Presenter/Contact
Presenter
Jeff Jewell, Director of Economic and Community Development
Contact Info
(830) 221-4621 - jjewell@nbtexas.org
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SUBJECT:
Title
Discuss and consider approval of a resolution of the City Council of the City of New Braunfels, Texas providing no objection to the submission of an application for Low Income Housing Tax Credits to the Texas Department of Housing and Community Affairs for the proposed Oak Creek Multifamily Housing Project located at the southwest corner of Oak Creek Way and South IH-35 Frontage Road; approving findings related to the Application; imposing conditions for such non-objection and declaring an effective date.
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BACKGROUND / RATIONALE:
The Low-Income Housing Tax Credit (LIHTC) is the nation’s largest source of equity financing for the development and construction of affordable housing. The program is funded by the US Treasury Department and overseen by the Internal Revenue Service. Tax credits are awarded to eligible participants to offset a portion of their federal tax liability in exchange for the production or preservation of affordable rental housing. The value associated with the tax credits allows residences in LIHTC developments to be leased to qualified households at below market rate rents. States receive an annual amount of tax credits based upon population and create a Qualified Allocation Plan (QAP) to guide the awarding of the tax credits. The program utilizes a 9% competitive credit that delivers an approximate 70% cost subsidy and a non-competitive 4% credit that provides an approximate 30% subsidy. The Texas Department of Housing and Community Affairs (TDHCA) is the state agency responsible for underwriting, allocating and monitoring LIHTC developments. Properties that receive LIHTC funds are generally monitored once every three years and must adhere to the requirements of U.S. Treasury, IRS and the US Department of Housing and Urban Development (HUD), as well as any applicable state and local laws and rules. If properties are not found to follow certain standards and other program requirements, the tax credits are subject to recapture. Tax credit recapture is especially rare with LIHTC developments.
LDG Development, a regional builder primarily concentrated in the south and southeast, is proposing the development of a 336-unit, 4% project at the corner of Oak Creek Way and IH 35 access road. The development will be income restricted to those households earning up to 60% of the area median income ($72,000 for a family of four) and will provide a range of one, two- and three-bedroom units. Because the tax credit program limits the maximum rents of these units based upon the number of bedrooms and household size, the maximum rents will be at or close to the following table when the project is placed into service sometime in 2022:
LDG has developed numerous properties in its markets, including Austin and San Antonio. The development will be required to adhere to LIHTC program requirements surrounding unit sizes and amenities, as well as those additional regulations promulgated by the City of New Braunfels. The developer has stated that the development will provide
financial literacy classes, after school tutoring, annual health fairs and on-site social events. Additionally, the following amenities will be available for residents to use - swimming pool, clubhouse, fitness center, business center/computer lab and meeting/gathering space.
A resolution of no objection is required in the applicant’s submission to TDHCA which specifically identifies the development and whether the applicable governing body has no objections to the development. The governing body must hold a hearing at which public comment may be made on the application and serves as the opportunity to obtain responses from the applicant regarding any questions or concerns about the proposed development. If the resolution is approved, the likelihood of the project proceeding to completion is extremely high.
ADDRESSES A NEED/ISSUE IN A CITY PLAN OR COUNCIL PRIORITY:
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X |
Yes |
Envision New Braunfels |
3.13 Cultivate an environment where a healthy mix of different housing products at a range of sizes, affordability, densities, amenities and price points can be provided across the community as well as within individual developments 3.30 Encourage and incentivize workforce/affordable housing to attract new workforce entrants and young families ACTION 3.31 Adopt policies and ordinances supportive of workforce housing, creating opportunities that make investment in workforce housing more feasible for private and nonprofit developers |
FISCAL IMPACT:
None
Recommendation
STAFF RECOMMENDATION:
Staff recommends approval of the resolution