After decades as an affordable housing leader, Boston-based Boston Capital is still growing its business. As of January, the firm held a portfolio of federal low-income housing tax credits (LIHTCs) from 115,478 units of affordable housing—enough to make it the second largest syndicator on the NMHC's 10 Largest Apartment Syndicators list for 2019. That’s up from last year, when Boston Capital ranked No. 3.

The list is fairly consistent—nine of the top syndicators in 2019 also made the top 10 in 2018. (The new entrant is Alliant Capital at No. 8.)

“We have been No. 2, 3, or 4 on the list for the last decade or so,” says Jeffrey Goldstein, chief operating officer and director of real estate for Boston Capital. He recently shared his take on the business with Multifamily Executive.

MFE: Why has Boston Capital stayed a top syndicator?

Goldstein: We’ve added a significant number of investors. Smaller banks are getting into the program. We are also looking at investors who have taken a break because the yields have gotten so low. We made also a great effort to raise a California-only fund.

MFE: What are the opportunities or challenges this year?

Goldstein: One of the things that we all think about is the possibility for more tax credits in the markets based upon revisions in the tax credit program. We could get more 9% credits and there is the potential for a 4% fix.

MFE: Would you call that a challenge or an opportunity?

Goldstein: I think it’s both. More credit into this marketplace might cause yields to go up a little bit and prices to soften a little bit.

The challenge for us continues to be competition—because investors have certain requirements with respect to yield. At the property levels costs are continuing to rise … labor costs, land costs. Syndicators are in the middle: Are we able to generate enough proceeds to make these deals work?

There is still a lot of fight for available tax credits. In addition to regional banks and other folks that are entering the market, Fannie and Freddie have come back into this marketplace. Economic buyers are still in this marketplace, generally insurance companies.

MFE: What other trends are affecting the deals that you do?

Goldstein: One of the hottest topics for us right now is income averaging. Like anything new you have to be really careful. Some investors are a little leery. They see this as a potential risk that they are not being rewarded for. If you screw up on your income averaging, that is one more pitfall in a complicated program, but the investors are still getting the same yield.

MFE: Are Opportunity Zones making a difference?

Goldstein: There has been a little more clarification as to how the rules work on Opportunity Zones, but I will be honest with you, I still have not figured out how to make an Opportunity Zone deal work with tax credits.