Americans Want to See More Affordable Housing (Even in Their Backyards)

The Make Room campaign found promising evidence that most Americans support the development in affordable housing, even in their own “backyards.” The campaign worked with Ipsos Public Affairs to conduct a nationwide public opinion poll and it found that more than three quarters of people (77%) support affordable housing development in their communities.

In the survey of 1,006 people conducted February 29 – March 4, 2016, 85 percent of respondents agreed that leaders should work to create and preserve affordable homes for all. Among those surveyed, 84 percent favored policies that promote affordable homes for workers with moderate incomes such as teachers, nurses and emergency service workers, and 82 percent were in favor of increasing access to affordable homes for families earning low wages.

It is clear the issue of affordable housing development is hitting close to home. Nearly one third of respondents worry that they will need to move within the next year due to high housing costs. Currently 11.4 million U.S. households, or more than one in four renter families, spend more than half of their pre-tax income on rent and utilities, according to Make Room analysis of 2014 U.S. Census data, the most recent year available.

The Make Room campaign aims to give a voice to struggling renters and elevate rental housing on the agendas of our nation’s leaders. The campaign advocates for better policies and tells the stories of families who struggle to make rent.*


Senators Introduce Legislation to Increase LIHTC Authority

Senator Cantwell and Chairman Hatch are looking for ways to advance the legislation they introduced last week to expand the Low-Income Housing Tax Credit Program. CQ reported that the legislation may be part of a year-end tax package or part of broader tax legislation in the next Congress.

May 23, 2016 — Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT) introduced Thursday the Affordable Housing Credit Improvement Act. Ron Wyden (D-OR) and Charles Schumer (D-NY) have already signed on as co-sponsors for the legislation.

If passed, the Act would increase Low-Income Housing Tax Credit authority by 50% and spur the development of 400,000 more units than the current program levels would over the next ten years, according to Cantwell. The bill proposes a permanent 4% credit rate floor for acquisition and bond-financed projects, as well as an income averaging option. Income averaging would allow LIHTC housing to serve a greater range of income levels, as long as the overall average median income does not exceed 60% of AMI.

When Cantwell first announced her efforts to expand the LIHTC program, she proposed a 50 percent basis boost for units serving extremely low-income households. The legislation she introduced on Thursday does not include this provision.

The National Association of Homebuilders notes that this bill will likely fail to see movement this year, but may show promise in 2017 when Congress hopes to address tax reform.

 March 30, 2016 — Senator Maria Cantwell (D-WA) announced a plan to introduce legislation calling for a 50 percent increase in Housing Credit authority and other changes to strengthen the Credit program. She has also released an accompanying report on the Housing Credit’s impact around the U.S. and in her home state of Washington.

Cantwell’s proposal would finance approximately 400,000 additional units of affordable housing nationwide over the next decade, with approximately 35,000 units in Washington state (roughly 4,200 more units than is possible under current levels of LIHTC financing).

According to the ACTION Campaign, more than 1,300 organizations, with representatives from every state, have come together to sign a letter calling on Congress to raise the cap on Low-Income Housing Tax Credit (Housing Credit) allocation authority by at least 50 percent. When Congress last raised the Housing Credit cap in 2000, huge bipartisan majorities of the Senate and House cosponsored the legislation proposing the increase.

If you have any questions, please contact Jennifer Schwartz, Assistant Director for Tax Policy and Advocacy, National Council of State Housing Agencies, at (202) 624-7710, or Emily Cadik, Director of Public Policy, Enterprise Community Partners, at (202) 403-8015.*


Mortgage Rates Took a Dip for the First Time in Weeks

Mortgage rates were down very slightly this week, with the benchmark 30-year fixed mortgage rate inching lower to 3.81 percent, according to's weekly national survey. The 30-year fixed mortgage has an average of 0.18 discount and origination points.

The larger jumbo 30-year fixed fell more sharply, to 3.76 percent, and is now lower than the smaller conforming loan which reasserts a trend that has prevailed for most of the past year. The average 15-year fixed mortgage rate eked out a decline to 3.05 percent this week. Adjustable mortgage rates were mostly lower, with the 5-year ARM nosing downward to 3.22 percent and the 10-year ARM sinking to 3.59 percent.      

Mortgage rates showed little change this week following a recalibration of interest rate expectations that had pushed rates modestly higher each of the two previous weeks. While comments from the Federal Reserve have markets prepared for a likely interest rate hike in coming months, the outlook for the upcoming June meeting is uncertain. The usual bevy of economic data that is a staple of the end of one month and beginning of another will be highlighted by the monthly employment report on Friday. A solid jobs report will further cement the idea of a summer interest rate hike, likely pushing mortgage rates up a bit.  

At the current average 30-year fixed mortgage rate of 3.81 percent, the monthly payment for a $200,000 loan is $933.05.


30-year fixed: 3.81% -- down from 3.82% last week (avg. points: 0.18)

15-year fixed: 3.05% -- down from 3.06% last week (avg. points: 0.15)

5/1 ARM: 3.22% -- down from 3.23% last week (avg. points: 0.18)**


NorthStar, Colony Merger Will Create $17 Billion REIT

NorthStar Realty Finance (NYSE: NRF), a real estate investment trust that is a major owner of senior housing real estate, will be merging with its current external manager, NorthStar Asset Management (NSAM), and private equity firm Colony Capital Inc. (NYSE: CLNY).

The all-stock merger is expected to create a diversified global equity REIT with a pro-forma equity market capitalization of $7 billion and total capitalization of $17 billion. It would have $58 billion of assets under management, placing it in the top quartile of the REIT sector overall.

The new entity will be named Colony NorthStar Inc., the three companies announced Friday. Current Colony CEO and President Richard B. Saltzman will serve as CEO of the new entity. David Hamamoto—executive chairman of NSAM and chairman of NRF—will serve as executive vice chairman of Colony NorthStar. Billionaire Thomas J. Barrack Jr., who founded Colony, will be executive chairman of the board for the new REIT.

Under the terms of the deal, NSAM is the acquiring party. The company will redomesticate to Maryland and elect to be treated as a REIT; NorthStar Realty and Colony then will merge with NSAM through a series of transactions, and the overall transaction is expected to close during the first quarter of 2017.

At that point, NSAM shareholders are expected to own about 32.85% of the new entity, with Colony shareholders owning approximately 33.25% and NRF shareholders owning roughly 33.90% on a fully diluted basis.

NorthStar Asset Management has externally managed NorthStar Realty Finance since spinning off from the REIT in 2014. In January, NSAM came under pressure from activist shareholders who pushed for a recombination, pointing to sharply sliding share prices. NSAM shares have fallen about 43% in the last year, and NRF also has seen share prices decline more than 50% from previous highs after the spinoff.

Executives called out the management structure as a contributing factor to the declining stock prices on a conference call with investors Friday.

“Recently NRF and NSAM have underperformed due to the bias against externally managed companies,” Hamamoto said.

NSAM hired Goldman Sachs Group Inc. to explore options, and rumors of the three-party deal with Colony began to circulate last month.

Executives noted the potential recombination between NRF and NSAM was considered but did not go through in light of the opportunities from the merger with Colony.

“The recombination of the two was definitely on the table,” Hamamoto said. “Both NRF and NSAM had special committees with their own advisors. Each specialty committee concluded the deal with Colony was a much better answer for everyone.”

Colony NorthStar will be internally managed, and achieve an anticipated $115 million of cost savings on a normalized annual basis thanks to identified synergies, according to an investor presentation on the merger.

“The reason that this [merger] is so compelling, where we can a three-company merger and it’s a win-win for everybody, is that this is a long-term vision…” Hamamoto said. “We obviously had some headwinds with the external management structure. That has changed. …We thought this was a great way to emulate what they market likes.”

NorthStar Realty Finance had a health care portfolio of nearly $7 billion as of September 2015, with about 45% of those assets being assisted living or independent living properties. NorthStar Realty Finance is high-profile REIT in the senior housing sector, with recent deals including the $875 million purchase of independent living communities from an affiliate of Holiday Retirement.

James F. Flaherty III forged a relationship with NRF in 2014, after a decade as CEO of HCP Inc. (NYSE: HCP), one of the “Big Three” health care REITs. In February, the high-profile leader drastically scaled back his role with NorthStar, but said that this was for personal reasons and not due to any disagreements over how the company was being run.

Health care will make up about one-third of the initial Colony NorthStar portfolio. Real estate debt and other debt related securities will compose about 26% of the initial portfolio, and hotel properties will account for 18%.

Moving forward, the companies expect that the merger will enable them to optimize portfolio management—including incubating new platforms—and will deleverage and strengthen the balance sheet, leading to more favorable cost of capital. The REIT will be investing primarily in six verticals, though executives noted those verticals are not set in stone just yet.

Its increased financial flexibility should enable Colony NorthStar to attract institutional capital and execute value-enhancing transactions, according to the investor presentation.

“This strategic combination is the next logical step for NSAM and NRF, creating substantial value for shareholders and transforming the companies into a world-class, internally-managed equity REIT that includes a sizable, established institutional and retail asset management platform,” Hamamto said in a prepared statement. “We are confident that Colony NorthStar with its lower leverage, larger balance sheet and improved liquidity profile is poised for meaningful multiple expansion and substantially enhanced long-term returns for shareholders.”

Special Committees of NSAM and NRF have approved the transaction, as has Colony’s board of directors. ***



Events (2016)

  • Gill Group plans to attend NCSHA’s Housing Credit Connect Conference June 13th – 16th in Seattle, WA.
    • Cash Gill will be speaking on a panel entitled “Rural and Native American Development Strategies” with Bryan Hooper (Deputy Administrator of Multifamily Housing at Rural Development), Joline Kline (Executive Director of the North Dakota Housing Finance Agency), Don Beaty (The Summit Group), and Elizabeth Glynn (CEO of Travois).
  • Gill Group plans to attend CARH’s Mid-Year Meeting and Conference June 12th – 13th in Washington, DC.
  • Gill Group attended NH&RA’s Spring Developer’s Conference May 16th – 18th in Marina del Ray, CA.
  • Gill Group attended PHADA Annual Conference and Exhibition May 22nd – 24th in Las Vegas, NV.
  • Gill Group attended Texas NAHRO’s 40th Annual Conference and Tradeshow April 19th – 21st in Houston, TX.
  • Cash Gill attended the Missouri Real Estate Appraisers Commission Quarterly Commission Meeting March 22nd in Jefferson City, MO.
  • Gill Group attended Bank of Advance’s Annual Meeting March 17th – 20th in Norfork, AR.
  • Gill Group attended the Maco Companies’ Annual Meeting March 10th – 13th in Biloxi, MS.
  • Gill Group attended the Council for Affordable Rural Housing’s Quarterly Board Meeting March 4th – 5th in Washington, DC.
  • Gill Group attended the National Housing and Rehabilitation Association’s Annual Meeting February 24th – 27th in West Palm Beach, Florida.
  • Gill Group attended the Council for Affordable Rural Housing’s Midyear Meeting January 25th – 27th in San Antonio, Texas.

Events (2015)

  • In 2015, Gill Group attended over 50 meetings and conferences from California to New York, and just about everyone in between.

GROWTH (2015 - Highlights):

  • Gill Group added two offices in Michigan and one in Wisconsin, further expanding our staff of architects and engineers.
  • Gill Group and Greystone formed a Joint Venture to provide a full line of consulting and development services for Rental Assistance Demonstration (RAD) transactions. Gill Group and Greystone are utilizing each of our areas of expertise in a collaborative effort, with a mission to partner with PHAs across the nation in preserving and expanding the affordable housing inventory under the HUD RAD program. Our team fully understands the intricacies of the real estate and affordable housing industries, and our services are provided by professionals who are fully immersed in LIHTC executions, construction management, project accounting, regulatory compliance, real estate transactions, and opportunity development. We sit on national and state boards and have in-depth knowledge of industry trends and best practices. As a developer team, we operate as three individual entities, each with a unique set of previous transaction experiences that add value to the project at hand. As a collaborative unit, we draw upon those experiences to bring to the table creativity, fresh ideas and unsurpassable development advisory services.
  • Gill Group’s subsidiary, National Title & Escrow, added two new offices in Missouri and Arkansas, further expanding our ability to service our nationwide base of customers.

Events (2014)

  • Gill Group attended 40+ meetings and conferences throughout the United States in 2014.

GROWTH (2014 - Highlights):

  • Gill Group began the process of working with owners of affordable housing to develop a web-based program that will work hand-in-hand with our services. It will give the users of our appraisals, market studies, capital needs assessments and many other services easy access and real time usage.
  • Gill Group added 2 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are 11 architects, one MAI appraiser, one general certified appraiser, four market analysts and 12 additional support staff. 

Events (2013)

  • Gill Group attended 22 conferences and meetings throughout the United States in 2013

GROWTH (2013 - Highlights):

  • Gill Group expanded our cutting-edge market analysis software and added our own in-house developed needs assessment software for CNAs, PNAs, PCNAs, PCAs, RPCAs, and every other acronym for this type of service. 
  • Gill Group added 4 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are three architects, one MAI appraiser, two general certified appraisers, five market analysts and 10 additional support staff. 
  • Gill Group expanded the footprint of its subsidiary, National Title & Escrow, to cover the entire United States with a local presence.

Events (2012)

  • Gill Group attended 20 conferences and meetings throughout the United States in 2012

GROWTH (2012 - Highlights):

  • Gill Group developed cutting-edge market analysis software that will allow us to do preliminary analysis that is subject-specific in any market in the United States within minutes. 
  • Gill Group added 11 offices with appraisers, market analysts, engineers and architects.
    • The offices now employ an additional 34 people.
  • Gill Group expanded coverage of its subsidiary, National Title & Escrow, to cover the entire United States.
  • Gill Group expanded coverage of its subsidiary, Gill Insurance Group, to cover the entire United States.

  Gill Group has published the following:

  • New York Real Estate Journal - How can low-income housing facilities translate into high profits?
  • New York Real Estate Journal - Up, up and away: Home mortgage interest rates and gasoline prices continue ascending.
  • Tax Credit Advisor - Boston MSA Market Snapshot
  • Tax Credit Advisor - Seattle MSA Market Snapshot
  • Northeast Industrial Development Resource Guide - What Appraisers Know About Investing.
  • Affordable Housing Finance – Urban and Rural Market Studies.
  • Tax Credit Advisor – LIHTC Appraisals 101

Cash Gill, MAI has had the opportunity to speak on the following topics:

  • (Indianapolis, IN) National Council of Affordable Housing Market Analysts - Maximize Your Market: Understanding the Methodology Behind Market Studies.
  • (Reno, NV) Nevada Council of Affordable and Rural Housing - Don't Get Caught in the Red. New Guidelines for Audits and Inspections.
  • (Washington, DC) The Institute for Professional and Executive Development - Nonrecourse HUD Deals - So You Closed Your Nonrecourse HUD Deal. Now What? And Is It Really Nonrecourse?
  • (Arlington, VA) Council for Affordable and Rural Housing - Property Valuation: The Correct Way to Value Properties.
  • (New Orleans, LA) National Council of Affordable Housing Market Analysts - Affordable Housing Site Analysis
  • (Las Vegas, NV) Nevada Council of Affordable and Rural Housing - Auditing and Accounting Guidelines for Section 42 Low Income Housing Tax Credits.
  • (Washington, DC) Council for Affordable and Rural Housing - Rural Development Appraisals and Market Studies
  • (Miami, FL) Council for Affordable and Rural Housing - The Equity Market - Impact on Rural Housing
  • (Washington, DC) Council for Affordable and Rural Housing - How to Foster Affordable Green and Rural Housing Needs Assessments
  • (Indianapolis, IN) Affordable Housing Association of Indiana - Market Analysis – Best Ways Use Market Studies to Ensure Application Points
  • (Portland, ME) Enterprise Buyer/Seller Conference for RRH 515 Properties – Valuing the Product. What Is My Development Worth?
  • (Washington, DC) National Housing and Rehabilitation Association – Financing and Underwriting Special Needs Housing.
  • (Atlanta, GA) National Council of State Housing Agencies – Comprehensive Market Analysis.
  • (Chicago, IL) AHF Live – Strategies for Rural Deals.
  • (Dallas, TX) Crittenden Multifamily – Financing Special Use Properties.
  • (Washington, DC) Council for Affordable Rural Housing – Rural Housing Preservation
  • (Denver, CO) National Council of State Housing Agencies – Rural Housing Strategies
  • (Denver, CO) National Council of State Housing Agencies – Y15: Preservation and Disposition Seminar
  • (San Antonio, TX) Rural Rental Housing Association – LIHTC Legislative Update
  • (Key Largo, FL) Council for Affordable Rural Housing – How National Appraisal Practices Impact USDA Assisted Properties
  • (San Francisco, CA) National Council of State Housing Agencies – Changes and Challenges in Rural Housing Development
  • (Chicago, IL) AHF Live – Preservation of Older LIHTC Deals
  • (Franklin, TN) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Columbus, OH) Council for Rural Housing & Development of Ohio – Rural Housing Market Research
  •  (South Bend, IN) Great Lakes Capital Fund’s University of Affordable Housing – Valuation Risks Using Financing for RAD Deals
  • (Chicago, IL) National Council of State Housing Agencies – Rural Development Opportunities
  • (Orlando, FL) National Association of Housing and Redevelopment Officials – Affordable Housing Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies
  • (Alexandria, LA) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Ft. Lauderdale, FL) Southeastern Affordable Housing Management Association (SAHMA) – Rent Comparability Studies 101
  • (Indianapolis, IN) Midwest Buyer/Seller Conference – CNAs and Appraisals
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities (2014)
  • (St. Pete Beach, FL) CARH – Preservation Challenges and Opportunities
  • (Nashville, TN) TAHRA – Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies for LIHTC and RAD Transactions
  • (Los Angeles, CA) NCSHA – Successful Development in Challenging Markets
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities
  • (Seattle, WA) NCSHA – Rural and Native American Development Strategies





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