Business intelligence (BI) continues to pay off in affordable housing. At a time when the industry is coping with rent recovery and other issues brought on by the pandemic, BI is helping operators stay on top of mandatory recertifications.
Earlier this year, RealPage offered introductory trials of its affordable BI platform to operators, and the response was overwhelming. Many clients dispelled the myth that BI is a luxury rather than a critical business asset, and brought it on board.
The widespread adoption of BI signifies that the subsidized housing industry is ready to automate many of the arduous compliance processes, says Darlene Liu, Director of BI Product Management at RealPage.
Easier navigation of state and federal regulations is one reason, especially this year as operators have been distracted by the need to closely monitor delinquency and collections during the pandemic. Another is getting a quick take on potential risks associated with being out of compliance.
Reducing tax credit and HUD non-compliance
Letting the annual process of recertifying residents slide at tax credit and HUD properties is risky. The tax credit penalty or loss of subsidy can be steep if an audit finds a property not keeping up with the rules.
“If you’re audited and they find you have been charging more or you’re out of compliance, you can lose your tax credits or subsidy payments will be withheld,” Liu says. “It’s especially painful for tax credit properties. If they are found out of compliance the IRS can recapture their tax credit allocation.”
It can be equally troublesome for HUD properties that don’t qualify residents for an apartment each year as mandated. The agency often won’t pay its portion of the rent until paperwork is submitted.
And since all recertifications – whether for tax credit or HUD properties – don’t happen at once, it can be cumbersome to keep up with due dates.
Getting in front of potential recertification issues
Two years ago, RealPage made it easier for affordable operators to see their recertification status at the portfolio level. Once viewable only by property, the report card shows operators’ aggregated totals for the portfolio as well as status at the community level. For example, an owner or executive can see at a glance how many annual recertifications are due at each property. Recertifications by resident are also identified.
The BI platform ultimately helps reduce overall compliance risk and avoid a potential negative outcome during a state or federal audit, Liu says.
What once took hours to compile is now available in a matter of minutes.
“Properties that don’t have access to BI put a lot of hours into producing these reports,” Liu explains. “This allows regional managers and compliance managers who are working at the home office to get in front of any potential issues related to sending reminder notices and processing annual recertifications in a timely manner.”
RealPage Industry Principal Andrew Bowen says enlisting BI eases navigation of complex compliance matters so operators can live up to their obligations with the government.
Mitigating the risk of potential fines and lost subsidies is more than worth the investment, he says.
“In the Affordable world, the last thing you want to do is fall out of compliance,” he advises. “If you fall out of compliance with recertifications, you are in a world of hurt if they find out about it.
“It pays to stay ahead of the game in affordable housing leasing.”