ABA Banking Journal - November/December 2016 - 57


> CORPORATE SOCIAL RESPONSIBILITY

Navigating the Complexities
of Affordable Housing Finance
BY COREY CARLISLE

FINANCING HOUSING DEVELOPMENT has many challenges, but
keeping that housing stock within reach of a growing segment of low- to
moderate-income households can be nearly impossible. The chief culprit here
is the widening gap between construction and maintenance costs and the
rents most can pay. To bridge this divide, affordable housing developers and
lenders turn to various (often scarce) subsidies.
To showcase just how complex and
difficult it can be to underwrite these
projects, or ensure they "pencil out,"
the National Housing Conference
and Urban Institute released a new
interactive feature in July, "The Cost
of Affordable Housing: Does it Pencil
Out?" On the site, which uses real data
from the Denver metro area, users can
input various data points to achieve
a positive net operating income on a
typical 50- and 100-unit apartment
building. Trying several scenarios, they
quickly learn that an enormous amount
of subsidy is needed to keep rents
within reach for those with modest
means. Give it a try at apps.urban.org/
features/cost-of-affordable-housing.
TD Bank, winner of the ABA's 2016
Community Commitment Award
for community and economic
development, has been working to
positively change market conditions
in East Baltimore by using its housing
investments to drive neighborhood
improvement. The $266 billion asset
bank-along with its partner, TRF
Development Partners-began in the
Oliver neighborhood, known for the
suffocating crime and blight famously
portrayed in the HBO series The Wire.
Despite these obvious obstacles,
the bank believed an opportunity
to resuscitate the market existed;

specifically, that Oliver's proximity to
the Johns Hopkins University medical
campus created a unique opportunity
to rebuild an area encompassing more
than 600 properties.
Using a combination of tailored
financial instruments and federal
historic tax credit equity investments
from the bank, the redevelopment
work has already created 175 new
and or rehabilitated homes on formerly
abandoned buildings and consolidated
more than 100 vacant lots. In the
next year, TD expects to complete an
additional 75 rehabs. This will drop
the overall vacancy to about 5 percent
of all properties; in 2008, the vacancy
figure was 45 percent.
For many community banks, funds
from the Federal Home Loan Banks'
Affordable Housing Program provides
the critical X-factor for ensuring
these projects stay affordable,
or get approved at all. The AHP
is a competitive grant program
enacted by Congress in 1989 and is
administered regionally by each of
the 11 Federal Home Loan Banks.
Through 2014, AHP has disbursed
more than $4.8 billion towards the
purchase, construction or rehabilitation
of more than 758,000 units of
affordable housing.

For the $353-million Essex Savings
Bank in Essex, Conn., AHP funds
from the Federal Home Loan Bank of
Boston led to funding Essex Place, a
22-unit elderly housing project, serving
residents starting at 80 percent of the
area median income, with some units
reserved for those below 50 percent.
And at the $1 billion Washington
Financial Bank, based in Washington,
Penn., a $270,000 AHP grant from
the Federal Home Loan Bank of
Pittsburgh provided the gap needed
for 27 low- and moderate-income
homeowners to make repairs and
improvements to their properties as
part of partnership the bank has with
the Redevelopment Authority of the
County of Washington.
Finding ways to make decent housing
accessible low-income residents is
a complex job, requiring just the
right pencil.
COREY CARLISLE is SVP for
community engagement at
ABA and executive director of
the ABA Foundation.

aba.com/BankingJournal | ABA BANKING JOURNAL

57


http://apps.urban.org/ http://www.aba.com/BankingJournal

Table of Contents for the Digital Edition of ABA Banking Journal - November/December 2016

Chairman’s View
Upfront
Picture This
Banking’s ‘Amazon Moment’
Special Report on Innovation and Technology
Building an ‘Internet of Value’
Do You Do What the Data Tell You?
Innovation in the Bank
Core Exercises
Cover Story Pillar of Her Community
Maintaining a Commitment to Ag Customers
Who You Gonna Call?
Anti-Money Laundering
Power Up Profile
Compliance ‘When Can I Call My Customer?’
Risk Management
ABA Compliance Center Inbox
From the States
Corporate Social Responsibility
Index of Advertisers
ABA Banking Journal - November/December 2016 - bellyband1
ABA Banking Journal - November/December 2016 - bellyband2
ABA Banking Journal - November/December 2016 - cover1
ABA Banking Journal - November/December 2016 - cover2
ABA Banking Journal - November/December 2016 - 3
ABA Banking Journal - November/December 2016 - 4
ABA Banking Journal - November/December 2016 - 5
ABA Banking Journal - November/December 2016 - 6
ABA Banking Journal - November/December 2016 - 7
ABA Banking Journal - November/December 2016 - Chairman’s View
ABA Banking Journal - November/December 2016 - 9
ABA Banking Journal - November/December 2016 - 10
ABA Banking Journal - November/December 2016 - Upfront
ABA Banking Journal - November/December 2016 - 12
ABA Banking Journal - November/December 2016 - 13
ABA Banking Journal - November/December 2016 - 14
ABA Banking Journal - November/December 2016 - 15
ABA Banking Journal - November/December 2016 - Picture This
ABA Banking Journal - November/December 2016 - 17
ABA Banking Journal - November/December 2016 - 18
ABA Banking Journal - November/December 2016 - 19
ABA Banking Journal - November/December 2016 - Special Report on Innovation and Technology
ABA Banking Journal - November/December 2016 - 21
ABA Banking Journal - November/December 2016 - 22
ABA Banking Journal - November/December 2016 - Building an ‘Internet of Value’
ABA Banking Journal - November/December 2016 - 24
ABA Banking Journal - November/December 2016 - 25
ABA Banking Journal - November/December 2016 - Do You Do What the Data Tell You?
ABA Banking Journal - November/December 2016 - 27
ABA Banking Journal - November/December 2016 - insert1
ABA Banking Journal - November/December 2016 - insert2
ABA Banking Journal - November/December 2016 - Innovation in the Bank
ABA Banking Journal - November/December 2016 - 29
ABA Banking Journal - November/December 2016 - 30
ABA Banking Journal - November/December 2016 - Core Exercises
ABA Banking Journal - November/December 2016 - Cover Story Pillar of Her Community
ABA Banking Journal - November/December 2016 - 33
ABA Banking Journal - November/December 2016 - 34
ABA Banking Journal - November/December 2016 - 35
ABA Banking Journal - November/December 2016 - 36
ABA Banking Journal - November/December 2016 - 37
ABA Banking Journal - November/December 2016 - Maintaining a Commitment to Ag Customers
ABA Banking Journal - November/December 2016 - 39
ABA Banking Journal - November/December 2016 - 40
ABA Banking Journal - November/December 2016 - Who You Gonna Call?
ABA Banking Journal - November/December 2016 - 42
ABA Banking Journal - November/December 2016 - 43
ABA Banking Journal - November/December 2016 - Anti-Money Laundering
ABA Banking Journal - November/December 2016 - 45
ABA Banking Journal - November/December 2016 - 46
ABA Banking Journal - November/December 2016 - Power Up Profile
ABA Banking Journal - November/December 2016 - 48
ABA Banking Journal - November/December 2016 - Compliance ‘When Can I Call My Customer?’
ABA Banking Journal - November/December 2016 - 50
ABA Banking Journal - November/December 2016 - Risk Management
ABA Banking Journal - November/December 2016 - ABA Compliance Center Inbox
ABA Banking Journal - November/December 2016 - 53
ABA Banking Journal - November/December 2016 - 54
ABA Banking Journal - November/December 2016 - From the States
ABA Banking Journal - November/December 2016 - 56
ABA Banking Journal - November/December 2016 - Corporate Social Responsibility
ABA Banking Journal - November/December 2016 - Index of Advertisers
ABA Banking Journal - November/December 2016 - cover3
ABA Banking Journal - November/December 2016 - cover4
http://www.nxtbook.com/naylor/BAKS/BAKS0318
http://www.nxtbook.com/naylor/BAKS/BAKS0218
http://www.nxtbook.com/naylor/BAKS/BAKS0118
http://www.nxtbook.com/naylor/BAKS/BAKS0617
http://www.nxtbook.com/naylor/BAKS/BAKS0517
http://www.nxtbook.com/naylor/BAKS/BAKS0417
http://www.nxtbook.com/naylor/BAKS/BAKS0317
http://www.nxtbook.com/naylor/BAKS/BAKS0217
http://www.nxtbook.com/naylor/BAKS/BAKS0117
http://www.nxtbook.com/naylor/BAKS/BAKS0616
http://www.nxtbook.com/naylor/BAKS/BAKS0516
http://www.nxtbook.com/naylor/BAKS/BAKS0416
http://www.nxtbook.com/naylor/BAKS/BAKS0316
http://www.nxtbook.com/naylor/BAKS/BAKS0216
http://www.nxtbook.com/naylor/BAKS/BAKS0116
http://www.nxtbook.com/naylor/BAKS/BAKS0615
http://www.nxtbook.com/naylor/BAKS/BAKS0515
http://www.nxtbook.com/naylor/BAKS/BAKS0415
http://www.nxtbook.com/naylor/BAKS/BAKS0315
http://www.nxtbookMEDIA.com