About OCCH

President's Message


Hal Keller, President

Transitions

Happy New Year! Welcome to 2019: a year of many important transitions for sure. But before I look to the future, let me thank all of our development and investment partners for making 2018 a great year for OCCH and our collective mission of producing and preserving affordable housing. Despite the turmoil of the post-tax reform period, with your hard work we were able to close 42 projects and get them under construction. The over 2,000 units in rural, urban and suburban communities across three states will meet a wide range of housing needs for senior citizens, families and individuals with special needs.

But here we are facing a new Congress, new Governor and yes, a new President of OCCH!

Federal:
Let’s see what we have here at the federal level. I will, as a loyal member of the Party of Affordable Housing, restrict comments to issues that affect housing policy. Advancing affordable housing requires support from both political parties.

  • Leadership: A Democratic House means new committee chairs. Democrats are less likely to agree to any significant changes in the housing finance and delivery system proposed by the Trump administration. Maxine Water (D-CA) is taking over Financial Services. Richie Neal (D-MA), a strong friend of the LIHTC program, will chair Ways and Means. On the Senate side, Senator Chuck Grassley (R-IA) will lead Senate Finance succeeding the retiring Orin Hatch, also a supporter of LIHTC. Senator Grassley ordered those GAO reports on the LIHTC program so there is cause for some concern. Senate Banking will be chaired by Mike Crapo (R-ID) with our own Ohio Senator Sherrod Brown as ranking Democrat.

  • LIHTC Expansion: The efforts to expand and modernize the program are once again underway. The starting point is the previous legislative session’s Cantwell-Hatch bill in the Senate and the Tiberi (Curbelo)-Neal bill in the House. The difference between the two bills was the absence of the 50% increase in program authorization in the House version. With a Democratic majority in the House, it is reasonable to assume a new House bill would include the increase.

  • Appropriations: As I write this column the federal government is partially shut down and we can only hope that the bipartisan two year budget deal agreed to last year covering FY 2018 and FY 2019 holds. You might recall that deal actually contained increases for several HUD programs for the first time in a very long time.

  • FHFA: The term of Mel Watt, the Director of the Federal Housing Finance Agency (FHFA), has expired. As a reminder, FHFA is the regulator for Fannie Mae, Freddie Mac and the Federal Home Loan Bank system, also known as Government Sponsored Entities or GSEs. President Trump has nominated Mark Calabria, Vice President Pence’s head economist as Watt’s replacement. This is a critical position in terms of whether GSE reform could impact the funding for the National Affordable Housing Trust Fund and the Treasury’s CDFI Capital Magnet Fund, both of whom receive money from the activities of Fannie and Freddie. And do not forget the Federal Home Loan Bank system that is an active player in affordable housing with its AHP grants and loan products.

  • CRA Reform: Last year one of the three bank regulators, the Office of the Comptroller of the Currency issued an Advance Notice of Rulemaking on changes in the Community Reinvestment Act (CRA) regulations. It is worth noting the other two regulatory agencies (Federal Reserve and FDIC) did not participate. It will be important to watch developments related to this effort: a misstep in CRA regulatory reform can disrupt the way banks lend and invest in low and moderate income areas.

State: Speaking of transitions, Ohio has a new Governor! Mike DeWine was inaugurated on January 14th. Representative Larry Householder has been elected the new Speaker of the Ohio House with Senator Obhof retaining his position as President of the Ohio Senate. Now it is time for the Party of Affordable Housing, Ohio Chapter, to get to work. We need to quickly coalesce around a housing agenda to present to the new administration. The major elements of this agenda are:

  • OHFA: The Ohio Housing Finance Agency is governed by its Board. Board member composition is set forth in the Ohio Revised Code. A new governor has several initial key appointments including selecting the board chair. The directors of Development Services Agency and the Department of Commerce are automatically appointed. These are two cabinet level appointments recently made by Governor DeWine. The wonderful news is that the directors appointed by Governor for these two departments have excellent reputations as qualified, professional, committed public servants. The former mayor of Findlay, Lydia Mihalik is taking the helm at Development Services and Commerce will be led by Sheryl Creed Maxfield. Now the Governor needs to pick a chair, usually the director of Development or Commerce, and fill two other slots, one vacant and one expired. Bottom line: OHFA is a well-run organization and we do not want things disrupted or politicized. It is unfortunate and awkward timing that OHFA’s Executive Director, Sean Thomas is on extended medical leave (get better Sean!) with the Agency being run by its Interim Director, Holly Holtzen. Thank you Holly for stepping up!

  • Expand the Ohio Housing Trust Fund: The Trust Fund has been key to affordable housing efforts in Ohio for the last 25 years. Unfortunately the source of funds for the Trust Fund, a recordation fee collected by county auditors, continues to deliver fewer dollars way below the cap authorized. An effort to increase the Trust Fund in the last Ohio biennial budget in 2016 came close to success but failed in the Ohio Senate. It is time once again to rally around the Trust Fund. Bill Faith at COHHIO is our leader on the expansion of the Trust Fund.

  • Create an Ohio State Low Income Housing Tax Credit. Around 20 other states have or are close to passing a state housing credit that goes alongside the federal credit to generate additional private capital for LIHTC deals. The Ohio Housing Council has commissioned a white paper from the accounting firm Novogradac to explore what an Ohio credit would look like. Though no proposal has been developed yet one could foresee a state credit administered by OHFA directed to 4% tax exempt bond deals. This would boost use of unused federal private activity bond volume cap and deliver needed capital to such deals. Stay tuned.

  • Private Activity Bond Volume Cap: Speaking of the cap, we must work with the new administration to make sure there is easy access to this federal resource for multi-family projects. Ohio and most other states do not use all of their per capita volume cap allocation so this should not be difficult. But a new administration often revaluates priorities for this resource than can be used for a wide range of activities.

  • Local Property Taxes on LIHTC Deals: Last but certainly not least is the messy but critical issue of how LIHTC deals are taxed. This is trench warfare and battles to have taxes set at a fair level for occupancy and income restricted properties are being fought at the county auditor, state appeals, court and legislative levels. In the last legislative session a bill was introduced that would have had LIHTC properties taxed as if they were market rate properties. How crazy is that? We need to continue to aggressively pursue multiple strategies to make sure that an undue and unfair tax property burden is not placed on affordable housing projects.

That is one full housing agenda for the State of Ohio! Fortunately, all of the trade associations housing lobbyists work well together and will be having meetings in the near future to advance this agenda, as well as other important issues related to each organization’s focus.

OCCH: And yes, OCCH is having our own transitions! I am very excited that Peg Moertl of Cincinnati will be succeeding me as OCCH President April 1st. After more than 25 year at the helm at OCCH, it is time for a new leader and Peg is well qualified to take the organization into the future. Please see Peg’s message and bio. I will assist with the transition for the balance of the year, much of which will be spent meeting with our development and investment partners, and assume the title of President and CEO Emeritus. And don’t worry, you will still see me around as I continue to support OCCH, our partners and our collective mission into retirement.

Also very exciting are the new staff joining OCCH and the promotions of several of our current staff members as they grow and help OCCH grow! See below for more information.

In closing, it has been an honor to work with all of our partners and OCCH for the last 30 years. We all have accomplished much together. And speaking of 30 years, OCCH has a big birthday coming up! Stay tuned for information about a celebration…

Best,
Hal
hkeller@occh.org