The purpose of this policy is to provide criteria for affordable housing developers requesting a resolution of 'no objection' from the City Council to submit with their applications to the Texas Department of Housing and Community Affairs (TDHCA) for Non-Competitive (4%) Housing Tax Credits (HTCs) (4% tax credits) . The 4% tax credits are awarded to eligible participants and provide a source of equity financing for the development of affordable housing. Investors in qualified affordable multifamily residential developments can use the 4% tax credits as a dollar-for-dollar reduction of federal income tax liability. The value associated with the tax credits allows housing to be leased to qualified families at below market rate rents. The Non-Competitive (4%) Housing Tax Credit program is coupled with the Multifamily Bond Program so the bonds finance at least half of the cost of the project. Unlike the Competitive (9%) Housing Tax Credit program, TDHCA's approval of the application for 4% tax credits is tied to a checklist. There is no scoring of the applications and approvals are granted year-round based on available funding. A public hearing is required in order for the developer to obtain a "Resolution of No Objection". There is no local match requirement in terms of funding. Staff requests that the City Council consider the following policy for requests for Resolutions of No Objection for applications for the four percent tax credits: In order to obtain a Resolution of No Objection from the City Council, a development must have one the following: - Ten percent of the total units dedicated for the Rental Assistance Demonstration project (RAD); or
- Five percent (5%) of the total units set aside as Permanent Supportive Housing (PSH) units, and
- A minimum of 5% of the units set aside as market rate units. This policy should be re-evaluated at least on an annual basis to assess market conditions and to acknowledge other possible priorities and needs.
This policy affects ALL COUNCIL DISTRICTS. This M&C does not request approval of a contract with a business entity. |
