Issue No. 24-004 | June 19, 2024
Notable property tax developments in the past week:
- Massachusetts > The Massachusetts Appellate Tax Board credited the income approach to valuation in a property tax dispute concerning a multifamily property financed through the HUD Supportive Housing for the Elderly Program finding that the cost approach, utilized by the assessment authority, overstated the market value of the project as the restricted rents would not have justified the actual construction costs. Read more from
Jason C. Neal
here
. This is a notable decision for LIHTC operators in states that do not have a statutory methodology for valuing rent restricted properties or an applicable property tax exemption. Arizona LIHTC operators secured a similar decision in Cottonwood Affordable Housing v. Yavapai County
, and the Arizona Legislature adopted a statutory method of valuation for LIHTC properties in 2021, A.R.S. §§ 42-13601 to -13605.
- Iowa > Reversing a trend of states moving to assessment and tax caps, counties in Iowa are urging lawmakers to reconsider property tax caps. Read more here
.
- Colorado > As I previously shared here
, Colorado voters will decide whether to enact a ballot initiative that would cap the growth of statewide property tax revenues to 4% per year.
Matt Poling
from Ryan compares the initiative to the property tax reform measure passed earlier this year by the Colorado Legislature. Read more here
.
- Property Assessment & Tax Caps > Property assessment and tax caps, once an esoteric topic confined to committee hearings in state legislatures, are gaining national attention. Watch this report
from ABC News discussing property tax proposals in Colorado, Kansas, Nebraska, Idaho, Michigan, and Georgia.
Notable multifamily developments in the past week:
-
ReSeed Partners
opened applications for its second cohort of multifamily operating partners. ReSeed Partners, founded by
Rhett Bennett CFA
,
David Bergeron
,
Moses Kagan
,
Laura Krannich
, and
Doug McCrary
, provides an operations framework and capital to multifamily operators seeking to start or accelerate their asset management business. Read more here
.
- Calls are growing for the FOMC to begin cutting its target range for the federal funds rate with
Mohamed El-Erian
adding himself to the list. El-Erian argues that the initial rate cut allows the market to price in the entirety of the cutting cycle and increases the probability of a soft landing, favoring an earlier initial rate cut than what the FOMC is signaling in its forward guidance. Delaying the initial rate cut, on other hand, increases the probability that the FOMC will have to cut rates more to respond to a deteriorating economy. Multifamily participants will see wisdom in El-Erian's view especially when considering the path of actual rent inflation versus the metrics that guide the FOMC's decision making. Read El-Erian's opinion piece in the Financial Times here
.
-
Wood Partners
is joining other national multifamily developers with the launch of its attainable housing brand, Altera. Last month, Wood Partners started construction on Altera Union City in Georgia and Altera Land O'Lakes in Florida. Read more here
.
- The Wall Street Journal reports that after a period of slowed growth, rents are rising again in several Northeast and Midwest cities, influenced by factors such as strong job growth and a less affordable home-sales market. The high supply in the Sunbelt has kept rent growth negative in some areas, but multifamily operators are starting to raise rents again as fewer residents are moving out to buy homes. Rising rents could complicate the inflation picture and challenge the Federal Reserve's ability to ease interest rates. Investment firms are buying large apartment portfolios again, with some focusing on middle-market housing. Despite these trends, most analysts do not expect big rent increases to return nationally this year. Read more here
and read commentary on the WSJ article from
Jay Parsons
here
.
-
亚马逊
has added $1.4 billion to its Housing Equity Fund, bringing the total investment to over $3.6 billion, aimed at creating and preserving over 35,000 affordable homes across the Puget Sound region, Arlington, VA region, and Nashville, Tennessee. The fund, launched in January 2021, has already exceeded its original goal of creating and preserving 20,000 affordable homes two years early. The fund targets households earning 30% to 80% of the area median income, often including first responders, teachers, and healthcare workers. Amazon is also supporting diverse-led developers through the continuation of the Amazon Housing Equity Accelerator. Read more here
.
- Nuveen, the investment manager of TIAA, has secured a $100 million investment from CalPERS, California's public sector pension and health benefits agency, for its Real Estate U.S. Affordable Housing Strategy. The strategy, launched in 2023, aims to generate strong risk-adjusted returns and build resilient communities through access to safe, quality affordable housing. Nuveen's portfolio currently comprises nearly 32,000 housing units across the U.S., valued at $6.3 billion. Read more here
.
- The Business Breakdowns podcast produced a brilliant episode on the marina industry featuring
David Chesner
and
Josh Koplewicz
. The marina industry is fascinating and faces a structural supply constraint due to local zoning and compelling demand drivers, most notably a 12 to 1 ratio of registered boats versus the supply of rentable wet slips and dry storage spaces. Listen to this insightful episode here
.
