 Good afternoon. Thank you for joining us. My name is Renee Kuhlman and I'm with the National Trust for Historic Preservation. I'm standing in for a good colleague of mine, Cindy Heisman, who's the Executive Director of the California Preservation Foundation. She is a co-chair with me on a project called the Preservation Priorities Task Force, which is a joint project of the National Trust and the National Preservation Partners Network. Our speakers today are William Towns with Gorman & Company and Merrill Hoopengardner, who is the President of the National Trust Community Investment Corporation. Their full bios are available in the conference materials and we're so honored to have them with us today. This session, Planning for Preservation Solutions for Affordable Housing, is a discussion about historic preservation's role in addressing the affordable housing crisis, a crisis that challenges our perceptions of heritage conservation. Next slide. The national housing crisis knows no boundaries. It actually affects communities of all sizes. And though there are many factors affecting the supply and cost of housing, historic preservation is viewed as an underutilized resource to create and retain affordable housing. It has also been cast as an impediment to creating new housing, creating misperceptions about the impact of historic preservation. Now a range of solution-oriented challenges and opportunities are outlined in the issues brief created by that Preservation Priorities Task Force that I talked about earlier. And the National Trust and the National Preservation Partners Network joined forces in order to help statewide and local preservation organizations address four significant interrelated issues facing the preservation movement, including affordable housing and density. And I'll review a few points to help set the stage for today's conversation. Next slide. Research shows that historic districts often have higher population densities than other areas and cannot accommodate more housing without requiring demolition. Next slide. Historic districts impact a relatively small portion of properties in most communities. An average of about 4% of properties are landmarked across 50 major U.S. cities. Data also shows that historic districts and older neighborhoods generally have higher population densities than other areas of major cities. Historic districts often contain a diversity of older multi-unit housing types, such as duplexes, cottage courts, walk-ups, and courtyard apartments. Contrary to perception, additions and new infill construction are allowed in historic districts, and many local commissions are allowing and encouraging accessory dwelling units and other ways to incrementally add more housing units. And in almost every community, there is a surplus of parking lots, vacant lots, vacant buildings, and underused properties that offer abundant opportunities to add density without demolition. Next slide. So preservation can also help conserve existing affordable housing and help create new affordable housing. And you'll see these examples come from California where Cindy is located and where the California Preservation Foundation is working on this issue. Next slide, please. So another misperception is that, sorry, I can't see the slide, is exclusionary and makes housing unaffordable. And one of the things that Cindy's research has shown that 60% of the existing affordable housing in the United States is found in unsubsidized privately owned buildings, many of which are over 50 years old. So existing housing must be part of the solution to meet the demand. A recent study by the National Council of State Housing Agencies found that the average new construction costs for low income housing tax credit projects is about $209,000 per unit, while the average acquisition and rehabilitation costs for the low income housing tax credit projects is just over $153,000 per unit. So between 1997 and 2019, the Federal Historic Tax Credit supported the rehab of over 291,000 housing units and created over 312 new housing units across the country. And more than 172,000 of these units provide low and moderate income housing. And another example, another study which was commissioned by our friends at the LA Conservancy found that 12,000 new housing units were created through adaptive reuse of historic buildings over the last 20 years. And California Preservation Foundation's research found that in California, over 30% of the Federal Historic Tax Credit projects improved existing multifamily housing or created new housing through adaptive reuse. Next slide. So the response to the misperception is that we should be saving as many buildings as possible to avoid carbon emissions from new construction and to retain existing affordable housing, most of which is in older buildings. And that's because a lot of people have this misperception that it's more energy efficient to scrape one house and build new energy. And so the response is that we should be saving as many buildings as possible. Next slide. Another misperception is that it's more energy efficient to scrape one house and build new energy efficient duplex. And the following resources are examples of why we should be saving and rehabilitating existing housing to meet the dual imperatives of retaining housing stock and reducing the impact of demolition. The sustainable aspects of utilizing an existing built environment. For example, in Britain, climate change construction companies told to stop knocking down buildings. The data from architecture 2030 projects show that embodied carbon account for more than 70% of emissions from new construction over the next decade. So we should be saving as many buildings as possible to avoid carbon emissions from new construction and to retain existing affordable housing. And again, this can be seen in the greenest building report. And demolishing all old housing is the least sustainable option. Old houses, even the speculative development of previous generations were built to last hundreds of years. We need to keep these older buildings out of landfills and avoid carbon emissions that occur when they're replaced. And it looks like my colleague Cindy Heitzman is able to join us now because she has had a technical difficulty. So I just want to pause here for a second to see if she can join on screen or has the ability to join. There you are, Cindy. Hey. Yeah, definitely technical difficulties today. So with apologies and thanks, Renee, for jumping in. Yeah, I think in kind of enclosing what we really want to the point we want to make here before introducing the speakers is that building more housing is necessary. There's no question, but it's not a complete solution if it includes demolition and replacement of existing homes. The national demand supply gap of over 6.8 million homes means that we must build 700,000 homes per year. We as preservationists must be part of the solution and re-envisioning historic preservationist role in tackling this problem is the subject of today's program. So on behalf of Renee and myself, I would like to, it's our pleasure to introduce Dr. William Towns and Raul Hoopengardner. And like magic, we're here. Great. Thank you so much. Well, as I am Merrill Hoopengardner and the President as Renee said of the National Trust Community Investment Corporation and TCIC, we are the text credit syndication arm of the National Trust for Historic Preservation. So we were formed about 22 years ago to raise capital through initially the federal historic tax credit and we've moved on to also use the new markets tax credit and solar tax credits to do community revitalization work around the country. Speaking for myself, I got into this field initially through the affordable housing door, wanting to have a career in affordable housing and community development finance. And through that, found my way to tax credits and through that found my way here at NTCIC. So I'm excited to host today, Will Towns, who's got a tremendous amount of expertise in the affordable housing field. Will, I was hoping you could kick us off by telling us a little bit about what brought you here, your preservation and affordable housing background and maybe even tease us with one of your favorite stories or projects that have the intersection of these two things and then we'll dive into some other questions. Oh, great. Well, first of all, thanks for having me. I greatly appreciate it. And this is, I think, as many of us I think are on this Zoom or on this conference. It's an incredibly important time right now to really be thinking about the impact of what affordable housing, particularly through preservation is doing. We all I think you can recognize that the need supply is outstripping demand. And I think we have to really sort of think about and appreciate the role that historic preservation can do in helping to not only relieve some of that pressure, but some of the other benefits of providing affordable housing and housing in general through preservation. And so my interest first began in affordable housing, really as if you can believe it as a child at seven years old, growing up on the south side of Chicago. My family then moved north to the north side of the city, where even at that age I kind of understood and recognize some of the drastic differences in the housing types and quality from the south side moving to the north side of the city. And that sort of piqued my curiosity into seeing how in the important role that zip code sort of plays in people's well being and living. And so that sort of set me out on a mission to really sort of get involved in my first job out of college out of undergrad was at an affordable housing developer. And so I had an opportunity the company had just started up. We would argue that at that point we couldn't spell HR. It was, you know, really just a small group of people were really trying to do some good by providing high quality affordable senior housing is where I originally recently sort of started. And inevitably, you'd be working in these communities and neighborhoods, and you just come across a building that for a number of reasons just wasn't moving. It's something they can for an extremely long time. And you know, no one could figure out what to do. And it was through historic tax credits that we converted an old high school into the Joliet High School in Illinois, into some senior housing. And that was our first sort of foray into historic preservation adaptive reuse. And since then that's been an important tool within the work that I have done. Now, you know, I'm the national market president of community revitalization and public housing at Corman and company. We are a national affordable housing developer. You know, commonly ranked in the top 10 for the types of number of developments and types that we've done. And so we have run into these properties types throughout our career. And one particular one and I think I'll give two quick examples of some projects that I think really sort of touch at what we're talking about today. And I think you'll see in the variety and impact of what we're doing, the role that historic preservation really plays in the roles that we're doing. So imagine if you can, we're in Jefferson, Wisconsin, and there is an old manufacturing facility, furniture warehouse that is sitting there. Again, has been sitting there for a number of years. It's become dilapidated. No one sort of really kind of figuring out what to do. And we identify this property and try to figure out how can we provide some house mixed income housing that we know is needed in the downtown Jefferson area. And so we looked at this project and was able to do some history and research. And this is where I think, you know, these are always partnerships with local communities. And in some cases, historic consultants, but we're able to secure this property and turn that into 3612 and three bedroom units at 50% AMI and 60% AMI. So again, this was this isn't a case of preserving existing housing, but this was taking an adaptive reuse and creating more affordable units in a place that prior to that didn't have it. It has our normal sort of mixture of financing, which I know we'll talk more about, but it was 9% tax credits historic. We had a HP and federal home loan bank and home and state housing tax credits and was able really to sort of put that together in a way that has now been providing a number of high quality units for the individuals and families in the Jefferson area. And so again, taking a former manufacturing building and converting that into housing, I think is one excellent example of a way that we can preserve affordability through historic tax credits in an area that is too expensive to rebuild new and had a property that the city was trying to figure out what to do with and so they were able to help us there. And before you tell us about your second example, I wonder if you can do some acronym busting for folks in the crowd who might not be affordable housing experts. AMI was one of the words you used we joke sometimes in historic tax credit land that historic deals give you the best scrabble words because everything. Q, but then affordable housing a lot of things start with an a so you're not going to get as many scrabble points but unpack that a little bit for everybody. And I apologize for that so that when I was saying 50% of AMI we're talking about the area meeting income of the residents and of the area that live within those facilities. And so those are important numbers to consider and really sort of helps us set the rents at what we believe what we know and believe is an affordable rate. As we sort of go through that and then the HTC's that's the historic tax credits. And that comes both at a federal level. And in some cases, also at the state level. And so you have those sort of two tranches of capital that are there in order to help develop these properties. That's great. Thanks so much. Do you have another example in mind of one of your favorite ways that you see the intersection of affordable housing and historic preservation. I do and this one is in fact, one that was developed by Pola and more acronyms. This is the preservation of affordable housing, their organization out of Boston I happen to sit on their board as well. And they were able to preserve 113 units of affordable housing in a project that was originally a tool and sewing machine factory. That was converted to affordable housing back in 1970. So an early adaptive reuse project. And in 2017, we were able to acquire the property and rehab that update that building. I was a $9 million renovation using again low income housing tax credits, historic tax credits, and then some other state and local funding sources to again preserve that property again for the next, you know, foreseeable 50 years or so, as we sort of do that. And so again, we have one example where we have an existing manufacturing building where we converted and preserve the ability for residents to stay and live in affordable housing in the communities they know. And in the second case, we had an existing previously converted building that if we didn't step in to acquire this property, it would have gone market. And so we were able to acquire that updated. These aren't easy to update but we update that within the historic code and then still preserve those units for on for affordability for the on the continuous future. And I love that example because it shows one of the intersections where we actually use the same word in different contexts in the two different fields of housing and historic preservation. So I wonder if you could tell us a little bit more about your thoughts you're straddling both in your work. Many times you're trying to preserve the affordability of units. So the places that people live remain affordable to the people who currently live there, or to people who might live there in the future. So you don't, as you say, go to mark go market and have affordable units turn into units no longer affordable to people in the community. Similarly, historic preservationists are trying to make sure that the historic assets in the community remain, even if they're adaptively reused into something else. I'm curious, especially since you spend a lot of time, probably with affordable housing hat on primarily how you think about that word preservation as it straddles both sides of those industries and work that Gorman and others are trying to do. Yeah, it is a word that is often presents a lot of confusion. Right. And as you sort of indicated, there's just straight preservation. There's preservation, historic, and then there's affordability preservation. And sometimes you're doing one the other sometimes we're doing a combination of each. And I think it's important, you know, not only for our audience, but for our communities to really sort of understand the differences between those. And I think what what's important and what I've seen from talking to some community groups, in some cases, just preserving the historic structure, regardless of the use is incredibly meaningful to our community members. These are places perhaps where their family members have worked in the past and has really sort of paved the way for their families to thrive. This may be an old school where multiple generations have gone. And they just, again, to be able to walk through the halls and sort of look at whatever the adaptive reuse is of those properties is meaningful to to those community members. And so, yeah, we do have to sort of look at how we how we do that. We try to blend all of those in where we can so wherever we're doing even an adaptive reuse for affordability. We try to again, historically, sort of store as much information as we can about those properties. So we have within the halls, old photos of the workers that were there. Other materials and things that may have take place in the building. We do an historic search of the property who live there. If there anyone famous those sorts of things and try to preserve the memories and the impact that those communities have had, as well as then the affordability by the conversion of the housing. I can appreciate that one and one of our favorite projects that we financed at NTC I see we've also done some school rehabs. And I think senior housing is a common adaptive reuse you some of the challenges of doing schools are alleviated a little bit when you're doing senior housing because it's actually helpful to have wider hallways and wider doors because you might need that for accessibility reasons and you might still want the cafeteria or the gymnasium so you have community center space built in and in one of our projects one of the tenets of it used to be a student at the school and so you're preserving both that tangible heritage and that cultural heritage at the same time and embodied in a single person who also has that memory. And I think then you, you know, continue to share that with other community members and and the next generation. We've gotten one question from the audience that I might go ahead and stick in here because I think it could help us get into some of the other questions that we wanted to talk about today. In many cases historic preservation does end up being taking a great historic asset in the community but turning it directly into market rate housing. And, and we see that in our work about a third of NTC I sees historic tax credit investments include housing, but many are market rate or mixed income housing not all are affordable housing. And so I'm curious as you all are assessing whether you can take a historic building and make an affordable housing project. How do you think about going about that so the property doesn't just immediately go from either a market rate to a market rate use or a warehouse to a market rate use how do you add affordable units. It is a challenge and in Chicago as an example, there's a case in point to what you're directly saying the old Chicago Tribune Tower, which was converted into condos. And I believe the entry point to acquire when these condos is a million dollars. And so we're saying hey we can see how in market rate situations, these properties are converted particularly depending on location so forth into this and at a million a unit, you know we can almost get anything to work financially you would think, depending. But what we try to do is, you know, we really try to look and see where there's opportunities. We know that because of the historic tax credits and other sort of financing. It does help us in many cases meet some of the requirements that are necessary and we also think important to preserving the structure of the building. But in those cases, we still find in many cases that it's still cheaper to do the adaptive reuse and preserve it as affordable, then build new construction, particularly in the current sort of interest rate environment. Construction costs, supply chain, those sorts of things. There are significant advantages in this current market and looking at ways to preserve them. The other challenge we face though is when these are just on the open market, right, so then we're competing against for profit, fully for profit market rate developers. Gorman is a for a for profit developer. And that is a challenge because we're often seeing sometimes we're just outbid on land and properties and so we work with local community groups we work with local officials and things to try to. Identify these buildings where we can and preserve some of those or as many as those as we can to have some ability for those who've grew up in those communities to remain and be able to stay. That makes sense to me when we think about things from the financing perspective being a syndicator of historic and new markets tax credits. Historic is indifferent as a tool to affordability new markets on the other hand or the low income housing tax credits, not so some might be asset based some might be place based some might be income level based. And so we see a lot of developers thinking about the three legs of the stool that are both sources and uses right how much is it going to cost to rehab my building and how am I going to pay for it. But also as you were suggesting in the Chicago example, what are people going to pay for it on the other side right then you're going to have to operate the property if only, you know, depending on the location or depending on the use or how you develop the property. You know, if you want to be able to make it available to low income people you have to keep the sources and uses down. You can't carry such a high mortgage that then as you pass that cost on to your tenants, no one's going to be able to pay for it. Or you might have to add other subsidy to the project and then at a certain point I think people find that you can collapse under the weight of layering all the different things together. We love that right. We get excited about all the different ways that you can add 50 different sources to a structure chart, but it comes with complexity, both and cost. I started my career as a tax credit attorney and we joke, not entirely jokingly that some of these rules are really job security for tax lawyers and accountants. And so you want to make sure that all the fanciness of creating those boxes and arrows on the structure chart doesn't actually absorb all of the value that's meant to get to the community. And I think maybe that could kind of kick us off into the next part of our conversation to think about some ways we could look differently at what's working and what's not working at the intersection of historic preservation and affordability. I mentioned to you, Will, we had a staff retreat last week and we are reading as a team the book called Courageous Cultures. And one of the frameworks in it asks people to rethink how they're doing business and how they're working together. And I love the acronym. It's called UGLY, so that's something that people can remember. But it's a way of looking at what are we underestimating in the work that we're doing? How could we do it better? What's got to go? What are we doing that we should just stop? It's not serving us anymore. It's antiquated. Where are we losing? You know, we're trying hard, but we're just not getting there. And where are we missing the yes? So I wonder if we could use that as a little bit of a framework to talk about some of the ways that we could do better, especially starting with the underestimating. What are we underestimating for how we could do better using historic preservation resources to solve the nation's affordable housing crisis? What are we just not seeing or we're underestimating some of the challenges in the market? Yeah, and I think, you know, and I'd love to hear, you know, some of the results from your retreat and how you're sort of thinking about it. Because I think this is a point where we may have to have multiple solutions and multiple conclusions on what we're underestimating. But but but I think and this has been, I think a long running issue is that we continue, I think, to just underestimate the importance of the role that preserving these units had. And again, there are some challenges in that process, but we're not going to newly construct our way out of the situation. Just cost wise, time wise, demand wise, it's just not functionally available. And so to me, I think it really is sort of reexamining and sort of underestimating the demand and the benefits that come with looking at preservation. But I'd be very interested in what your thoughts are and what kind of conclusions are you and the team has come up with about this question. I think one thing we we talk about internally is, you know, back to that part of the conversation of needing to have sources and uses and what people can pay for it all in sync. I think it's easy to underestimate any one of those pieces. And then projects just can't move forward because you have one or two, but not all three of those things. And as you mentioned, with a rising interest rate environment and a higher construction environment, being able to pull all those different pieces together is complicated and challenging. And I think sometimes people might underestimate actually how complicated it is and that so many different stakeholders need to be involved at the state, federal, local level to make that happen. And I know you've done a lot of stakeholder related work in your projects. I wonder if you have any ideas for how that has worked successfully, right? If you if you estimate correctly how stakeholders need to be involved, what does that look like? I mean, for us, you know, the stakeholders, the residents in the community is really at the core of the work that we're doing, that we believe we can leverage our ability to sort of bring in resources to not only deal with the structure of the building, but really help the community overall. So you can imagine, you know, in talking about complexities, you try to close one of these transactions. You might have 30 people on the Zoom or the call, all from different organizations, all with slightly different timelines and needs, and you're trying to coordinate all these things to sort of get together. That is an effort where most of those people on the line are being paid to be there to try to get it to close, kind of as you said, sort of job security. The community members are there for a different reason, right? And they're there to ensure that they're not overlooked. And I find them to be a very powerful sort of team member. And so we start actually with the community and the other stakeholders collectively as a part of the team with a seat at the table and sort of really sort of understanding what are the concerns that they might have. And then also having them sort of understand the concerns of the financing structures and the lenders and those sorts of things and helping them sort of understand why something might take so long or why something is needed. It's also helpful for the lenders, particularly in some of the state and local officials to hear from the community members what they're looking for and why this is important and why they want it preserved and those sorts of things. And so we feel like having multiple voices at the table. Really, I think allows us one to stay focused on what our ultimate goal is in sort of developing, acquiring these properties, but also to ensure that they have some input on the types of amenities and things that we're trying to bring in that have access to some of these local jobs that are created through rehab and and development and construction and that we also allow them to understand and hold us accountable. Elected officials, we as developers lenders and those things that we can try to stay as close to the timeline and track as possible. In many cases, they have seen these properties over and over again be talked about and have nothing happen. And so some of them sometimes become skeptical lenders are like, yeah, we'll figure it out. But really sort of coordinate these things in a way that we collectively come to the table. Everyone bringing their skills and assets equally to the table to sort of bring this along is one way that you know we've really sort of look at stakeholder engagement across the board. As a policy and I would say just quickly, there's three things that I sort of try to do here, listen, understand and support. So I try to listen to my lenders and try to understand what they're saying I'm listening to our attorneys I'm listening to community groups. I'm hearing what the city challenges are, and then trying to collectively leave these things together in a way that sometimes they seem just opposed to each But really sort of cutting through a lot of that red tape to try to get ourselves to a close and a project that can open for the residents. I love that perspective it reminds me a little bit of why I've been moving incrementally in my career closer to the ground. I think starting as an attorney, it can be even when you're doing this really impactful work and affordable housing and community revitalization. It's a lot of paper and a lot of financial spreadsheets and it can seem like just another structured finance product. I love the way you describe centering it around the residents, because it's the place they're going to live. It's, it's their actual life and shelter safe affordable home. It's not just a financing structure and I think sometimes those of us who do repeatable transactions have some expertise to bring because we have done some of that before. And that's a resource that's brought to bear, even if that you can be frustrated. Well, we do a lot of community facility transactions so it might be the supportive services that are in a neighborhood that has affordable housing the school health care center, etc. And usually those are developers and project sponsors that are only ever going to do this once it's the building that they operate in. So our work is to help simplify it for them and to translate the complexity of the different tax related structures, their work is to actually do the services they're doing in the community. I think if we underestimate that like who is doing each of those roles or we underestimate the value of those different things that people bring to the table we can push people too quickly or we can overlook what people are really solving for. So I really appreciate you highlighting that part of stakeholder engagement. It's not just the people with the money. It's the people who are going to or the people with the resources. It's the people who are going to be the beneficiaries of all this work that we do. I wonder if there are things if we switch gears and get from our you to our G or there are things that we're doing in the field right now that should go right where they're just not serving us anymore. Maybe we're beating our head against the wall a little bit too much. I always love the Einstein definition of insanity doing the same thing over and over again expecting a different result. I feel like that sometimes in our work. What are some examples you see if things maybe we just should stop doing over and over so we actually can get a different result. Well, this is a very dangerous question given the amount of challenge that's here. But but I think in general, just the the amount of red tape that is necessary to get through these things and the multiple steps that need to be repeated. You just have to produce several things because one slightly different for this lender or this investor or this city process and those sorts of things and you've got a separate historic process with Shippa and that sort of thing. And one may overrule the other so you get clearance on one side but someone else may have a comment. And so we could really I think streamline the process that we can get these varying organizations and this is me, you know, wishing upon a star. That we can get an agreed upon set of tasks and things that are acceptable to all parties. Then I think that that would be one sort of thing that's the enormous amount of red tape and things that are there and as you sort of indicated, and this is no polk out attorneys I think they're incredibly important to be a part of the process. But you know as you start to add new markets tax credits and historic tax credits and these sorts of things. The legal fees really start to add up I think it's an important component, because when you don't have that structure or legal good consulate good legal consulate place. Things go I've seen things go incredibly wrong, but it's just a tremendous amount of fees and some of that is just because they're having to review multiple documents on the same transaction if we could sort of streamline that a bit. Not only will it speed up the process, but it may reduce some of the costs in a way and get us moving forward slightly quicker. I can see that and as I think about ways that maybe that could be done. I know one of the things that extends the timeline and adds to the amount of documents produced or reviewed is slight incompatibilities between programs. So we use a lot of federal tools but if the timeline is off right we get we just one more new markets allocation last week. Well now we're flooded with intakes, which is fantastic there's so much demand for adaptive reuse of historic properties in low income census tracks around the country. But we have it sometimes and we don't have it others because that's the way Treasury runs the program. So then people are trying to get financing lined up around when this unique source of capital is available and sometimes it is and sometimes it isn't. Or they're trying to access HUD related programs and HUD might say oh well we don't fast track this loan approval if you're doing historic tax credits. They just categorically might say that's going to be too cumbersome so you can't do that instead of you know aligning some things. Or we find in working with state historic preservation offices or the National Park Service their review timeline might not match the development timeline. So people have to start and stop and start and stop to get to an approved preservation approach for what they're doing and I think time is money. It was professional services and so if you're not able to pull everything together at the same time and work in a concerted effort towards a financial closing the longer you spend. Unfortunately the more it's going to cost and that's a real barrier especially for small projects because those same transaction costs are going to be the same if you're doing $100 million project or a $5 million project. And I think that's a real barrier to getting more smaller projects across the country done. And in particular in a rising interest rate environment. A couple of weeks difference could be a whole interest rate point. And so we've seen that sort of the desire to try to close just prevent interest rates from going because then you have to usually go back and try to get more soft financing or something to close the gap and then you're sort of back on that treadmill again. But given the broad reach you know and types of projects that you see from your seat. You know what do you think are some of the things that that got to go. I would like to do more combination of historic tax credit and low income housing tax credit transactions as an investor as a tax credit syndicator. One of the barriers for us in doing that is there's a really wonky nerdy tax rule that's embedded in the historic tax credit law that makes you reduce the basis in your interest that you have in the property based on the historic credits claimed. You know how to figure out how to work structures. There's a credit pass their structure in some ways that you can adapt to that. Unfortunately when you combine historic and low income housing tax credits together that same rule applies also if you're using 9% low income housing credits. And so you're actually reducing the number of affordable units or you're reducing the value of the credits that you would get. I think that's something that the historic tax credit coalition and National Trust and others have been working to get eliminated from the tax law. A similar provision was just eliminated in the renewable energy provisions and the inflation reduction act this fall so there's a nice recent precedent for doing that. I think that would make the historic and low income housing tax credits played a bet play get played better together from a structural perspective and would bring more value to both credits. And, and I think that would be very valuable because really the federal government's giving us a credit on one hand, but taking value away on the other, the way the tax law is written. Not even achieving the overall public policy goal of doing historic renovation or doing affordable housing. So I think that's a, that's a simple nerdy fix that would actually raise pricing in historic deals across the board, and would reduce transaction costs and raise pricing on the affordable side of the simpler structure where people can combine those two credits together. The other is we see a lot of people depending on the state find that there's some barriers in the state qualified application process if they're trying to get low income housing tax credits, where there might be a bias built into the states application that favors new construction over historic, especially in places where I think there's been concern that when you're renovating a historic property, you might have more square footage in the overall building. You certainly might have more volume you have higher ceilings you have those you know gymnasiums and other things. And so your technical price per square foot might make a historic building look less favorable than a new building where you're only putting in exactly what you want. So I think some rationalizing between those programs and educating at the state level, could get rid of some of the built in bias that's keeping the credits from working in each of those at the federal and the state level. And that drives a lot of overall policy right if you can fix things at the federal or the state level you're opening up the market in a totally different way than trying to solve something on a project by project basis. Yeah, no, I think those are two sort of excellent examples and looking at sort of your your first one only saying that we got a little nerdy solution to solving that. Let's stick maybe a little bit with the nerdy theme, and we've talked a lot about low income housing tax credits. Can you talk a little bit about the role that those play in transactions and maybe for some of our audience who may not know exactly what they are sort of how they work and and help in the housing process. Yeah, for us, I would say as as we look at it, you know, like the federal historic tax credit is the federal government's biggest investment in historic preservation. Nationally, it's about a billion dollars a year that federal governments putting into it. Similarly, the low income housing tax credit is the federal government's biggest investment in affordable housing production. And so it's creating a way of ensuring that units that are developed are affordable, as you talked about earlier to people at certain income levels by subsidizing the production or maintenance of those units at different affordable housing levels. And you have a lot of flexibility in the program different from the historic credit if people are familiar with that historic you get as a right. If you're building this historic and you go through the proper state and federal channels, then you can get the credit. The low income housing tax credit, however, is different. You go through a state application process if you're trying to get the more valuable 9% so called 9% credit, and that's a 9% credit per year so it's not just 9% on 100. So it's a very, you know, it's a very valuable credit for people who are doing historic preservation work and thinking about how can I make sure my units are available to low income people. You know, you likely have to go through the state application process. Alternatively, you might be able to use the 4% credit, fewer credits available, but used together with bond financing. And that might give you a different income mix so maybe you'll get fewer purely affordable units but you'll get some other mixed income or market rate units in the mix. And I know in many communities, we see that trend towards wanting to see a mix of incomes in a neighborhood or even in a building. One of our really interesting projects we've done in the last couple of years is a really large redevelopment of the former Bell building, so like the Verizon building now in Newark, New Jersey. And the developer there was able to produce over 285 units of housing and they did it with three different condominiums within the project. They did one section of it that had retail and commercial and community facility uses. One whole section of the building is low income housing, financed units. The other part is mixed income. And so they used a combination of historic tax credits, low income housing tax credits and new markets tax credits. And sometimes people think you can't use low income housing and new markets credits on the same building. And you definitely can't use it on the same units within the building, but you can if you're separating out the financing into some different pieces. So as your projects do get bigger, sometimes adding more of those sources and separating out different uses you want in a really large building or in a, you know, in a neighborhood where you want to have multiple uses can help you get a mix of uses and a mix of income levels for kind of broader community revitalization purposes. No, that is fantastic. I think the low income housing tax credit, as you said, is an incredible tool that has really contributed a lot of capital towards these businesses. I think one sort of follow up to that and I'm looking at some of the questions from the audience, which is sort of how does the tax credit convert to capital to sort of fund the projects, right? So you have a credit and sort of what do you do now with the credit to convert that to capital towards the transaction? Well, for that all you have to do is get out your magic wand and when you wave it around, you just magically convert credits to cash, just like you go to the cash register. Unfortunately, I don't think anyone on here will believe me. I will. And I think the conference organizers could point people into some other resources that are available from some of the pre-conference workshops. So if you want a deeper, darker, exciting rabbit hole to go down on the financing structure of we call it syndication and in syndication, what we do is we raise capital from larger institutional investors. You might, well, at Gorman, you probably can, but a smaller development company might not be able to go directly to a Wall Street bank or a Fortune 200 insurance company and say, can you finance my one project? But we go to them and say we can bring you $100 million a year worth of multiple projects and we'll help you find them and underwrite them and close them and manage the compliance and recapture risk over time. And then we can find projects that you might be doing and bring capital to them and you find specialists in that across all of these different tax credits and then some organizations are multiple specialists. And I think we see a trend towards that in the market too. Can you find organizations that know how to do more than one of these credit types so you can get some efficiency with your investment partners that also reduces transaction costs and shorten your financing timeline? Because unfortunately, the credits can't convert to cash for most building owners or affordable housing developers. Most individuals can't actually claim credits because of some other nerdy tax rules and people don't want to wait until they filed their tax return to get a credit back anyway. They need money during construction. And so that's where finding an investment partner or syndication partner can make sure people have the money when they need to spend it on their contractor and architect and others. And then their investor will get the credits when the project's complete and you've met all of the different compliance requirements. So that's in the broader field that we work in that people sometimes refer to as public-private partnerships or P3s. And there's so many different examples of that. That tax credits are just one of those sources where you might have public funds available, but private intermediaries who are helping bundle that or simplify it and make sure that the money gets into communities. And I think there's probably a lot more that can be done there across our different credit areas. So I have one last question for you and then I think we can take some more audience questions. I'll skip the losing because that's a downer. Where are we missing the yes? What are things we should be saying yes to so we can do more affordable housing and historic preservation work? You know, I think one, and I get back to sort of local municipalities and governing bodies. I think they need to be say yes to more innovative approaches to these. I think oftentimes local officials get frustrated and it's easy to demo. That's sort of, you know, we can clear it out and they believe the vacant lands more valuable than having the structure on there and it makes it easier. In some cases there's tax purposes to demolish a building because the taxes are less on vacant land than it is with the structure. But I think, you know, the missing yes is to believe and really preserve some of these buildings to be converted that we don't have to. The solution shouldn't be just to tear everything down, which I'm seeing in a lot of places where, you know, we seem we're six months too late, you know, and in that sort of case and there have been some, I think, really good examples. There's a Stoney Island Arts Bank building in Chicago that for 20 years sat vacant and was on the demo list to be demolished. And the Astor Gates, who's an urbanist and artist, finally got the rights to buy the building bought it for $1 and has since been a location now that is serving the community in this sort of broad sense. He's not a developer. He's not necessarily a historic preservationist, but he had an idea, right now from a nontraditional point of view. And oftentimes I think the lessons that we've learned are sometimes limiting on what we believe the potential of something could be. This wasn't converted to housing or anything like this is basically a community center that is now self funded, but is providing a number of opportunities and it was weeks away from being demolished before he was able to sort of step in. And it took someone to say yes, let's give it a try, you know, and kind of believe that something could be done in preserving that building now is a great institution for that community what looks like for you know for years to come. So I think saying yes to, you know, believing in maybe nontraditional approaches to getting stuff done. What do you see as the missing yes. So I think what we see right now is again we I do a lot of federal policy related work and I think now government agencies are big and people have a lot on their plate within their own agency. Sometimes they don't see across the street. The folks you're working at HUD don't know what's going on at Interior and vice versa all the time. And so where that connective tissue is missing, then I think people are missing the opportunity to have some of these programs play better together, like we talked about earlier. I also think in the historic preservation community. You know this is something Renee and Cindy's research and others in the preservation field are elucidating to you know sometimes there's a sense that you want a perfect outcome. I grew up in a historic district in a small town in some central Appalachia, and people would joke about the hysterical society instead of the historical society right that people would get hysterical about, you know things that were very precious about character defining features of the property. And I think most people in the field really want the property and the cultural heritage to be preserved. And if there's some ways of saying yes, and saying yes faster to ways that you can think more creatively about, especially some design issues that make things more compatible for affordable units I know you've you and I talked before about people don't live the same way they live 50 years ago. They need different unit sizes, they might need air condition, right when these buildings weren't built they didn't have that, or, or other, you know, resources within the property. And we might be converting a lot of properties in this electrification trend. And so how are we going to do that and have historic preservation and affordable and also be compatible with many organization schools for climate friendly adaptive reuse and, and mitigating some of that. So I think not letting the perfect be the enemy of the good. That's right. We talked to Congress about that a lot. But it's, it's true in our field to how do we, how do we get to yes and not feel uncomfortable with that. These are interpretive guidelines that work within in the historic preservation world. They're not clear lines. I used to work with a government regulator who said, I'm not going to give you a bright line if I do then you'll jump up and down right up on it. But I don't think that's really the way developers and investors and preservationists work. That's not been my experience in the field. So a little bit of clarity might actually be helpful. And otherwise, some flexible interpretation to say it's better to have this historic building and have it be a resource and an asset in the community. Even if we can't get exactly all of the historic features that we wanted something really is better than a parking lot. And so how can we work together to make that true. Yeah, I think that's right. And the inconsistency state by state, depending on who is interpreting the rules is a tough one where we've been able to extend buildings within the historic guidelines and add more space in that in certain areas. And then we get another reviewer who says that's not possible. Right. And so that sort of makes it hard for us to sort of plan and design. The other thing I'll say quickly and as you said indicate we can open up to questions, which is in some cases, particularly with governments and other regulatory bodies, I'd rather have a fast no than a super long yes. And it sounds kind of odd and I'm not saying that the bill needs to be destroyed or something. But just tell me whether or not we can do something and how we can work. And sometimes they're so afraid to say no, that you're working on some of these projects three, four or five years, and then they tell you, then you get a final no at that point and it's you know somehow being open and honest about what's possible. And not taking it personal I think would be great. That's great well I think we have one last minute and with that I wanted to pull one of the audience questions. That's asking, similar to your example of someone in Chicago who had a vision for creative adaptive reuse. If I think of the types of organizations that own a lot of historic properties, a couple come to mind public housing authorities now own a lot of affordable unit, I mean a lot of historic resources. Interestingly, so does the federal government through the military through GSA and others, but also a lot of religious congregations own a lot of historic properties. Can you give folks some ideas for either what you've seen or what you can imagine for how those congregations could help support the creation of affordable housing which I know in many communities is something that those organizations want to be able to support, and there are adjacent units or other places in their community. Yeah, and so that this is interesting, because in many of our communities across the country. The church is a large landholder and often has historic structures, but maybe land rich and capital poor, right and that's sort of the challenge that they have and trying to visualize some of their things. There's an organization called Crossing Capital, and the gentleman who heads that up is Dr. Reverend Williams, Sidney Williams. He's a Reverend with an MBA from Wharton and has structured a fund that's looking to help churches sort of realize their mission vision around converting their high value land into affordable housing. He's helping them sort of understand how to partner with developers and ensure that they get the stuff that they need done. He also has a CDFI so he's funding some of the pre development work and some things like that. And I haven't seen direct approach, you know, like he's sort of taking to really help these sorts of churches and institutions, but it is something I think that's on the radar of a lot of organizations. The University of Notre Dame and their real estate program has church real estate as like a topic you can take. And so we're seeing like how do we sort of look at this land, particularly as we see in places across the country, a lot of redevelopment around the churches. And so that pressure is coming in to either do something or sell. And so Sidney and Crossing Capital is an organization that's trying to help them sort of best realize how they can take advantage of the situation they're in to provide and further their mission. That's great. Not everybody knows I was actually a religion majors and undergrad that's how I got into the community development world. And so I'm gonna look him up. I'm personally interested in that. It also makes me think wearing my policy hat one last time. This is another area where being able to finance historic redevelopment where tax exempt entities are involved, which includes just a regular 501c3 nonprofit organization, but also could be a religious organization that the tax exempt rules work in a way that's really clunky. And it can be hard if you own a property and you're a nonprofit to redevelop it and continue to use it, even if you change the use. So, you know, if you had a fellowship hall building and you don't need it for your congregation and you wanted to convert that to housing, but you're still going to use that and you'd previously been using it, the tax rules would make it really difficult. And that's another tax change that people are trying to get through the Historic Tax Credit Growth and Opportunity Act. Another way you could make change at scale to help people at least lower the barriers to finding financing tools for that kind of adaptive reuse. Excellent. Well, I think we could go on all afternoon, but I think our hosts are going to give us the hook and move our audience on to the next thing. This has been a great conversation. I wish we could keep going. And I hope that people in the audience will reach out to either Will or myself if you have any other follow up questions. It's been a delight to have this conversation with you today. Thank you so much, Will. Oh, thank you so much. And I see just one quick question. It's Reverend Sidney Williams of Crossing Capital. You can find him on LinkedIn or reach out to us after the event and I can make the connection. Thank you. This has been fantastic and wonderful and a very important topic and glad to share this time with you. Thank you so much.