6 developments get city council support to apply for low-income housing tax credits
AUSTIN (KXAN) — Six affordable housing developments recently received resolutions of support from the Austin City Council to apply for low-income housing tax credits (LIHTC) from the State of Texas, according to the City of Austin Housing Department.
Developers must secure those resolutions before they can formally submit an application to the Texas Department of Housing and Community Affairs (TDHCA), which is the state agency that administers the program.
According to the city, the developments will apply for 9% low-income housing tax credits. The application process is competitive, and each developer applying for the tax credits must meet a series of criteria that are set by both the city and the state.
The TDHCA allows housing developers to take a dollar-for-dollar federal tax credit to offset up to either 4% or 9% of their federal tax liability in exchange for building low-income rental housing projects, according to a city press release. These credits typically subsidize 70% of the unit costs and support new construction without any additional federal subsidies.
Proposed residential developments are awarded tax credits based on the TDHCA score received within their region. Texas is divided into 11 TDHCA regions; Austin is in Region 7, which includes Travis County and the surrounding counties.
Mandy DeMayo, Interim Director for the Housing Department, explained in a press release that the resolutions of support push the proposed communities one step closer in their competitive bids for the 9% tax credits.
She added that historically, Region 7 has only received two direct awards per year, but the city is hopeful to see a potential third award this year.
“Tax credit developments help ease the shortage of affordable rental housing, attract private investment in affordable housing, and create jobs with an economic multiplier effect that lasts beyond the end of construction,” DeMayo said in the release.
According to the release, the competitive process typically begins in January and awards are made by the TDHCA in July. The projects are generally completed within 2 years. To be eligible for the 9% low-income housing tax credits, developers are required to obtain a supportive resolution from the City Council as part of their application. City Council resolutions are submitted to the TDHCA with each development’s tax credit application.
Projects that receive the award must meet eligibility for at least 30 years after project completion, and awarded projects typically elect to provide 45 years of affordability, keeping rental units rent-restricted and available to low-income tenants, according to the city. After that period ends, the properties remain under the control of the owner.
Resolutions of support
Eleven LIHTC Developers submitted requests for resolutions of support to the Austin City Council in December. Of those, five withdrew their applications, and the remaining six received the resolutions.
The developments that received resolutions of support are as follows, according to the city:
Pathways at Santa Rita Courts West
Pathways at Santa Rita Courts West is located in District 3 at or near 2210 E. 2nd St. The proposed development is in a displacement risk area and is a rehabilitation of an existing affordable housing community. An affiliate of the Austin Affordable Housing Corporation will be the sole member of the general partner and the landowner, thereby allowing for a full property tax exemption. The rehab calls for the creation of 96 affordable units.
10 units will be affordable at or below 30% Median Family Income (MFI);
39 units will be affordable at or below 50% MFI; and
47 units will be affordable at or below 60% MFI.
Waverly North
Waverly North is located in District 9 at or near 3710 Cedar St. If awarded, tax credits will be used to offset costs for the rehabilitation of an existing community. The community is in a high-opportunity area and within half a mile walking distance of high-frequency transit. Plans call for the development of 76 affordable units.
17 units will be affordable at or below 30% Median Family Income (MFI);
20 units will be affordable at or below 50% MFI;
27 units will be affordable at or below 60% MFI; and
12 units will be affordable at or below 80% MFI.
Crossroads Redevelopment
Crossroads Redevelopment is located in District 7 at or near 8801 McCann Dr. If awarded, tax credits will be used to finance (or offset construction costs) the rehabilitation of an existing affordable housing community that will result in the creation of 130 supportive housing units. The community will be located within a half mile of high-frequency transit.
26 units will be affordable at or below 30% MFI;
94 will be affordable at or below 50% MFI; and
10 will be affordable at or below 60% MFI.
Eberhart Place
Eberhart Place (At-Risk Set-Aside) is located in District 2 at or near 808 Eberhart Ln. The proposed development is in a displacement risk area and is a rehabilitation of an existing affordable housing community. If awarded, tax credits would be used to offset costs and rehabilitate 38 units for senior living.
8 units will be affordable at 30% Median Family Income (MFI);
16 units will be affordable at 50% MFI; and
14 units will be affordable at or below 60% MFI.
St. George’s
St. George’s Court (At-Risk Set-Aside) is located in District 4 at or near 1443 Coronado Hills. If awarded, tax credits will be used for the rehabilitation of an existing affordable housing community which would rehabilitate 60 units for senior living. The community is in a displacement risk area.
7 units will be affordable at or below 30% Median Family Income (MFI);
24 units will be affordable at or below 50% MFI; and
29 units will be affordable at or below 60% MFI.
Highland Commons
Highland Commons is located in District 4, at or near 618 E. Highland Mall Blvd. The proposed development is in a high-opportunity area and within half a mile of high-frequency transit. Plans are to create 96 affordable units.
10 units will be affordable at or below 30% Median Family Income (MFI);
39 units will be affordable at or below 50% MFI; and
47 units will be affordable at or below 60% MFI.
