Texas Housing Conference 2006: The Winds of Change July 26 - 27, 2006
Hosted by The Texas Affiliation of Affordable Housing Providers Cover photo taken by Bill Wenson, President, Wenson & Assoc., Inc.
July 26, 2006 Officers:
Dear Conference Participants:
President
Diana McIver
DMA Development Co., LLC Past President
Jerry Wright
Capmark Securities, Inc. President-Elect
G. Granger MacDonald MacDonald & Associates Vice President
Tom Scott
Coach Realty Services Vice President
Mike Sugrue
This has been an eventful year for affordable housing providers in Texas. In the aftermath of Katrina, TAAHP did its own inventory of surplus units statewide and disseminated this to relief organizations. Our TAAHP members stepped forward and welcomed the Katrina evacuees with housing, food, clothing and furniture, and then bravely faced the wrath and destruction caused by Rita three weeks later. In the midst of such devastation, the compassion and generosity of Texans, and particularly affordable housing providers, reached a new height. Never have I been so proud of our members. This year’s conference theme – The Winds of Change – gives us an opportunity to examine the impact that Hurricanes Katrina and Rita have had on affordable housing in our State and to overhaul the way we do business as a result of those unfortunate winds.
Solutions Plus, Inc. Treasurer
Tim Kemper
Change has been a recurring theme in the past year. In January, John Garvin, who had served TAAHP as its Executive Director for five years, resigned to embark upon a new opportunity as Senior Advisor to the FHA Commissioner at HUD. In May, Jim Brown joined TAAHP as Executive Director. His diversified background and legislative knowledge base make him a valuable addition to our organization. In June, TAAHP moved its offices to within blocks of the Capitol knowing that 2007 will be an important legislative session for our members.
Reznick Group Directors:
Don Bethel
Bethel Realty Co.
Mike Clark
Alpha-Barnes Real Estate Services
JOT Couch
Texas Inter-Faith Housing Corporation
Sally Gaskin
SGI Ventures, Inc
Dennis Hoover
Rural Rental Housing Association of Texas
Antoinette M. “Toni” Jackson Coats|Rose
Mike Lankford
Lankford Interests, LLC
Linda McMahon
JP Morgan CHASE & Co.
Ike Monty
Investment Builders, Inc.
Ron Williams
Welcome to the Texas Housing Conference 2006. On behalf of the TAAHP Board of Directors, I want to thank you for joining us for the next two days as we look at ways to expand and improve affordable housing throughout the State of Texas, including rebuilding in our Gulf Coast areas.
TDHCA also moved its offices and experienced leadership change, with Edwina Carrington vacating the Executive Director’s position, where she had served for four years, and returning to the private sector. Her successor, Michael Gerber, who comes to TDHCA from the Governor’s staff, is a true friend of affordable housing. Our TAAHP members worked side-by-side with Mike in the aftermath of Katrina and Rita – he was an important part of the Texas recovery team and we look forward to working with Mike in his new role. As our industry moves forward, propelled by these Winds of Change, remember that change can be good. It brings new opportunities and fresh perspectives, and just like those volatile winds, it makes us rethink our positions and redirect our energies. I hope this will be evident in this year’s conference filled with new topics and new faces. Whether you are here as a Sponsor, Exhibitor, Speaker, or Participant, we welcome your ideas and your input, not just in the next few days, but throughout the year, on ways that we can achieve our mutual mission of increasing the supply and quality of affordable housing in Texas. Enjoy the conference – and your time here with us in Austin!
Southeast Texas Housing Finance Corporation
Sandi Williams
Alamo Area Mutual Housing Association
Diana McIver Board President Increasing the supply and quality of affordable housing for Texans with limited incomes
TAAHP: 814 San Jacinto Blvd., Suite 408, Austin, TX, 78701 Phone: 512-476-9901 t Fax: 512-476-9903 t E-mail: ashaw@taahp.org t Web Site: www.taahp.org
A NOTE FROM THE EXECUTIVE DIRECTOR:
Welcome to the Texas Housing Conference 2006: The Winds of Change. TAAHP will bring together a cadre of recognized and successful professionals in their respective fields to address some of the more pressing issues facing Affordable Housing Providers today. The winds of two devastating storms not only destroyed the homes and lives of many Texans, but also caused a ripple effect throughout the Texas development / building industry: material costs are pushing projects out of budget, insurance providers are seeking a rate structure that allows their business bottom line to remain in the black, and new challenges are developing daily. Other issues of interest relate to meeting the Fair Housing Regulations and dealing with a public unwilling to examine the community benefits from Affordable Housing projects in their area: the NIMBY’s. The Texas legislature, in response to Texas Supreme Court mandate, adopted a new school financing plan which reduces independence on property taxes, but through the new gross margin tax creates a new financial burden on some of us in the Affordable Housing industry. Both the Senate and House recognized potential inequities in the new legislation and by joint resolution have agreed to address the problems early on in the 2007 Legislative Session TAAHP has planned a conference that will address many of these issues, seek your input, and through a commitment to join with other housing provider associations, will formulate a housing agenda for the 2007 Legislative Session. The Texas Housing Conference 2006: The Winds of Change would not be possible but for the generous support from its sponsors and exhibitors. The 2006 conference has the largest number of exhibitors in the history of the conference; 40. We hope you will stop by their booths and engage in a dialogue that not only enhances your business plan or bottom line, but also to exchange ideas so that all of us may better serve our industry: Affordable Housing Providers. Have an enjoyable and safe conference.
Jim T. Brown Executive Director, TAAHP
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Texas Housing Conference 2006: The Winds of Change
General Conference Information Registration / Information The Registration / Information desk is located on the Lake Level in the San Jacinto Ballroom Foyer. TAAHP staff and volunteers will be available to register attendees and answer questions. Registration / Information Desk hours: Wednesday, July 26, 11:30am - 6:00pm Thursday, July 27, 7:30am - 5:00pm Friday, July 28, 7:30am - 9:00am To leave a message for TAAHP, or any attendee, during the conference, please call the Four Seasons at 512478-4500. The hotel operator will ensure that the message is delivered.
Admission / Sessions
Exhibit Hall
Your name tag allows you admittance to all conference sessions, receptions, breaks, and meals.
There are numerous lenders, investors, property management firms, government agencies, etc. exhibiting at the conference. Please take some time to visit the Exhibit Hall in the Four Seasons Ballroom B -D (Lake Level).
You must wear your name tag at all times. If you lose your name tag, please request a replacement at the information desk. Anyone without a name tag will not be admitted to any event until they show proof of registration and receive a new name tag. The Opening Session and the Legislative Update Luncheon will be held in the Four Seasons Ballroom A, and the breakout sessions will be held in the San Jacinto Ballrooms East and West and in the Waterloo.
All breaks, receptions, and breakfast will be held in the Exhibit Hall.
TAAHP would like to extend our thanks to our sponsors and exhibitors for their contribution to the Texas Housing Conference 2006: The Winds of Change.
Hotel Map
TAAHP 814 San Jacinto, Suite 408, Austin, TX, 78701 512-476-9901 www.taahp.org Page 4
Texas Housing Conference 2006: The Winds of Change
Agenda at a glance
Texas Housing Conference 2006: The Winds of Change
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Exhibitors & Exhibit Hall Layout
Exhibitor Booth Numbers 13 38 15 7 21 34 35 26 14 36 3 19 30 28 16 33 22 32 5 25
AmeriNational Community Services, Inc. Apartment Finder Magazine Apollo Housing Capital (Bronze) Bank of America (Gold) Boston Capital (Bronze) Business Insurance Group Capmark Financial Inc. (Platinum) Capstone Real Estate Services, Inc. CenterPoint Energy CharterMac Capital LLC (Platinum) Citibank (Platinum) Coats|Rose (Silver) Column Guaranteed LLC (Silver) DB Berkshire Mortgage (Silver) Enterprise Community Investment, Inc. (Silver) FDI Property Management Services Federal Home Loan Bank of Dallas ICI Construction, Inc. JPMorgan Chase (Platinum) Lancaster Pollard
29 1 20 8 11 10 4 23 31 17 2 27 37 18 40 12 39 24 9
Texas Housing Conference 2006: The Winds of Change
Locke Liddell & Sapp LLP (Silver) MMA Financial (Platinum) National Equity Fund (Silver) Novogradac & Company LLP (Bronze) O’Connor & Associates (Bronze) Orion Real Estate Services, Inc. (Bronze) PNC MultiFamily Capital (Platinum) Property Tax Advocates, Inc. Raymond James Tax Credit Funds (Bronze) Red Capital Group (Gold) Reznick Group, P.C. (Platinum) Stearns Bank (Bronze) TDHCA Texas Inter-Faith (Gold) UCP of Texas U.S. Bank National Association U.S. Dept. of HUD Wachovia Bank (Bronze) Wells Fargo (Bronze)
Conference Sponsors
Investment Builders, Inc.
MacDonald & Associates
Staff would like to thank
Diana McIver and her staff at
for all their additional help this year. Page 7
Conference Program Tuesday, July 25, 2006 Eighth Annual TAAHP Golf Tournament & 19th Hole Reception Falconhead Golf Course, Sponsored by: 1:00pm Boxed Lunch, Sponsored by: Solutions Plus, Inc. 2:00pm Shotgun Start
Wednesday, July 26, 2006 10:00am - 1:00pm Exhibitor Set-Up, Four Seasons Ballroom 11:00am - 6:00pm Registration / Information Desk Open, San Jacinto Ballroom Foyer
3:30pm - 4:45pm
Breakout Sessions Aftermath of Katrina / Rita: Recovery & Readiness, Four Seasons Ballroom A Learn how to deal with the aftermath of a hurricane, including the state and federal requirements for restoring your tax credit property, what you need to do to protect your partnership’s investment, and the potential restoration opportunities in areas affected by the hurricane. Moderator: Tim Kemper, CPA, Managing Principal, Reznick Group, P.C.
Panelists: Antoinette M. “Toni” Jackson, Attorney, Coats|Rose 1:30pm - 3:00pm Bill Wenson, President, Wenson & Associates, Inc. Opening Session: The Winds of Change, The Future, Four Seasons Ballroom A Linda McMahon, Senior Vice President, JPMorgan Chase As the winds of Katrina and Rita wreaked havoc with the Gulf Coast areas, creating Brooke Boston, Deputy Executive Director of Programs, TDHCA devastating losses of life, homes, and businesses, Texans stepped forward offering food, shelter, and employment to those in need. As we open our 2006 Housing Conference, Creative Financing and Gap Solutions, San Jacinto Ballroom East we are pleased to have Elizabeth Ames Jones, Chair of the Railroad Commission and Grants and soft dollars from a variety of sources are available to both profit and nonMike Gerber, Executive Director of TDHCA, offer their insights for the future. profit developments. Get insight from an administrator of these funds and hear from a Introduction by: Jim Brown, Executive Director, TAAHP Welcome Remarks by: Diana McIver, President, TAAHP Opening Comments by: Mike Gerber, Executive Director, TDHCA Michael Gerber, the Executive Director of the Texas Department of Housing and Community Affairs, began his employment on May 17, 2006. Gerber previously served in Governor Rick Perry’s Office of Budget, Planning, and Policy for two years and 16 years in Washington D.C. working for various agencies including the US Department of Housing and Urban Development. He also served as Legislative Assistant in the office of Senator Kay Bailey Hutchison and in the same capacity for Senator Phil Gramm. He received his undergraduate degree from George Washington University and an MBA from Marymount University.
developer-consultant about the benefits of these awards, and possible consequences. Also, learn how accessible these funds really are and listen to debt providers discuss debt structures, some old reliables with enhanced features, and some new trends. Moderator: Sally Gaskin, President, SGI Ventures, Inc. Panelists: Robert Onion, Market Director, Citibank Camile Pahwa, Vice President, DMA Development Company, LLC Ray Landry, Vice President, Davis- Penn Mortgage Company Robbye Meyer, Acting Director of Multifamily Finance, TDHCA Year 15 - Nonprofit Transfer Strategies for Expiring LIHTC Properties San Jacinto Ballroom West
Keynote Address by: Elizabeth Ames Jones, Chair, Railroad Commission Over a year ago Governor Rick Perry handpicked a sitting member of the Texas Legislature to fill a vacancy on the Railroad Commission of Texas. He chose, Elizabeth Ames Jones, a 6th generation Texan from San Antonio who had previously served in the Texas Legislature. Elected Chairman of the three member Commission last September, Jones is only the 4th woman to serve on the 114 year old agency. Along with her Legislative focus on energy issues, Chairman Jones’ service on the Urban Affairs committee gave her a keen understanding of the issues that affect our industry. Elizabeth and her husband Will are both graduates of the University of Texas at Austin and the proud parents of two college-aged children. Please join TAAHP in welcoming Chairman Jones to the Texas Housing Conference 2006: The Winds of Change.
Low Income Housing Tax Credit (LIHTC) properties developed in the early years of the program are reaching the end of the 15 year LIHTC compliance period, and are eligible for sale to their nonprofit sponsors. Also, the projects with tax credits allocated early in the program (before 1990) are not subject to extended use restrictions. Year 11 in the life of a tax credit deal is an ideal time to begin planning and taking action. We will discuss transfer strategies for the nonprofit sponsor, action plan for purchasers, and review partnership provisions including rights of first refusal, purchase options, exit taxes, and preservation of affordability.
3:00pm - 3:30pm Refreshment Break, Exhibit Hall, Four Seasons Ballroom Sponsored by:
5:00pm - 6:30pm Opening Reception, Exhibit Hall, Four Seasons Ballroom Sponsored by:
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Moderator: Mike Clark, Principal, Alpha-Barnes Real Estate Services Panelists: Gregory Griffin, Director, Disposition Manager, Enterprise Investment Community, Inc. Marian O’Conor, Assistant General Counsel and Chief Tax Counsel, Enterprise Investment Community, Inc.
Texas Housing Conference 2006: The Winds of Change
Conference Program Thursday, July 27, 2006 7:30am - 5:00pm Registration / Information Desk Open, San Jacinto Ballroom Foyer 8:00am - 9:00am Continental Breakfast, Exhibit Hall, Four Seasons Ballroom Sponsored by: 9:00am - 10:15am
Breakout Sessions Hot Equity Topics, Four Seasons Ballroom A
10:15am - 10:45am Refreshment Break, Exhibit Hall, Four Seasons Ballroom Sponsored by: 10:45am - 12:00pm
Breakout Sessions Examining Housing Markets in Texas, San Jacinto Ballroom East Our panelists will discuss the current state of the conventional and LIHTC apartment markets as well as the trends affecting affordable rental properties in Texas. The panelists will review the current market as seen from a market analyst / appraiser, a lender / syndicator, TDHCA, and a developer, and how each may view the same data and have different conclusions.
Prices have been high! Are they going to drop? What is the best way to get the best deal from your equity partner? Hear what this panel has to say about the latest interest hikes Moderator: Jerry Wright, Managing Director, Capmark Securities Inc. by the Fed and the impact on affordable housing equity. Moderator: Mike Sugrue, Principal, Solutions Plus, Inc. Panelists: Tom Dixon, Vice President, Boston Capital Nicole Flores, Senior Vice President, PNC MultiFamily Capital Mike Fowler, President, SunAmerica Affordable Housing Partners Marie Keutmann, Managing Director of Acquisitions, MMA Financial
Panelists: David Ross, Vice President and Director of Market Research, Capmark Finance Craig Young, Director of Business Development, O’Connor & Associates Deepak Sulakhe, Senior Vice President, Southwest Housing Tom Gouris, Director of Real Estate Analysis, TDHCA
Workouts: The Trouble with Troubled Properties, San Jacinto Ballroom West What are the characteristics of a troubled property? Is the trouble due to market or management? What are the steps to resolving issues with troubled properties? These and other questions will be discussed at this interactive session. Listen to the experts share their experiences from many perspectives, including that of attorney, syndicator, Designs for the Future: From Red to Green, San Jacinto Ballroom East developer / owner, and lender. Change has been sweeping our industry. Changing lifestyles, changing community ex- Moderator: pectations, and changing operational costs all drive design decisions ultimately affectEdwina Carrington, Principal, Reznick Group, P.C. ing your bottom line. Come meet with experts in green design, and building, to learn Panelists: how to meet these challenges and even help save on costs. Cynthia Bast, Partner, Locke Liddell & Sapp LLP Moderator: Chris Bergmann, Development Partner, Trammell Crow Residential Sandra Williams, Executive Director, Alamo Area Mutual Housing Association, Inc. Dakar Gibbs, Senior Client Manager, Bank of America Justin Ginsberg, Managing Director, CharterMac Panelists: Kelly Osburn, Principal and Vice President, Humphreys & Partners Architects, L.P. Frank Pollacia, Architect, Architettura Abbey R. Ehrman, LEED-AP, Contects, LLC Post Hurricane Insurance Woes and Your Bottom Line, San Jacinto Ballroom West Why is Wind Coverage so difficult to obtain in Tier I and II Counties? And, if available, why is it so expensive? How do insurers / reinsurers view my risk / exposures? What does the future hold for insurance premiums and coverages? A senior executive at an insurance wholesaler / intermediary company helps you understand the ins and outs of the insurance business and provides some clarification on the recent crisis involving availability and costs of Wind Coverage. Moderator: Mike Clark, Principal, Alpha-Barnes Real Estate Services Panelist: Scott Wolf, Senior Vice President, Colemont Insurance Brokers - Texas Texas Housing Conference 2006: The Winds of Change
12:00pm - 1:30pm Conference Luncheon: Legislative Update, Four Seasons Ballroom A Sponsored by: Public School Refinance was a hot topic in this year’s Special Legislative Session, with the burden of revenues for financing Texas schools transferred from property taxes to an all new Business tax! Come hear about this new tax and how it will affect your business, and what you might expect to see in way of property tax reform. In addition to state issues, we will have an expert on hand to update us on federal issues affecting the affordable housing industry. Moderator: Granger MacDonald, President-Elect, TAAHP Presenters: Cindy Lee, Associate, Cantey & Hanger. L.L.P. Scott Norman, Vice President, Texas Association of Builders Greg Brown, Federal Legislative Director, Tax Policy, NAHB Jim Brown, Executive Director, TAAHP Page 9
Conference Program 1:30pm - 2:45pm
Breakout Sessions Downsizing: When Your Market or Your Site Can’t Support 100 Units San Jacinto Ballroom East Texas is seeing a trend towards smaller apartment communities in smaller markets. The rural communities and smaller cities have unmet affordable housing needs, but these markets cannot support the 100 to 200 unit apartment communities of their larger metropolitan neighbors. And even in the larger cities, popular infill sites may call for a smaller development. Who makes loans under $1M and how do investors view these smaller markets? Hear from financial and development experts who have experienced success in the smaller markets.
3:15pm - 4:45pm Closing Session: Change Can Be Good - Moving Forward Four Seasons Ballroom A Sponsored by: It has been a year filled with change in the affordable housing industry, and we must take the lessons learned and use them to move forward. Listen to what industry leaders project for the future of affordable housing in Texas. Moderator: Diana McIver, President, TAAHP Panelists:
Moderator: Diana McIver, DMA Development Company, LLC
Elizabeth Anderson, Chair, TDHCA Jim Brown, Executive Director, TAAHP John Pitts, Attorney, John Pitts
Panelists: Brian Gallagher, Senior Vice President, CDT Ginger McGuire, Senior Vice President, Lancaster Pollard Sharon Baranofsky, Acquisitions Manager, National Equity Fund Dennis Hoover, President, Hamilton Valley Management
5:00pm - 6:30pm Tomorrow the Allocations, Enjoy the Evening Reception Exhibit Hall, Four Seasons Ballroom Sponsored by:
Addressing Fair Housing While Fighting NIMBY, San Jacinto Ballroom West
This session will discuss how developers can work with neighborhoods and tenant groups Conference Adjourns.......see you next year! to successfully address and fight NIMBY concerns. It will also address those issues that could potentially trigger Fair Housing Violations when dealing with community relations. Moderator: Antoinette M. “Toni” Jackson, Attorney, Coats|Rose Panelists: Robert Voelker, Shareholder, Munsch Hardt Kopf & Harr, P.C. Shad Bogany, Owner / Realtor, ERA Bogany Properties Steve Ford, Director, Resolution, Inc. Partnering for Success: What Makes Relationships Work?, Waterloo Whether you partner to alleviate financial risk, to gain experience, or for other benefits, Partnerships and Joint Ventures in the development of real estate can be a good thing - or a horrible disaster. Listen to those who have been there and learn from their experiences, both good and bad. Learn about the splits of developer fees, ownership interests and cash flow, and how to negotiate a good deal and avoid a tarnished reputation. Moderator: Tom Scott, CEO, Coach Realty Services Panelists: Ann Lott, President and CEO, Dallas Housing Authority Mark Mayfield, CEO, Texas Housing Foundation Barry Palmer, Director, Coats|Rose Wendy Melton, Vice President, DB Berkshire Mortgage
thanks everyone for helping to make this a record breaking conference!
2:45pm -3:15pm Refreshment Break, Exhibit Hall, Four Seasons Ballroom Sponsored by: Page 10
Texas Housing Conference 2006: The Winds of Change
TAAHP Board of Directors Officers: President: Diana McIver, DMA Development Co., LLC Past President: Jerry Wright, Capmark Securities Inc. President-Elect: G. Granger MacDonald, MacDonald & Associates Directors:
Don Bethel, Bethel Realty Co. Mike Clark, Alpha-Barnes Real Estate Services JOT Couch, Texas Inter-Faith Housing Corporation
Vice President: Tom Scott, Coach Realty Services Vice President: Mike Sugrue, Solutions Plus, Inc. Treasurer: Tim Kemper, Reznick Group, P.C.
Linda McMahon, JP Morgan CHASE Ike Monty, Investment Builders, Inc. Ron Williams, Southeast Texas Housing Finance Corporation Sandi Williams, Alamo Area Mutual Housing Association
Sally Gaskin, SGI Ventures, Inc Dennis Hoover, Rural Rental Housing Association of Texas Antoinette M. “Toni” Jackson , Coats|Rose Mike Lankford, Lankford Interests, LLC
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