Jan McCormick laughs when she remembers the pigeons crowding the windowsill outside the tiny office when she walked into NNEHIF in 1999. Since that day, she’s grown the asset management division she started into a team responsible for overseeing the host of properties NNEHIF manages in its equity funds. Though the growth McCormick helped shepherd for these properties has had a profound impact throughout Northern New England, this interview revealed the close ties she maintains with the network of affordable housing partners that help her team perform their duties each day.
1) How does your position as Vice President of Asset Management for NNEHIF differ from your counterparts’ role in conventional real estate?
Conventional developers aim for a return on their investments through annual income and the appreciated value of their properties. Though those sources of revenue certainly play a role in the profitability of our low-income housing tax credit (LIHTC) portfolio, they don’t represent the prime inducement for our investors. Instead, we focus on the operation of our properties to deliver expected investment return, especially the federal tax credits that represent the biggest financial benefit for them.
2) Traditional real estate portfolios diversify holdings to mitigate risk. Does that strategy apply to NNEHIF’s holdings? If so, how do your duties change to manage different categories of properties?
Though our projects are diversified by their geography and our development partners, the diversity that’s unique to our business is the types of properties we help to create. These include family-oriented workforce housing, elderly housing, and services-enriched housing for special needs populations. The latter is often the most time-intensive due to the requirements of this particularly vulnerable sector of tenants. But serving their needs may represent the best fulfillment of our affordable housing mission.
3) Enhancing long-term vitality of your assets is largely dependent on the property managers who maintain them. How do you work with them to protect your holdings?
Our property managers are responsible for both the physical care of our properties and the verification of that care through the regular financial reports they issue. They must also fulfill certain duties to maintain compliance with the properties’ LIHTC status, and submit reports on those activities as well. We analyze this information quarterly to monitor operating success and compliance. But we also perform annual site visits to get a real-world read on the people and properties behind the numbers.
4) How else do you work to meet LIHTC compliance requirements?
Compliance duties are led by an asset manager and shared among staff, but we also outsource compliance monitoring and provide a compliance consultant free of charge to our developers and property managers. That service supports the candid relationships we enjoy with these professionals. We’re fortunate to work with colleagues who help us identify and solve problems before they escalate.
5) Does that collaborative spirit extend to your other partners as well?
Absolutely. Effective asset management is proactive in nature, and depends on a dedicated team to keep things running smoothly. We hold our assets for 16 years, which is a long tenure for real estate. Our management is a dynamic process, made especially complex by the tax regulations in our industry. There are also a multitude of players involved. But one of the advantages of being a local LIHTC syndicator is the power of those relationships. These are people we’ve come to know and trust to work with us to get the job done.
6) What’s changed since you first started at NNEHIF?
A lot! Beyond the growth of our assets and the funds that power them, our department’s support of NNEHIF’s advocacy mission has been especially rewarding for me. Our expertise in asset management has granted us incredible insight into the complex requirements of our industry and the needs of the population it serves. Ultimately, we’re working to safeguard not only the value of our holdings, but the lives of the people they house. I can’t think of a better return on our investment than that.