Washington Hotline - March 5, 2009

Carried Interest Among Items in President's Proposed Budget

After the President announced his budget plan last week including proposals to help pay for a $634 billion health care fund for the uninsured, NAHB Chairman Joe Robson issued a media statement highly critical of such proposals that affect the housing industry.

The proposals made by the Administration include an increase in taxes on carried interest that could affect the multifamily industry and a proposal  to reduce the value of the mortgage interest and real estate tax deductions that will affect condominum owners and buyers.

“The proposed budget would... tax a ‘carried interest’ as ordinary income, which could significantly impact the multifamily and commercial real estate sectors at a time when they are already experiencing a severe downswing. At this critical point in the recession, we should be doing everything we can to stimulate demand in housing and avoid proposals that would reduce housing affordability and further destabilize prices."

NAHB will remain deeply engaged as the budget process moves forward and fight to strip out any provisions that will harm housing, and promote elements that will help small businesses and the housing sector.

For more information on the tax components in the budget, contact Greg Brown at 1-800-368-5242, x8421. For information on specific housing and spending programs, contact Jenna Hamilton at x8407.

Read the full media statement here.

Read the full article in NBN.

NAHB to Host Free Housing Tax Credit Teleconference in March

NAHB is hosting a free teleconference for builders and sales and marketing professionals on how to effectively market the recently-passed $8,000 housing tax credit to prospective buyers. Find out how to use the tax credit to your advantage, attract prospective condo buyers, and learn how the stimulus package can work for you.

HUD Releases TCAP Allocations; Guidance is on Fast Track

The U.S. Department of Housing and Urban Development (HUD) released the grant awards through the Tax Credit Assistance Program (TCAP) that was appropriated through the "American Recovery and Reinvestment Act." 

Allocations by state are availbable on HUD's TCAP webpage which also includes a description of the program and process for making awards. In a conversation with HUD earlier this week, NAHB learned that guidance for this program is on the fast track. Other important items to note are listed below.

• The funds were appropriated under HOME but are not HOME funds; therefore, no HOME regulations apply. No waiving of HOME regulatiions will be required.
  
  
• The funds are, however, federal financial assistance and thus cross-cutting federal requirements, such as the environmental review, do apply. However, builders who may need to use these funds should consider waiting to apply for them until HUD issues its guidance. Proceeding before the guidance is issued may result in conflicts with cross-cutting federal requirements that may be difficult or impossible to resolve.
  
  
• Regarding environmental reviews, HUD is obtaining legal opinions as to whether or not an environmental review can be conducted after the fact – that is, if the land is bought, if construction has started, etc. HUD believes it will be similar or the same as to what is applied to HOME funds. For example, if construction has started already, and a developer applies for HOME, the developer would have to stop work and wait for the review to be done, but they could still get the funds (assuming the environmental review is cleared). Again, no definitive answers are available at this time.
  
  
• The Davis-Bacon provision in the general conditions section applies because even though these are not HOME funds, the money is federal financial assistance; any contract for construction for more than $2,000 requires Davis-Bacon. 

Learn How to Protect Your Business at the Pillars Conference

Take a look at some of the educational opportunities you can participate in while attending the Pillars Conference.

• State of the Multifamily Industry
  Wednesday, March 18  |  8:15 AM - 9: 30 AM (Plenary Session)

When the for-sale housing market is in the midst of a significant correction and near-term risk factors are on the rise for market-rate and affordable multifamily rentals, your company needs a survival strategy that has you poised to thrive once the market recovers. In this session, the CEOs of the industry’s leading multifamily and single-family companies look into their crystal balls while sharing their insights on the best way to ride out the downturn and to take advantage of opportunities that always seem to surface at the bottom of a business cycle.

Moderator:
Steve Patterson, Chief Executive Officer, ZOM Holding, Inc.  

Speakers:
Charlie Brindell, President and Chief Executive Officer, Trammell Crow Residential
George Marcus, Co-Founder and Chairman, Marcus and Millichap Company 
Jeff Mezger, Chairman and Chief Executive Officer, KB Home
Connie Moore, Chief Executive Officer, BRE Properties 
Ron Ratner, Executive Vice President and Director, Forest City Enterprises
Leonard Wood, Founder, Wood Partners 

Concurrent Sessions

• Wednesday, March 18 | 10:00 AM - 11:15 AM
  Debt Market: Getting What You Need
  The rental apartment market has weathered the current economic storm relatively well, yet debt financing remains elusive for even the most experienced and stable multifamily development companies. Those who have managed to get debt financed are looking at tightened underwriting and increased spreads. With Fannie and Freddie in conservatorship and the future of other financial institutions uncertain, what can you expect from the debt market in both the short-and long-term? Our experts will discuss the current state of the capital markets and offer strategies for financing new debt as well as reworking existing deals for affordable, market-rate and for-sale multifamily properties.

Moderator:
Tim White, President, PNC ARCS 

Speakers:
Tom Booher, Executive Vice President, Multifamily Capital for Affordable Housing/LIHTC, PNC
John Daniels, Senior Vice President, Product Delivery, Commercial Real Estate Banking,Bank of America 
Jerry Durkin, Director, Wood Partners 
Michael McRoberts, Vice President, Multifamily Sourcing Division, Freddie Mac 

Wednesday, March 18 | 11:30 AM - 12:45 PM
Equity Financing: Who's Got the Money
With debt markets squeezed, multifamily developers are finding themselves in need of greater equity to get their deals done, but equity is becoming more expensive for both market-rate and affordable apartments. In this session, a panel of equity providers and developers will share where to find the best sources of capital and how to structure deals differently to make them work in the current environment.

Moderator:
Greg Vilkin, Managing Principal and President, MacFarlance Partners 

Speakers:
Daryl Carter, Founder, Chairman and Chief Executive Officer, Avanath Capital Partners 
Jack Kern, Head of U.S. Office, PMM Advisors, LLC
Stephen Zaleski, Managing Director, Multi-Housing Group, CB Richard Ellis Investments 

Wednesday, March 18 | 2:30 PM - 3:45 PM
Finding Opportunities in Distressed Assets
In overbuilt residential markets across the country, developers and investors with unsold condos or problem loans on market-rate and affordable problems are desperately seeking ways to cover debt service or unload their assets altogether. Their problems could be your opportunity. In this session, a panel of experts will offer insight into how well-positioned companies can position themselves now for long-term success by finding value in today’s distressed loans and properties.

Moderator:
Mark Tennison, Executive Vice President, Equity Residential 

Speakers:
Richard Gaudet, Senior Managing Director, GlassRatner Capital and Advisory Group Clyde Holland, Chief Executive Officer, Holland Partners Group
Mary Ann King, President, Moran and Company 

View the full list of education sessions at the Pillars Conference.  View the Pillars Schedule here.

Registration is now available onsite. Download the registration form here. Registration opens at 12:00 PM, Tuesday, March 17.

Resources: Spring Spokesperson Training — Be an Industry Advocate

Register Today!
Online registration is now available for the NAHB Spokesperson Training one-day sessions — “Interview Skills” and “Presentation Skills” — at the upcoming NAHB spring board of directors meeting in Washington D.C. in May.

In "Interview Skills," NAHB members will learn how to give clear, concise answers in a high-pressure, spur-of-the moment interview. “Interview Skills” will help participants master strategies for broadcast and print interviews, including message development.

Spring Board Spokesperson Sessions:

• "Interview Skills" — Wednesday, May 27
• "Presentation Skills" — Thursday, May 28

Both one-day sessions are from 9:00 a.m.-4:00 p.m. Registration is limited to 12 participants.
The fee for each seminar is $495 per person.

To register, click here.
For more information, e-mail Brooke Fishel at NAHB, or call her at 800-368-5242 x8061.

Calendar: Conferences and Events

March 2009

NAHB Multifamily Pillars of the Industry Conference March 17-18, 2009 San Diego Hotel Del Coronado Register Onsite! The fluctuating economy and risky credit markets have even the most savvy multifamily developers rethinking their business plans. They’re strategizing new ways to finance current deals and positioning their companies for future opportunities. NAHB’s Multifamily Pillars of the Industry Conference is the place where smart developers and other industry professionals know they can come for: The most up-to-date market and financial information Interactive learning on key topics such as REIT’s, debt markets, sustainability and emerging trends The chance to network with peers, potential partners, capital sources and essential product and service providers View more about the Pillars of the Indstry Awards here.

NAHB 2009 Legislative Conference March 24, 2009 Washington, D.C Capitol Hill Fee: FREE Register Now! Travel to the nation’s capitol on March 24, 2009, to urge your representatives and senators to support policies that will stabilize the housing market, help reduce foreclosures and restore confidence in the credit market. Register Now! and view the 2009 Legislative Conference Schedule of Events.

LIHTC Income Limits Webinar: Keeping Your Property in Compliance with the New Rules March 26, 2009 2:00 - 3:00pm EDT Last summer, as part of the "Housing and Economic Recovery Act of 2008," Congress enacted important changes to the Low Income Housing Tax Credit (LIHTC) program regarding income limits and recertifications. Join NAHB for this one-hour event as experts in LIHTC compliance review these changes and how they affect the way you do business. Registration and more information is available here. Presenters on the web seminar will: Review the effects of the "hold harmless" provision Go over the rural income limits measure and how to determine if your property qualifies Discuss the annual tenant income certification exception in 100% low-income properties Speakers: Jim Kroger, Novogradac & Company LLP Grace Robertson, Internal Revenue Service Ruth Theobald, TheoPRO Compliance & Consulting, Inc. The one-hour call will include the presentation as well as questions from the audience. Questions can be submitted in advance through Friday, March 20 to cmcguire@nahb.com

April 2009 

Building for Boomers & Beyond: 50+ Housing Symposium™ April 27-29, 2009 Philadelphia, PA Philadelphia Marriott Downtown The 2009 NAHB Building for Boomers & Beyond: 50+ Housing Symposium™ is the premier event for 50+ housing professionals—you can’t afford to miss it! Register TODAY! Get fresh ideas that will lead to concrete solutions and help you revolutionize your business: Develop a winning strategy – hear the latest economic forecast, get a look at the capital markets, emerging design trends, green building for the boomer market, hot amenities and more; Plug into the future – see the latest product and technology for the 50 and up crowd; Learn from the experts – hear from seasoned professionals who have been through several market cycles; Get a blueprint for success – tour award-winning condos, single-family homes, clubhouses and more; Develop and cultivate business relationships – network to grow your circle of contacts.

May 2009

Attend the National Green Building Conference in Dallas Attend the 2009 National Green Building Conference in Dallas on May 10-13 to learn more about the critical paths to green building, and to participate in interactive sessions and be part of the driving force for the green building and remodeling markets. For more information and to sign up to be notified when registration opens, visit www.nahb.org/GreenBuildingConference.