Feature Illustration: Architect’s rendering of Lofts at Temple Medical District, an elderly residents affordable housing project that was approved for 9% tax credits last month by the TDHCA.
Austin (Travis County) — The Texas Department of Housing and Community Affairs Governing Board approved on July 23 for the Fiscal Year 2020 cycle of 9% housing tax credits $81.6 million in leverage financing to private developers constructing or rehabilitating 71 properties (totaling 5,296 units) across the state.
These communities will offer rents affordable to households earning up to 60 percent of the area median family income.
Investors purchasing credits allocated to developers may apply the credits toward their federal tax liability each year for 10 years on a dollar-for-dollar basis in exchange for their investment in the property; marking today’s awards an approximate value of $810 million over the 10-year term.
“With today’s awards, TDHCA continues its efforts to establish or rehabilitate high-quality and affordable housing for working families and elderly Texans,” explained Bobby Wilkinson. “The housing tax credit programs serve not only as essential financial tools to aid in the development and construction of affordable housing, but also help local economies with strong job creation.”
This year’s Competitive 9% HTCs are expected to help finance the building of 54 high quality, new properties with a total of 4,359 units, and the rehabilitation of 17 properties offering 937 units to income-eligible households across the state.
The at-risk set aside, totaling more than $12 million for the 2020 cycle, is used for the rehabilitation or reconstruction of aging housing developments that could soon lose rental subsidies provided to their low-income residents.
In 2019, the HTC Programs (Competitive 9% and Non-competitive 4% HTC Programs) accounted for more than $136 million (par value of $1.36 billion) being awarded to developers to help in the construction or rehabilitation of more than 120 multifamily properties, with more than 12,500 units being preserved or built.
It’s estimated that the new construction and rehabilitation of those developments, alone, led to the creation of more than 25,000 jobs statewide, and produced an approximately $4.2 billion economic impact for the state.
The Housing Tax Credit Program, authorized under the Internal Revenue Code, is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers use proceeds from the sale of the credits as financing for their property. The credits announced today are designed to cover approximately 70 percent of each property’s eligible development costs.
Edited from a TDHCA new release.