HFA Roundtable: States Sound Off

Bryan Butcher
Executive director and CEO, Alaska Housing Finance Corp.

We developed a three-tiered system for per unit cost targeting based on a community’s geographic proximity to our major population center. Project costs vary widely around the state because of its five temperate zones and the vast geographic scale (3.1 times wider (east to west) and 1.9 times taller (north to south) than Texas). This change reduces the project cost implications of transportation and climate related variations allowing a more level playing field for developers around the state.

What trends are you seeing in your 9% and/or 4% credit low-income housing tax credit (LIHTC) programs?

People are swinging for the fences with 9% proposals. Fewer deals are being proposed, but the aggregate amounts requested on 9% deals are increasing.

Four percent program interest is marginally increasing, but we are seeing more.

What strategies are you implementing to preserve existing affordable housing?

In Alaska, we are focusing 25% of the 9% credit authority to be set aside for developments assisted through project-based rental assistance (U.S. Department of Agriculture Rural Development, Sec. 8).

What is your agency doing to address cost containment?

We are incentivizing construction and design efficiency through our several different rating factors versus using a one-size-fits-all cost limit. As a result, 2014 project costs are coming in at 2008 levels, which we’re really happy to see in a generally rising cost environment.

What advice do you have for developers applying for LIHTCs and/or other financing in your state? What’s a common mistake developers make when applying for funding?

Bring your A game. Submit as thorough an application as you can. A common mistake is assuming that deal terms and structures from five years ago will still receive an allocation in today’s environment. It takes a better project today to receive consideration than it did a decade ago.