Longtime low-income housing tax credit (LIHTC) syndicator WNC underwent a series of leadership moves in 2023. As part of that, Anand Kannan, who had served as president of WNC subsidiary Community Preservation Partners, was named president of the syndication and investment firm, with Will Cooper Jr. remaining as chairman and CEO. WNC ranked No. 9 on the National Multifamily Housing Council's 2024 Top Syndicators list.
Kannan shares how he’s making WNC a stronger company as well as his insights on today’s LIHTC market.
What are WNC’s priorities for 2024?
Being in the syndication business for over 50 years, WNC is committed to maintaining and enhancing its relationships with both investors and developers. In 2024, our priorities are twofold. First is to continue to provide the certainty of execution and quality product that our developers and investors expect. In tumultuous or uncertain economic times, and especially in an election year, it is important to provide that stability and certainty to our partners to ensure that quality, safe, decent affordable housing continues to be built and preserved. Our second priority is to establish and increase our proprietary business with our current proprietary investors and potential new relationships. Being flexible without having to be hamstrung by an in-house debt platform, we can leverage debt opportunities to attract potential proprietary investors to partner with us.
What moves are you taking to make WNC a stronger company?
We are making significant investments in our people, our processes, and resources to make ourselves a stronger company. With our people, we are creating a culture of collaboration and ownership, where each individual, no matter their role, feels a sense of synergy and purpose as to why they do what they do. With processes, doing things the way they have always been done might not always lead to the optimal outcome, so we are constantly evolving and learning from our clients and peers as to how we can be more organized, efficient, and improve all aspects of our process.
What are your expectations for the LIHTC equity market for the year?
Given that it is an election year, there is always a level of uncertainty in the equity market, but we feel very strongly that the investor community believes and continues to make affordable housing investment a priority. With rising interest rates and current inflation trends, it seems difficult to expect pricing to increase, so we would assume investor yields rising slightly from current levels. In addition, the potential passing of elements of the Affordable Housing Credit Improvement Act and reduction of the 50% [bond] test to 30% could be a big boon for developers, but it could also lead to a huge supply of credits at one time without the investor demand to match it. Investors don’t seem to be losing appetite for LIHTCs, but we could see them getting more selective as the number of available tax credits and properties increases.
What trends are you currently watching?
Rising insurance costs is an issue that continues to be something that we are tracking and monitoring. Looking at potential creative solutions, whether it be self-insuring, captives, or other products, it seems as if there is a lot of room for innovation and disruption in the property insurance industry. In addition, we are continuing to track the Department of Housing and Urban Development’s continued support of preservation, given the new Mark-to-Market legislation that could potentially rehab a significant number of properties nationwide. Further, we are tracking the availability of volume cap in various states that have been impacted over the last few years. Given rising construction costs and rising interest rates, more and more deals are not as feasible, which might make volume cap readily available for preservation deals.
What makes you most optimistic about the industry?
A few years ago, housing and homelessness were not an issue that was discussed on a regular basis outside of the affordable housing circles. Recently, however, housing has been a hot topic in any discussion about the economy, and more and more people are realizing that affordable housing is not a local issue, it’s a nationwide issue. I am optimistic that those discussions are coming to the forefront, which allows for more investment into affordable housing priorities. At the end of day, every person has a right to a safe, decent, affordable place to live, and I am excited that statement is no longer controversial.
