The 2023 AHF Live conference and exposition at the Hyatt Regency in Chicago helped breathe new life into today’s affordable housing agenda. The premier industry event had a record turnout this year—with more than 1,750 attendees and 125 sponsoring firms. Affordable housing stakeholders took part in lively panel discussions, constructive debates, and on-the-floor networking and negotiating.

Lument was the title sponsor of the three-day conference, which brought owners and developers, lenders, brokers, and agency officials together to address today’s biggest challenges while sharing their insights on some of the most effective investment and financing strategies.

“The folks who had good years as of November 2022 were very tuned into today’s market realities,” said Paul Weissman, who heads affordable housing production at Lument, about the AHF Live as a whole. “Almost everyone shared a mentality of ‘let’s roll our sleeves up and make things work’.”

Weissman joined a leading panel on the industry’s many strides and setbacks and the outlook going forward.

The “State of the Industry Power Panel,” moderated by Affordable Housing Finance Editor Christine Serlin, delved into how owners and developers can make smarter choices to help boost the country’s housing stock. Weissman spoke alongside Enterprise Community Partners CEO Shaun Donovan, L+M Development Partners Senior Director of Development Elaine Braithwaite, Eden Housing President Linda Mandolini, and U.S. Bancorp Impact Finance Managing Director, Affordable Housing Vihar Sheth.

Here is a closer look at the key takeaways from the “State of the Industry Power Panel” at this year’s AHF Live.

Renewed Efforts to Boost and Leverage Subsidies

Many panelists emphasized that affordable housing is at a pivotal moment as the industry heads into 2024.

While each panelist brought different perspectives to the table, nearly all agreed that more needs to be done to move the needle with affordable housing. Across the board, according to the National Low Income Housing Coalition’s Gap Report, there’s an estimated shortage of $7.3 million affordable rental homes in the U.S. for extremely low-income individuals, as the number of working-class and senior residents continues to rise. This presents big opportunities and some noteworthy challenges for investors and developers going forward.

Developers continue to rely heavily on federal and state Low-Income Housing Tax Credits (LIHTCs) and are focused on how best to combine them with customized debt and equity financing as they navigate the latest economic pressures. Against this backdrop, lender and broker partners have their work cut out for them—a notable theme at this year’s conference.

Fortunately, there is more nationwide support for affordable housing at the federal, state, and local levels than ever before, Weissman and other panelists noted. For example, Ohio, Texas, Rhode Island, and Florida enacted new legislation this year to provide more tax credits and other incentives for affordable housing development at the state level. More than a dozen other states have proposed similar initiatives and expansions as well as amendments to existing programs over the past couple of years.

On the federal level, a big talking point at AHF Live was getting the Affordable Housing Credit Improvement Act of 2023 passed given wide bipartisan support across both chambers of Congress. Panelists and attendees also focused their attention on the upsides of the landmark Inflation Reduction Act that passed last year.

“There was a lot of talk about accessing funding in the Inflation Reduction Act to improve energy efficiency and that’s something we’ve also been focused on at Lument,” Weissman noted. “This has two benefits: There’s the subsidy available to cover some of the costs of implementing these energy-efficient components and then there’s the ability to underwrite the utility savings that will be generated by having them in place.”

Tackling Affordable Housing Challenges with Effective Solutions

The “State of the Industry Power Panel” and other sessions at AHF Live also drilled into the growing need for proactive and progressive financing solutions across the board.

Weissman estimated that the total dollar volume of debt proceeds for affordable housing development has fallen by nearly 40% over the past two to three years due to rising interest rates, while the cost of building has significantly increased due to rising construction costs and other factors. Inflation has also hurt operations at many multifamily properties. The total dollar volume of subsidies is not enough to fill the gap.

Looking at new household formation compared to housing starts and housing completions, Weissman pointed to a prolonged deficit in housing construction that has led to record-high rents. “This deficit—which dates back to the 2008 financial crisis—could extend to another cycle if lenders and policymakers don’t take a closer look at increasing supply across all manner of housing,” Weissman maintained. “The only way to bring rent prices down is to build a lot of housing.”

Looking ahead to future opportunities for investors and tenants, panelists spoke about the growing number of partnerships across the public and private sectors geared towards increasing the amount of funding for new affordable housing developments.

Panelists also talked about the potential to increase the country’s housing stock at a lower cost by taking greater advantage of modular construction and manufactured housing.

Additionally, the U.S. Department of Housing and Urban Development (HUD) increased Area Median Income limits in most of the country this year. As a result, more tenants potentially now qualify for affordable housing, which can further bolster occupancy rates and incentivize more development.

Leveraging Lument’s Expertise for Specialized Financing

As the title sponsor of this year’s AHF Live conference and exposition, Lument is proud to be a key player in the collective effort to make debt and equity deals pencil out for the creation and preservation of affordable housing.

Lument’s on-the-ground, relationship-driven approach to financing helps investors and developers nationwide with acquisitions, new construction, and rehab investments. Lument’s originators specialize in HUD/FHA multifamily loans, small balance loans and other debt products offered by Fannie Mae and Freddie Mac, as well as proprietary capital.

The teams at Lument also underwrite tax-exempt bonds for LIHTC deals in many markets and partner with owners around the country to best position their LIHTC properties for investment sales.

Contact Lument for the latest market insights and the most suitable financing options for affordable housing investments.