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HomeMy WebLinkAboutIR 8670INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8670 To the Mayor and Members of the City Council March 24, 2005 aO Page 1 of 4 - SUBJECT: QUALIFIED ACTION PLAN FOR LOW INCOME HOUSING TAX 1615 CREDITS The purpose of this Informal Report (IR) is to provide City Council with salient excerpts from the Qualified Action Plan (QAP) for Low Income Housing Tax Credits ( LIHTC). The QAP sets forth the method, criteria, preferences and public input process that are used by the Texas Department of Housing and Community Affairs (TDHCA) to determine final scores. Tax Credits are competitively allocated and are issued based on final application scores. The maximum score an application may receive is 210. The extent to which the City is able to either enhance or detract from an applicant's score will in large part determine which projects are funded in Fort Worth. Additionally, it is important that a distinction be made between tax credits and a loss of property tax revenue. The allocation of tax credits does not affect the tax base of the project in any way. Tax credits are credits that are available on a per capita basis to every state by the Internal Revenue Service. These credits are sold by the developer to other entities who wish to limit their personal or corporate tax liability. The revenue from the sale of these credits is then used as equity for the development. Property taxes are paid by the owner of the development to all taxing jurisdictions unless the owner is also a property -tax exempt non - profit. While a non -profit can be the single entity owner and receive the tax credits, this is often not the case. In addition, recent legislative changes and City Council action have capped non -profit CHDO property tax exemption at 50 %. Additionally, the majority of LIHTC applications are new construction, meaning any property tax exemption would limit the amount of future taxes collected, not remove existing revenues from the tax rolls. The removal of a property from the tax rolls would only occur when a qualifying tax - exempt entity successfully received tax credits for the rehabilitation of an already existing project. DEVELOPER NOTIFICATION REQUIREMENTS Staff has determined that seven (7) applications have been submitted for tax credit projects in Fort Worth. The proposed projects are located in Council Districts 2,3,5,8, and 9. A table listing the seven projects is included as Attachment 1. The table is followed by a map (Attachment 2) illustrating the general location of the proposed tax credit project in relation to existing tax credit projects as well as proposed affordable housing developments in Fort Worth to be funded with Mortgage Revenue Bonds issued by the Tarrant County Housing Finance Corporation. Attachment 3 lists the name and addresses of the proposed County funded projects. The bond funded projects are governed by a different set of rules which staff would be glad to cover at a later date. The projects are included in this report only as additional information regarding proposed affordable housing development in Fort Worth. QUANTIFIABLE COMMUNITY PARTICIPATION FROM NEIGHBORHOOD ORGANIZATIONS At this stage in the process, the seven (7) applicants should have notified any neighborhood organizations on record with the state or county in which the development is to be located and ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS E To the Mayor and Members of the City Council No. 8670 March 24, 2005 Page 2 of 4 SUBJECT: QUALIFIED ACTION PLAN FOR LOW INCOME HOUSING TAX CREDITS whose boundaries contain the proposed development site. The responsibility lies with the developer to identify those organizations. The CFW Housing Department, in conjunction with the Community Relations Department, helps developers identify neighborhoods that could be impacted by a proposed development. Points will be awarded based on written statements of support or opposition from neighborhood organizations. Each neighborhood organization may submit one letter (and enclosures) that represents the organization's input. In order to receive a point score, the letter (and enclosures) must be received by TDHCA no later than April 1, 2005, directly from the neighborhood organization or with the application. To be scored, the letter (and enclosures) must provide "quantifiable" input. The input must clearly and concisely state each reason for the organization's support for or opposition to the proposed development. The score for this exhibit will range from a maximum of +24 for the strongest position of support to +12 for the neutral position to 0 for the strongest position of opposition. TDHCA is authorized but not required to request that the neighborhood organization provide additional information or documentation that the department deems relevant to clarify information contained in the organization's letter (and enclosures). LOCAL COMMITMENT OF DEVELOPMENT FUNDING Applications may qualify to receive up to 18 points for evidence that the proposed development has received an allocation of funds for on -site development costs from a municipality. In addition to loans or grants, in -kind contributions such as donation of land or waivers of fees such as building permits, water and sewer tap fees, or similar contributions that benefit the development will be acceptable to qualify for these points. Points will be awarded based on the per unit contribution to the project. In order to receive the maximum points, the per unit contribution must be $3,510. The City of Fort Worth has received funding requests from four (4) proposed projects which would meet this threshold. These requests are scheduled to be taken before the Housing and Workforce Development Committee on March 29, 2005. REDEVELOPMENT PLAN Applications may qualify to receive 7 points for an existing residential development project that proposes rehabilitation or demolition and reconstruction as part of a municipal /community revitalization plan. An example of a community revitalization plan would be an Urban Village and /or the Model Blocks areas, etc. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8670 To the Mayor and Members of the City Council March 24, 2005 T Page 3 of 4 • SUBJECT: QUALIFIED ACTION PLAN FOR LOW INCOME HOUSING TAX CREDITS TARGETED AREAS Applications may qualify to receive 4 points for a city- sponsored area or zone where a city has through a local government initiative, specifically encouraged or channeled growth neighborhood preservation, or redevelopment. Such developments must submit all of the following documentation: a letter from a city /county official verifying that the proposed development is located within the city- sponsored zone or district; a map from the city /county official which clearly delineates the boundaries of the district; and a certified copy of the appropriate resolution or documentation from the mayor, local city council, which documents that the designated area was created by the local city council /county commission, and targets a specific geographic area which was not created solely for the benefit of the applicant. For example, the City of Fort Worth's Neighborhood Empowerment Zone program would qualify as a targeted area and a project in these areas would be given points for this designation. COMMUNITY SUPPORT FROM STATE ELECTED OFFICIALS Applications may qualify to receive up to 14 points for support from a state elected official. Points will be awarded based on the written statements of support or opposition from state elected officials representing constituents in areas that include the location of the development only. No local elected officials can -give points for a letter supporting a proiect: this was a recent change to the QAP. Letters of support/opposition from a state elected official must identify the specific development and must clearly state support for or opposition to the specific development. This documentation will be accepted with the application or through delivery to TDHCA from the applicant or official by April 1, 2005. Neutral letters, or letters that do not specifically refer to the development, will receive neither positive nor negative points. Opposition letters can have a negative point impact. Support letters are 7 points each for a maximum of 14 points: opposition letters are -7 points each for a maximum of -14 points. The state representative or senator has the authority to call a special community meeting on a development on which TDHCA shall provide appropriate staff representation. A developer can call a meeting at any time, but it is not a requirement of the QAP. PUBLIC HEARINGS TDHCA will hold a public hearing in mid -April in each one of the 13 state service regions for the proposed applications. The public meeting, conducted by TDHCA staff, provides an opportunity for comment on all of the proposed projects found within the region. A public hearing is scheduled in Fort Worth on April 13, 2005 at 7:00 p.m. in City Council Chambers. Additionally, further public comment can be made at the TDHCA board meeting prior to when the applications are being considered, most likely in June 2005 and /or July 2005. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS To the Mayor and Members of the City Council No. 8670 March 24, 2005 Page 4 of 4 SUBJECT: QUALIFIED ACTION PLAN FOR LOW INCOME HOUSING TAX CREDITS ONE -MILE RADIUS RULE TDHCA is prohibited from funding tax credit applications for new construction for developments within one mile of each other if they have been awarded an allocation in the last 3 years. The applicant would be ineligible if they propose to construct a new development that is located one linear mile (measured by a straight line on a map) or less from a development that: (a) serves the same type of household as the new development, regardless of whether the developments serve families, elderly individuals, or another type of household; (b) has received an allocation of Housing Tax Credits for new construction at any time during the three -year period preceding the date the application round begins; and (c) has not been withdrawn or terminated from the Housing Tax Credit Program. Also, TDHCA cannot award two applications in the same year within one mile of each other. Should you require additional information, please contact Housing Director Jerome Walker at 817/392 -7537. cow'k�g -" Charles R. Boswell City Manager Attachments 1. List of Proposed Projects 2. Map Showing Locations of Projects 3. Tarrant County HFC 2005 Projects Preliminary Inducements ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS