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GARLAND
POLICY REPORT
Work Session Item 3.b.
City Council Work Session Agenda
Meeting Date:
10/17/2022
Item Title:
2023 Low Income Housing Tax Credit Application Process
Submitted By:
Mona Woodard
Strategic Focus Areas
:
Vibrant Neighborhoods and Commercial Centers
ISSUE
The 9% Low-Income Housing Tax Credit (LIHTC) Application process through the Texas Department of Housing and Community Affairs is underway for the 2023 application cycle.
With seventeen (17) existing or recently approved LIHTC properties offering 2,325 units, Garland has the highest density of approved LIHTC properties per 1,000 population among surrounding cities. The two most recently approved LIHTC projects (Embree Eastside and The Reserve at Shiloh) are still moving through the development process. Based largely on these factors, City Council opted not to support any of last year's LIHTC applications.
Given this density, the fact that the two most recently approved LIHTC projects have yet to be completed, the availability of other types of affordable housing tools, and the extent of work required by developers to apply, staff recommends that the City Council not accept new LIHTC applications and requests for issuance of new Resolutions of Support for the 2023 application cycle.
RECOMMENDATION
Staff recommends that the City Council not accept any new LIHTC applications and requests for issuance of Resolutions of Support for 9% LIHTC developments for the 2023 application cycle.
BACKGROUND
The Low Income Housing Tax Credit (LIHTC) program is a federal resource for creating affordable housing in the United States. It is one of many affordable housing tools available to the Garland community, including HOME Fund projects, GHFC partnership projects, Public Facilities Corporation projects, and other multifamily redevelopment initiatives. The LIHTC tax credits are an attractive housing development tool for developers, as credits provide a dollar-for-dollar reduction in a taxpayer's federal income tax. In contrast, a tax deduction only provides a reduction in taxable income.
The Texas Department of Housing and Community Affairs (TDHCA) is the only entity in the State of Texas authorized to allocate tax credits under this program. Therefore, TDHCA must develop a plan for selecting eligible developments; this plan is known as the Qualified Allocation Plan and Rules (QAP). The QAP is revised annually and signed by the Governor. The deadline for potential new applications to be submitted is March 1, 2023. This is a highly competitive process; the QAP outlines and assigns points to each application section. Proposed developments are ranked according to the number of points obtained. Developers receive additional application points when City approved Resolutions of Support are included with the application submission.
Two LIHTC projects have recently been awarded tax credits by TDHCA and are still moving through the development process in Garland. Once completed, these two projects will add 213 housing units to the Garland community. The current projects underway are Embree Eastside by Palladium Developers, located at 563 Davidson Drive, and the Reserve at Shiloh by MVAH Development, located at 1102 N. Shiloh Road. With the completion of these projects, Garland will have the highest density of LIHTC units per capita in the surrounding area.
In addition to these LIHTC projects, The City of Garland and the Garland Housing Finance Corporation (GHFC) have greatly expanded their partnership to address affordable housing needs. For example, home repair and Code Cares programs have been expanded to keep residents in their homes, more HOME Infill projects are underway, the City has initiated a Public Facilities Corporation project, and GHFC continues to develop partnerships with affordable housing developers to bring multifamily housing to the City outside of the LIHTC 9% competitive program.
Finally, it is important to note that the application process is extensive and includes fees of $10.00 per unit. As a result, developers have already begun exploring possible 2023 LIHTC projects in Garland and are reaching out with questions about this year's application process and opportunities. If City Council concurs, staff recommends not accepting LIHTC applications for the 2023 application cycle.
Attachments
Garland LIHTC Projects
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