By Aurora Kohn
The high cost of new construction necessitates more innovative ways of meeting housing demand and the National Association of Realtors, or NAR, is seeking to assist Guam in this area.
Kristian Hoysradt, NAR manager for federal programs and advocacy, said the association is working with U.S. lawmakers to look for opportunities to create affordable residential units.
Among the initiatives is to convert unused commercial and office buildings and even hotels into residential units by providing incentives to owners of these buildings, such as tax credits.
“One of the trends right now is the adaptive reuse of existing commercial structures into housing. So oftentimes, it takes policy changes to provide tax incentives to building owners,” Hoysradt said.
“To build a brand-new structure is pretty difficult right now, so we can adaptively reuse a former K-Mart or an office building to turn that into housing units,” he added.
In December last year, Guam Housing and Urban Renewal Authority announced that Core Tech Development had been awarded $36.6 million in tax credits over 10 years to build 64 new affordable housing units in Radio Barrigada under the low-income housing tax credit or LIHTC program.
Created in 1986, the LIHTC program is an indirect federal subsidy used to finance the construction and rehabilitation of low-income affordable rental housing. In exchange for a tax credit, owners are required to keep the units rent-restricted and available to low-income tenants.
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The Guam Association of Realtors on Tuesday night hosted a meet-and-greet event at the Hyatt Regency Hotel to welcome visiting representatives from NAR.
Ziggy Zicarelli, NAR regional vice president for Region 13, said another important aspect of the association’s efforts to facilitate the success of real estate transactions is working with the government and pushing for the revision of rules and regulations to mitigate some of the costs and restrictions of buying or building certain homes.
On Guam, regulations require the assessments of project sites located on "historic properties." This requirement entails an additional expense that can make a home out of reach for a lot of individuals.
NAR works with elected officials and regulatory agencies “to try and reduce those barriers.”
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The Guam Association of Realtors is also working to get more residents to buy their first homes.
Elizabeth Duenas, GAR president, said there are several existing programs that eligible first-time home buyers can avail of.
Financial assistance of up to $10,000 for closing costs is available for qualified first-time home buyers.
There is also a program in place that enables eligible home buyers to borrow money for the down payment on their first typhoon-resistant home via a second mortgage loan on their home from the Community Affordable Housing Action Trust or CAHAT. The interest-free loan has a 30-year term.
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The Covid-19 pandemic has posed additional challenges to the real estate industry.
“I think there is a natural tendency to run away from disruption,” said John Sebree, chief executive officer for NAR Region 13. “And I always tell everyone (to) run toward it, embrace it. It makes us stronger.”
He noted that the young generation has new ideas about searching for new houses.
“And our companies, their MLS, you know, if they’re not embracing that, they’re not moving with the times,” Sebree said.
As part of its response to the evolving needs of real estate customers, NAR is investing in ways to make listings more accessible to customers, ensuring that information is up-to-date and complete. The association is also investing in online tools to make the process more efficient and easier to use.
“We are constantly looking for these things that can help real estate transactions move smoothly,” he added.
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