto, Broker of Record – International, eXp Realty
Samuel Caux, Managing Broker, France, eXp Global
Andrew Thompson, Designated Managing Broker, South Africa, eXp Global

12:00 p.m.
The Coming Digital Asset Disruption and How it Impacts Commercial Real Estate
Olivier Manuel, President, Rich Devices

12:30 p.m.
Vylla Title
John Tavarez

1:00 p.m.
JTC Americas
Justin Amos

1:30 p.m.
O’Connor Tax Reduction Experts
Shalonda Marshall

2:00 p.m.
TransGlobal
Philip Hu

2:30 p.m.
CommLoan
Jonathan Mangiapane

https://www.creconsult.net/market-trends/commercial-real-estate-symposium-october-25-2022-7-a-m-3-p-m-pt/

How To Lower Your Taxes As a Real Estate Investor

1031 Exchanges, Delaware Statutory Trusts, Opportunity Zone Funds, and Other Tax Reduction Strategies

When it comes to tax avoidance strategies, most real estate investors are probably familiar with the 1031 “like-kind” exchange, in which an investor can defer a tax liability — capital gains, depreciation, or even state and local income tax and the 3.8% net investment income tax — from the sale of a property by acquiring a similar investment property.

Essentially, this allows you to sell one property and purchase another without paying any taxes, provided you follow basic rules.

For example, one requirement is that you identify the replacement property within 45 days of the sale and conclude the purchase of the replacement property within 180 days of the sale.

Some investors even take the “swap until you drop” approach, whereby they continue to sell properties and acquire new ones without ever paying taxes on the sales.

In addition to the tax deferment benefits, a 1031 exchange gives your heirs a step-up in basis to current market value when you pass away.

For example, imagine that you purchase a property for $500,000, and it is depreciated over 20 years. The property is now valued at $2 million, and you and your spouse pass away. Your heirs would automatically receive a step-up in basis to $2 million, so they can sell the day after you pass away and pay no taxes.

There is one problem with 1031 exchanges for many investors, and that is the current frenetic property investment environment.

While the present market might allow an investor to sell their property at a record high, they will also be in the position of having to pay a steep price for their replacement property.

And with the 45-day clock ticking in the background, many investors may not have adequate time to identify a suitable replacement property. This kind of fevered market can lead investors to make less than sound choices. As my college property and tax professor, Dr. George Earl, once said: “Tax savings don’t make a bad investment decision good. It only makes a good investment decision better.”

The good news is that there are alternatives to the traditional 1031 exchange.

Delaware Statutory Trust

Instead of reinvesting the proceeds of your property sale into another investment property, you could exchange those proceeds into a Delaware Statutory Trust (DST).

A DST is a legally recognized trust that has been established to conduct business. Many DSTs hold institutional-grade properties; in this sense, they are similar to a real estate investment trust (REIT), but they offer investors the option to invest in them as part of a 1031 exchange, which is typically not possible with a REIT.

A DST has several important advantages. Firstly, it eases issues stemming from the time constraints of the 1031 exchange, as it is simpler (and quicker) for investors to identify an appropriate and established DST than a replacement investment property, particularly in the current climate.

Secondly, it enables you to remain invested in real estate as an asset class without the stress and time commitment of being a landlord. It can also be a particularly viable solution for investors whose mortgage exceeds their tax basis in a property.

DSTs generally require a five- to 10-year time commitment. They typically distribute income and potentially offer the opportunity for capital gain (or loss). However, to qualify for a DST, you must be an accredited investor.

Opportunity Zone Funds

Another option that investors should consider is a qualified opportunity zone fund (OZF). An advantage of this strategy is that it allows you to invest just your capital gains and your depreciation recapture. This enables you to sell the property, withdraw your tax-free basis and defer the additional taxable funds. Some (though not all) states are supporting these tax breaks by ensuring the state and local income tax rules are aligned with the federal tax regulations.

By investing in an OZF, you defer your taxes on the eligible capital gains (realized within the last 180 days) until the tax year 2026 (April 15, 2027 filing deadline). If you invest in an OZF before the end of 2021, you will also receive a 10% step-up on a cost basis. Many OZFs also structure a cash-out refinance of approximately 30 – 45% in time to pay your deferred tax bill by April 2027.

As with a DST, OZFs can provide annual income (generally from year four or five through to year 10). Further, if the property is held for 10 years (and one day), it receives a step-up in basis for both appreciation and depreciation. This means that the property could be sold without triggering any capital gains tax liability.

However, similar to a DST, it’s important to conduct due diligence on both the underlying investment and the manager of the fund. OZFs typically represent a 10-year investment structure, and you must be an accredited investor.

Deferred Sales Trust

One lesser-known but potentially beneficial option is a deferred sales trust. With a deferred sales trust, you can sell your highly appreciated assets, including investment properties, primary residences, vacation, and second homes, and defer the capital gains taxes and depreciation recapture taxes — perhaps indefinitely.

In a deferred sales trust, you are not the owner of the trust; you are a promissory note holder against the assets of the trust, and the trust makes payments to you. To effect this, you would sell your investment property to the trust, and the trust, in turn, would sell the property to the end buyer. The proceeds of the sale are paid to the trust at the time of closing on this simultaneous transaction.

One significant advantage of this approach is that an investor doesn’t have to contend with the 45-day time constraint inherent to 1031 exchanges. But there are other attributes to consider.

What if you could use the funds from a sale in 2021 to buy real estate later without having a tax liability? Imagine if you sold a property in 2007, at the peak of the last cycle, and you were able to park the money on the sidelines and then use it to acquire properties in 2010?

There are many different ways to structure a deferred sales trust, and it can even potentially be used in combination with a 1031 exchange or paired with an OZF. The deferred sales trust can be structured to pay just interest payments on your promissory note or principal and interest payments. If you choose principal and interest payments, then you would be responsible for some of your capital gains taxes and depreciation recapture taxes, if applicable.

But most investors that avail themselves of a deferred sales trust structure choose interest-only payments that are taxed as ordinary. This lessens your cash flow from the trust, but it also ameliorates your tax burden by deferring taxes owed on capital gains and depreciation recapture.

Deferred sales trusts are structured to run for 10 years, but they can be easily extended for multiple additional 10-year cycles. It’s worth noting that deferred sales trusts are a bit more complex than some other vehicles or strategies that investors might be considering, and there are carrying costs and trust establishment fees to contend with, as well. But, if you have capital gains that exceed $500,000, this could be a viable option to consider.

Whatever tactics you elect to utilize, the most important thing is to weigh these strategies against your short- and long-term objectives for the property, as well as your overall portfolio.

Tax strategies should be merely one facet of a holistic approach that fosters enduring value for your assets.

 

Source: How To Lower Your Taxes As a Real Estate Investor

https://www.creconsult.net/market-trends/how-to-lower-your-taxes-as-a-real-estate-investor/

Why One Industry Vet Says Now Is The Golden Age Of Multifamily Investment

‘Quite simply, multifamily performs,’ says Capital Square CEO and founder Louis Rogers ahead of GlobeSt’s Multifamily Conference in October

There’s never been a better time to deploy capital into the multifamily asset class, according to one industry veteran, who says now is the “golden age” of multifamily investment. 

 “We are truly in an incredible time,” says Louis Rogers, founder, and chief executive of Capital Square. “It’s easy to raise money for DSTs, REITs, LLCs, and Opportunity Zone funds.  We’re all investing in multifamily because quite simply, multifamily performs.” 

Rogers oversees Capital Square’s Delaware statutory trust programs for investors seeking qualifying replacement property for Section 1031 tax-deferred exchanges and regular (non-exchange) investors. A nationally recognized authority in structuring securities offerings for real estate investments, Rogers will offer his insights on how to raise capital for multifamily investments in a special session on Tuesday, October 25, at GlobeSt’s Multifamily conference in Los Angeles.

 

“Multifamily performance has been off the charts during the pandemic,” Rogers tells GlobeSt.com, noting that Capital Square has seen rent collections hovering between 99% and 100% each month from 2020 to the present. “Performance has been better than ever and better than pro forma.”

That’s particularly been true for markets across the Southeast and the Sun Belt, which have benefited from pandemic-era migration patterns away from gateway cities and companies like Tesla and Amazon laying down HQ stakes in the region, he says.

“So much has happened to make housing popular in the Southeast and Texas, and then you add to that a housing shortage of 4 million units,” he says.  “And the result is that it’s really the golden age to raise money for multifamily investment because this asset class performs phenomenally well – in spite of a global pandemic bringing life to a complete standstill and adversely impacting other asset classes.”

 

Rogers says Capital Square, which is headquartered in Richmond, Va. (“definitely below the radar screen”) likes smaller cities and secondary markets like Richmond, Chattanooga, Virginia Beach, and Jacksonville when it looks for investment targets.

Housing unaffordability is also a piece of the equation, Rogers says, as consumers have likely exhausted their pandemic-era savings, and mortgage rates have increased significantly as prices also skyrocketed.  And that means that more consumers will be looking to rent the nicest home they can afford while they build credit and a down payment toward a property of their own.

When the pandemic hit, Rogers says, “people said prices needed to go down, and they didn’t. They stayed the same.” And after a few interest rate increases, prices cooled a touch – but “the asset is so strong, and the economics so strong, that in spite of a recession, inflation, and a pandemic the rent actually increased while occupancy was near 100%.”

 

Rogers says he expects rent increases to level off but notes that Capital Square “always models” off 3% rent growth, “and we expect we’ll move back toward the mean, which is perfectly fine.” He isn’t worried about rent increases settling into a normal range, he says, because “multifamily does just fine under all circumstances, good and bad.”

“In the Great Financial Crisis, we saw thousands of office buildings that were lost in foreclosure,” he says. “I can’t think of a single apartment community with a normal amount of leverage that was lost. Multifamily offers the perfect scenario: you can lower rent, offer concessions, and stay afloat. You can always adjust.”

“Cap rates are very low,” he says. “And institutional investors are not seeking the highest yields; they seek reliability and stability for the long haul. That’s what you get with multifamily.”

 

Source: Why One Industry Vet Says Now Is The Golden Age Of Multifamily Investment

https://www.creconsult.net/market-trends/why-one-industry-vet-says-now-is-the-golden-age-of-multifamily-investment/

5 Incentives to Increase Multifamily Lease Renewals

Resident retention remains a high priority, and these five incentives can help earn renewals.

5 Incentives to Increase Multifamily Lease Renewals -

It costs a whopping $3,976 to replace one of your residents when they don’t renew their lease, which is up from $3,850 last year, according to Zego’s “The 2022 State of Resident Experience Management Report.”

One of the most valuable assets to any apartment manager is current residents and, as such, resident retention should be one of the highest priorities. To do that, you need exciting apartment renewal incentives to remain competitive. Here are five renewal incentives to try:

1. Free Apartment Upgrade

While it may not be possible to avoid increasing rents in the community, one way to incentivize residents to renew their leases is by offering more value. That value could be presented as an apartment upgrade for the same rate or at a discounted rate from their current apartment.

The upgrade does not always have to be a larger apartment, it could be in a better location at the property or one that includes an in-unit washer/dryers and a balcony or patio. And if you don’t have any available upgrades, you can offer to improve your resident’s current apartment as an incentive. For example, upgrading the appliances is a great way to elevate the apartment and even justify a rent increase.

2. Resident Events

According to Satisfacts, resident events are one of the significant drivers of lease renewals. Resident events can help establish stronger connections and relationships between residents, which can improve a community’s turnover rate.

However, planning a successful resident event is much easier said than done — especially for the busy multifamily marketing professional.

Here are a few resident event ideas:

3. Free Month of Rent

Once you lose a resident, that means you have to start over by building trust and a relationship with the new resident.

Consider incentivizing your best residents because one significant reason someone might not renew their lease is financial concerns. A free or discount on their first month’s rent could mitigate those worries.

4. Invest in Smart Locks

While you can never promise 100% safety and security anywhere, you still want your residents to feel safe and relaxed in their homes. Upgrading your property with smart locks or controlled, gated access can offer them peace of mind (and justify a rent increase, if needed).

5. Concierge Services

Residents value convenience any way they can get it. From partnering with dry cleaners or grocery delivery apps, there are many ways to offer concierge-style services at the community. These added services can help incentivize renewals as well as justify a rent increase, especially if you add multiple services.

For example, consider integrating convenience or property management apps on a resource page on your website, along with discount codes to use the services. Millennials and Gen Z are accustomed to these mobile conveniences, and there’s no reason their multifamily property can’t offer the same.

Add Convenience and Value to Earn Renewals

Ultimately, when it comes to resident retention, convenience is key. Moving out of an apartment is stressful. Nobody wants to move if they can avoid it; avoid providing a reason for residents to not renew their lease. If it’s more convenient for your residents to stay in their apartment, then they will, but it’s up to the property team to earn that renewal.

Source: 5 Incentives to Increase Multifamily Lease Renewals

https://www.creconsult.net/market-trends/5-incentives-to-increase-multifamily-lease-renewals/

Higher-Income Renters Pay the Biggest Rent Hikes and are Least Likely to Miss a Rent Payment

Here’s one of the most widely misunderstood realities of rental affordability: The renters seeing the largest rent hikes are upper-income households in the most expensive rentals, and despite larger rent increases, they’re least likely to miss a rent payment.

On the flip side, rent payments have fallen the most in subsidized affordable housing – where rents have grown the least, since those rents are typically set to a share of income.

So it’s not all about the rent, clearly. Yes, rent growth is a big part of the equation. But its impact tends to be mischaracterized and overstated.

The average renter in market-rate Class A and B units has seen rents increase 14 to 15% since March 2020, according to RealPage Market Analytics. (These are actual in-place rents, not asking rents.) Those renters are paying 96% to 97% of the rent due each month, which is off 1 percentage point from pre-COVID levels.

Why are these renters able to keep paying higher rents at essentially normal levels? Well, it all comes back to income. Class A and B renter households have seen incomes rise nearly as fast as rent (among new lease signers, where income is tracked at signing). A typical Class A renter household (including roommates) now has annual income of $135,000, while a typical Class B renter household is $99,600.

It’s a different story in Class C, also sometimes called “workforce housing.” Household incomes in Class C have grown, too, but annual wages remain lower at $62,000. While Class C in-place rents grew a lesser (but still significant) 10% since March 2020, we’ve seen a bit more distress in this group. Class C rent collections were lower than Class A and B pre-COVID, and that gap has widened a bit more since COVID hit.

And it’s even more challenging in the subsidized Affordable Housing space. Affordable housing typically locks the rent at a level relative to income (specific programs can vary). But that rent stability hasn’t been enough to help all Affordable renters. In fact, rent collections have fallen about 4 percentage points since COVID hit to just under 87%.

Three Takeaways:

1) Renters in Class C and Affordable are most price sensitive, but it’s not all about the rent. When other consumer costs skyrocket (like groceries, up 13%), there’s less money available to pay rent for some households.

2) Renters making the highest incomes tend to pay the largest rent increases. This is why it’s SO CRITICAL to segment the rental market. Too many pundits paint it with a very broad brush that distorts the facts around rental affordability.

3) No matter how you slice it, actual rent collections are significantly higher than what the experimental and tiny Census Household Pulse Survey is showing. The Census itself warns that their rent payment surveys have major statistical holes, yet those warnings are routinely disregarded by those who use their data.

What Does This Mean for the Road Ahead?

Despite headlines to the contrary, rental affordability has been more of a tailwind than a headwind – particularly for the market-rate, professionally managed rental housing sector. We detailed rental affordability in depth in a study released in July examining rents and incomes from 7 million leases – the largest-ever study on rental affordability. In the report, we noted some of the reasons why market-rate renters have outperformed the government’s national averages for wage growth.

But the road ahead is less clear. Rent growth is mitigating to more normal levels. Resident retention rates are moderating back down from all-time highs. Rising mortgage rates, contrary to conventional wisdom, are not boosting demand for rentals. In fact, we’re on track to record net absorption well below the record peaks of 2021 (though still at healthy levels). And eroding consumer sentiment amidst inflation appears to be eating away at household formation and housing demand.

On the positive side, job growth remains strong in most markets – and unemployment very low. Those are strong tailwinds for continued wage growth.

In any scenario, though, it’s unlikely renters will face anything like the COVID-era lockdowns that resulted in 20 million job losses. Even then, rent collections held up much better than expected – long before stimulus and rental assistance programs kicked in (which helped later on). And while consumer costs are much higher now due to inflation, that recent history of renter resilience is a good indicator should the economy sputter again.

 

Source: Higher-Income Renters Pay the Biggest Rent Hikes and are Least Likely to Miss a Rent Payment

https://www.creconsult.net/market-trends/higher-income-renters-pay-the-biggest-rent-hikes-and-are-least-likely-to-miss-a-rent-payment/

HUD Announces Increased Payment Standards, More Vouchers | National Apartment Association

On September 1, 2022, the U.S. Department of Housing and Urban Development (HUD) released its updated fair market rents (FMRs) for fiscal year 2023. Each year, HUD updates the FMRs to, among other things, set a reasonable payment standard for public housing agency (PHA) payments to housing providers participating in the Section 8 Housing Choice Voucher (HCV) program. Nationally, the average FMR increased by about 10 percent.

This update to payment standards comes at a critical time when pandemic recovery, inflationary pressures, and the massive housing shortage have forced average rents up across the country. For example, FMRs in Phoenix will increase by 33 percent in response to significant demand.

“These new FMRs will make it easier for voucher holders facing this challenge to access affordable housing in most housing markets while expanding the range of housing opportunities available to households,” said HUD Secretary Marcia Fudge in a press release.

Here are some of the key takeaways from the announcement.

New Data sources

Typically, HUD utilizes the Census Bureau’s American Community Survey (ACS) to estimate the 40th percentile gross rents of households that recently moved into an area. This often provides an accurate picture of near-median rents for new leases. Last year, however, the Census Bureau announced that it would not release the estimates from the 2020 ACS because the COVID-19 pandemic had interfered with data collection.

Instead, HUD supplemented private market data to maintain the accuracy of the FMRs, sourcing data from RealPage, Moody’s Analytics, CoStar Group, CoreLogic, Apartment List and Zillow, as examples. Industry groups, including NAA, raised concerns about the use of this data. Using private data precludes stakeholders from checking to see if the data are consistent across time and location, and if they are representative of the population in question rather than collected based on the company’s anticipated ability to sell them. HUD is expected to use solely once again the ACS data in the following years.

New Vouchers

In addition to higher rates, HUD will award approximately 19,700 new Housing Choice Vouchers to PHAs. This increase is made available by the Consolidated Appropriations Act of 2022 which was signed into law on March 15, 2022. HUD has sent a notification to eligible PHAs informing them of the new vouchers providing a deadline of September 2 to accept or decline the increase.

Policy Outlook

The National Apartment Association (NAA) urges policymakers to adopt responsible and sustainable housing policies. Additional vouchers and FMR increases are desperately needed for low- and moderate-income households and housing providers who have been thrust into financial uncertainty amid economic turmoil due to the pandemic.

 

Nevertheless, there is more to be done. The HCV Program is fraught with payment delays, impractical inspection requirements and administrative red tape which makes housing provider participation infeasible in countless markets. To help address the industry’s concerns, NAA continue to prioritize and encourage support for the Choice in Affordable Housing Act (S. 1820/H.R. 6880), introduced by Senators Chris Coons (D-DE) and Kevin Cramer (R-ND) in the Senate, and by Representatives Emmanuel Cleaver (D-MO-05) and John Katko (R-NY-24) in the House.

 

NAA worked closely with the bill’s sponsors to include several industry priorities, which were formulated with NAA member feedback, in the legislation to speed up tenancy approval processes, reduce duplicative inspections requirements and provide better ongoing support for housing provider participants. We look forward to continuing this work with Congress and the Administration to advance the industry’s advocacy goals and responsibly and sustainably address the nation’s housing affordability challenges.

 

For more information on Housing Choice Voucher Program policy, please contact Ben Harrold, NAA’s Manager of Public Policy.

 

Source: HUD Announces Increased Payment Standards, More Vouchers | National Apartment Association

https://www.creconsult.net/market-trends/hud-announces-increased-payment-standards-more-vouchers-national-apartment-association/