By Ravi Malhotra
Originally published in NH&RA Tax Credit Advisor, February 2024
Most federal and state agencies aiming to spend their Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) funds for residential clients are finding out that it will not be easy. Most do not think of multifamily affordable housing when they design their residential programs. In focusing on single-family homes, they are learning the hard way that the single-family market is hard to scale. Ironically, a multifamily affordable housing-focused program would expend their funds cost-effectively, simply, and in alignment with Justice40 goals, while offering a scalable and replicable solution. Unfortunately, these agencies will need to be convinced that multifamily affordable housing is not “hard to serve,” (a myth created by implementers who do not understand this market) but is, in fact, their salvation. Beyond that, they will need to create tailored programs that can serve multifamily affordable housing at scale. This advocacy now falls on your shoulders.
To complement the IRA and BIL Resource Guide for Multifamily Affordable Housing that was announced in Tax Credit Advisor’s January issue, we have produced a document that (1) serves as a roadmap for agencies to expend their funding allocations, and (2) debunks the myth that multifamily affordable housing is hard to serve. The multifamily affordable housing sector needs to use these documents to push for more than its fair share of the IRA and BIL pie, building its advocacy efforts around the point that this market offers an unmatched solution for getting the money spent. The new resource, Designing, Launching, and Managing Clean Energy Programs for Multifamily Housing, contains guidance such as:
- Multifamily affordable housing programs work best when designed and implemented on a whole-property basis, rather than serving individual apartments, one at a time.
- For myriad reasons, the same program design cannot serve single-family and multifamily, and multifamily affordable housing is a different animal altogether.
- Programs should take advantage of established strategies for the multifamily affordable housing segment to simplify the qualification, intake, processing, invoicing, and reporting process.
- Programs should leverage a “one-stop-shop” approach, where the program implementer offers a simple, yet turn-key solution that is hassle-free for the multifamily affordable housing customers.
- Programs should offer “braiding” of funds from various programs to reduce or eliminate the investment needed from property owners.
- Programs should have a “mass customization” approach wherein every project is tailored to drive the highest benefits based on each property’s specific needs. A one-size-fits-all program can only offer very low-impact solutions.
- Programs should lean on existing successful programs and partnerships. Forming new ones is not a good approach because it takes more time and resources and the program ends up competing with existing successful programs, rather than partnering with them.
These resources can help government agencies launch their programs quickly to achieve the desired results while complying with IRA and BIL requirements. Those interested in disseminating this information to state agencies and other key stakeholders can:
- Contact us here: https://www.icastusa.org/connect/
- Access the guidance document: https://www.icastusa.org/education/irabil-mfpd/summary/.
The Resource Guide can be accessed here: https://www.icastusa.org/education/irabilresourceguide/