1. Cincinnati Metropolitan Housing Authority CMHA Cincinnati, Ohio September 17, 2008 QUADEL CONSULTING CORPORATION THE RENT REASONABLENESS ESTIMATOR

2. Background –Novogradac & Company LLP (Novogradac), founded in 1989, is a nationally certified public accounting firm that specializes in housing and community and economic development with an emphasis on affordable housing. NOVOGRADAC & COMPANY LLP

3. Background –Novogradac was once again designated a Best of the Best firm by INSIDE Public Accounting (formerly Bowmans Accounting Report). The report analyzed 327 firms, and only the top 25 achieve the Best of the Best status, which signifies exceptional corporate management and firm operations. This is the fourth consecutive year that Novogradac has been recognized by IPA. NOVOGRADAC & COMPANY LLP

4. Background –Novogradac has expertise in: Economic & market research, including infrastructure investments, satisfaction surveys, and specialty studies. Investment analysis and due diligence support, including portfolio analysis, loan work-outs, bankruptcy support, mergers and acquisitions, and model development. NOVOGRADAC & COMPANY LLP

5. Background –Novogradac has expertise in: Valuation and market research, including complex property types, mixed use properties and alternative use scenarios. Financial advising, including developing leveraged financial structures, providing financial analysis, possible alternatives, and an opinion for the financial viability of proposed projects, etc. NOVOGRADAC & COMPANY LLP

6. Background –Novogradac has expertise in: Federal government consulting including military housing privatization, Enhanced Use Leasing, HUD and OSD policies and procedures, lodging facilities, etc. Housing and development support for affordable to luxury housing for rent and for sale. NOVOGRADAC & COMPANY LLP

7. Background –During the past ten years, Novogradac has consulted on over 4,000 projects nationally. The Market Research Group does approximately 700 market studies per year and since 2003, over 2,000 market studies have been completed nationwide. –We have prepared HUD Consolidated Plans and portions of Comprehensive Plans –Novogradac completes market wide assessments on a periodic basis on markets throughout the U.S. NOVOGRADAC & COMPANY LLP

8. The Rent Reasonableness Toolkit meets HUD's requirements for contract rent determinations and provides clear documentation for tenant files. The Toolkit ensures that a fair rent is paid for units selected for participation in the voucher program. THE RENT REASONABLENESS TOOLKIT QUADEL CONSULTING CORPORATION

9. What is Rent Reasonableness? HUD requires that local housing authority payments for voucher- occupied units be in line with market rents. Rent reasonableness ensures that the rent that CMHA will pay for a unit occupied by a voucher holder is supported by market rents for similar unit types in similar neighborhoods. Establishing market-based payments for units occupied by voucher holders ensures that the rental market remains in balance. THE RENT REASONABLENESS TOOLKIT

10. The CMHA Rent Reasonableness System: QUADEL CONSULTING CORPORATION Uses representative local rental market data; Equitably compares one unit to another; Accommodates the differences in areas and neighborhoods; Has an objective system to explain to owners how the approved rent was determined; Ensures that the process is not arbitrary; Ensures that CMHA is getting fair value

11. RENT REASONABLENESS METHODOLOGY OVERVIEW The rent reasonableness model combines two well-established analytical tools used in the real estate profession: 1.Direct comparability of units. 2.Statistical regression analysis. This combination creates reliable determinations of rent based upon actual comparable data from the rental market. QUADEL CONSULTING CORPORATION

12. RENT REASONABLENESS METHODOLOGY OVERVIEW Unlike rent reasonableness systems that use only three or four comparable units, the Toolkit uses data from the entire rental market to determine a units rent. The statistical model adjusts each rent according to statistically significant market variables. The rent for a given unit is the SAME no matter what comparable properties are used. QUADEL CONSULTING CORPORATION

13. RENT REASONABLENESS MODEL The implementation of the Rental Valuation Toolkit consists of the following broad steps: QUADEL CONSULTING CORPORATION

14. DATA COLLECTION Newspaper/Classified Research –Cincinnati Enquirer, CityBeat Internet Research –www.rent.com, www.apartmentguide.com, www.craigslist.org Neighborhood Survey –Physical driving survey of Cincinnati and Hamilton County neighborhoods Community Partner interviews Data collected in 53 Cincinnati neighborhoods, 62 County villages and municipalities, and 12 Townships

15. UNIT FEATURES – Data Collected Building Type Unit/Street Condition Asking Rent Number of Bedrooms Number of Baths Square Footage Utility Structure Concession Patio/yard Central air conditioning Refrigerator Oven/range Dishwasher Garbage disposal Washer/dryer Washer/dryer hookup Built-in microwave Swimming pool Garage and/or covered parking Off-street parking Blinds Carpeting/hardwoods Exterior storage Central/shared laundry Landlord-paid alarm

16. DEMOGRAPHIC INDICATORS There are locational features that affect market rents and do not relate to the physical characteristics of a property. We considered the following demographic indicators in our analysis: Median income Median home value Renter prevalence Change in home value Prevalence of vacant housing units Crime prevalence (personal and property)

17. REGRESSION ANALYSIS The regression analysis analyzes all characteristics collected for each data point and determines which are statistically significant. –Significant features include the number of bedrooms, building type, median income, median home value, property/street condition, and several amenities. –Outliers are eliminated –Values are assigned to each feature to determine appropriate adjustments.

18. RENT REASONABLENESS CONCLUSION Questions? QUADEL CONSULTING CORPORATION