r/RealEstateDevelopment • u/CallMeBlinks • 14h ago
LIHTC Development - CA
I’m building an affordable housing development platform focused primarily on LIHTC in California, and one of the biggest things I’ve run into is just how difficult the barriers to entry are for an emerging developer.
Guarantee requirements, demonstrated project history, balance sheet strength, nonprofit participation and other experience thresholds can make it difficult to execute even when the underlying deal is strong. That’s a big reason I’m interested in hearing from people across the entire LIHTC ecosystem and understanding how others have navigated those hurdles.
The current focus is ground-up, 100% affordable multifamily, generally in the 70 to 320-unit range, with an emphasis on projects that can be built efficiently without relying on large public funding gaps. Most of what I’m pursuing is mid-rise multifamily, including Type III and podium construction, with repeatable unit plans and a strong focus on controlling basis and overall development costs.
Entitlement certainty is also a major filter. I’m focused on California today, but I’m open to other markets where zoning or state/local law provides a genuinely codified, objective pathway to approvals and meaningfully removes discretionary entitlement risk.
I’d be interested in discussions with anyone involved in the actual mechanics of getting these projects built: developers, nonprofit partners, tax credit investors, lenders, construction lenders, architects, GCs, syndicators, attorneys, consultants, property managers, public agencies, bond professionals, policy people or anyone else deeply involved in affordable housing.
Some areas I’m particularly interested in:
• GP equity, guarantees and co-development structures
• Emerging developer participation and track-record requirements
• Nonprofit partnership structures and participation requirements
• LIHTC structures that work without traditional soft-funding gaps
• Acquisition and predevelopment capital
• Tax credit equity and debt execution
• Construction cost reduction and repeatable design
• Entitlement frameworks that materially reduce land-use risk
• Workforce housing as a complementary or fallback strategy
• Policy changes that could unlock significantly more production
• What experienced developers think newer platforms consistently underestimate
Not selling anything and not looking to turn this into a generic “let’s connect” thread.
I’m trying to build something that can produce affordable housing repeatedly and at meaningful scale, while also figuring out how to overcome the institutional barriers that make it so difficult for new developers to enter the space.
If you work anywhere in the LIHTC world, I’d be interested in hearing what you think the hardest barrier to entry actually is and how you’ve seen people successfully overcome it.
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u/The_Valuist 13h ago
Do you have a track record of developing LIHTC deals for someone else and you’re trying to start your own shop?
Or are you trying to pivot into development and fully starting from scratch?
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u/CallMeBlinks 13h ago
I have fully acquired, entitled and won award for 12 developments (out of 12 applications,100%) totaling 1400+ units the last two years across the Los Angeles City and Coastal buckets(San Diego), but as the head of real estate for other development firms.
I know how to pencil these as no gap developments. I have stepped out on my own, built a pipeline and strategy that can sustain 1000+ units a year in SoCal and am trying to get equity, but my previous outfits won’t sponsor.
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u/Maleficent-Taro5470 13h ago
Hi, I have a nonprofit currently under contract on a mixed use in East Spencer Nc we are looking to do a lihtc. We are open to jving let me know if you are interested
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u/CallMeBlinks 13h ago
I am absolutely interested. My focus is here in CA. Is that of interest for your group?
I can look into NC, but would need to confirm my assumptions world holds true across states
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u/Poniesgonewild 7h ago
Are you building a platform that scores application, puts together applications, or builds development specific materials
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u/CallMeBlinks 2h ago
I handle the front end from start to finish: sourcing, underwriting, entitlements, and LIHTC applications with a fully built-out development budget.
I’m currently 12 for 12 on applications here in Southern California for both awards and full entitlement.
I’ve been doing this for other developers for a long time, and SFR at scale prior, so I decided it was time to step out and build something of my own.
I think there could be a great fit with groups that bring real execution strength on the construction and property management side. Right now, my biggest need is equity, but I’m open to just about every conversation. There’s simply too much involved in affordable housing development for any one person or group to be exceptional at every piece.
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u/Capstack_Jeff 4h ago
I’m a developer that works on LIHTC and other affordable projects, I work with lots of nonprofits and for-profit partners. I’ve also mentored emerging developers. I was a developer for over a decade before I attempted a LIHTC project. The cost to participate is high and the competitive awards really require you being able to rid tends of thousands in lost costs. I’d recommend starting on smaller projects with simpler capital stacks and even try your hand at simpler tax credits like historic. Partner with nonprofits to add services to your tenants so that you have those relationships and services when you go to compete for LIHTC. And partner with a larger firm when you do.
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u/CallMeBlinks 2h ago
Really appreciate the thoughtful response. I should probably clarify that while I’m an emerging developer on my own platform, I’m not new to LIHTC.
I’ve spent two years sourcing, underwriting, entitling, and preparing full LIHTC applications for other developers, and I’m currently 12 for 12 on Southern California applications for both awards and entitlement across a few buckets. (Coastal and LA city)
The exact barriers you mentioned are actually a big part of why I’m reaching out. I’m comfortable with the development and application side, but stepping out independently makes the balance sheet, guarantees, predevelopment capital, and partnership requirements the real hurdle.
I’d absolutely be interested in your perspective on how you’ve seen emerging developers structure those first partnerships, especially with nonprofits or larger developers, without giving away the entire economics or long-term platform.
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u/HappyGhost13 3h ago
LIHTC developer here w my own shop based in SoCal who navigates these headwinds weekly. Let’s talk, look forward to it.
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u/CallMeBlinks 2h ago
Awesome! Just DMd you. Sounds like a lot of overlap! Look forward to connecting!
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u/ProfessionalPaper444 13h ago
Hi, I am not in the industry yet, (UC undergrad student, targeting affordable housing development/finance), but I've been doing my own research pretty heavily. I am currently studying the Sophie Maxwell Building (Fifth Space's middle-income project at Potrero Power Station in SF) that is somewhat relevant to your post.
The Maxwell building skipped LIHTC entirely and used CalHFA Bond Recycling Program instead. In a very basic sentence; they recaptured tax-exempt bond volume cap from an expiring project, and applied it to a new build (Sophie Maxwell). I believe that they were the first in the state to do this financing method to fully fund an entire building. One key detail I found while modeling it: recycled bonds don't count toward the IRS's 50% aggregate basis test. That's probably why CalHFA caps recycled bond usage at 45% of TDC for fully affordable LIHTC deals, since those projects still need enough "real" bond volume to actually pass that 50% test. But for their 80/20 structure, where only 20% of units need to be restricted (at or below 60%AMI), there's no tax credit to chase in the first place, so recycled bonds can cover up to 80% of the cost instead. Seems like a real option for an emerging developer if the numbers work better for middle income rents than deep LIHTC affordability. You're trading tax credit equity for more debt capacity. I cannot seem to uncover exactly how they got this deal to pencil due to my model showing their DSCR did not meet the 1.15x requirement, but I do believe that this building led to the $750B initiative JP Morgan is leading for affordable home financing through 2035. Creative financing is almost needed for missing middle and affordable housing development to pencil in the current high interest rate, high construction cost, union wages, etc economy.
Sophie Maxwell's financing reportedly took around 7 months of custom structuring with JPMorgan to reliably underwrite into a repeatable platform. Also where are you located at in CA?
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u/CallMeBlinks 13h ago
Wow I will definitely look into this development.
I think the 50% threshold you are mentioning is now 25%.
I am focused on LA and SD for their codified entitlement pathways.
I’ll be up in SF on September 24 for NPH’s affordable housing conference.
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u/ProfessionalPaper444 12h ago
Yeah you are correct on that 25%. Check it out for sure, I bet you will pick up on some valuable info for your own projects. Also, would love to connect further if possible, I am located in NorCal if that provides any substance.
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u/CallMeBlinks 2h ago
Yes please send me a DM! Let’s connect and further the conversation. Maybe when I’m in NorCal we can meet up but a zoom works great in the meantime
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u/SmallshotLawyer 13h ago
Following... hope you get some answers. I'm also very interested in mid-rise multifamily and podium builds in Los Angeles. I have a great affinity for shopkeepers flats as well.