DEPARTMENT: Department of Planning & Community Development
DEPARTMENT HEAD: Bridgett White, Director
COUNCIL DISTRICTS IMPACTED: Not located in a City Council district but near District 4
SUBJECT:
Consideration of a Resolution of No Objection for Medio Springs Ranch Apartments, a 348-unit multifamily affordable housing development in the City’s extraterritorial jurisdiction seeking non-competitive 4% Housing Tax Credits with the Texas Department of Housing and Community Affairs.
SUMMARY:
The City issued a Resolution of Support for the development of Medio Springs Ranch Apartments on February 19, 2015 for its competitive 2015 9% Housing Tax Credit application to the Texas Department of Housing and Community Affairs; however, the developer, Medio Springs, L.P., has amended the development proposal and is seeking a Resolution based on the following changes to its application:
• The developer is now seeking non-competitive 4% Housing Tax Credits; and
• The number of units proposed has increased from 180 units to 348 units.
BACKGROUND INFORMATION:
The Texas Department of Housing and Community Affairs’ (TDHCA) Housing Tax Credit (HTC) program is one of the primary means of directing private capital toward the development and preservation of affordable rental housing for low-income households in the state of Texas. HTCs 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. There are two types of HTCs: competitive 9% and non-competitive 4%. The non-competitive 4% HTC program is available year round whereas the competitive 9% HTC program has a single annual application period. The HTC program awards competitive application points for a resolution(s) from a Governing Body of a municipality showing local government support.
For TDHCA’s 2015 9% Competitive HTC program, Medio Springs, L.P. proposed a 180-unit multifamily rental housing development to be located at 1530 Marbach Oaks in the City’s extraterritorial jurisdiction, named Medio Springs Ranch Apartments. City Council passed and approved the Resolution of Support for the development on February 19, 2015 (Resolution #2015-02-19-0015R). Medio Springs, L.P. did not receive the competitive tax credits for this project.
ISSUE:
Following the City Council approval of a Resolution of Support for Medio Springs Ranch Apartments on February 19, 2015, the developer, Medio Springs, L.P. is submitting a new application to the Texas Department of Housing and Community Affairs (TDHCA) for non-competitive 4% Housing Tax Credits (HTC) for the development of Medio Springs Ranch Apartments, a 348-unit multifamily rental housing development located at 1530 Marbach Oaks in unincorporated Bexar County. The development is being conducted in partnership with the Housing Authority of Bexar County.
On the City’s scoring matrix for a Resolution of Support or No Objection, a minimum of six points must be earned in the section entitled “Experience of the Owner/Property Manager” in order to be considered for a Resolution of No Objection. Medio Springs, L.P. earned 20 points in this section, the maximum possible. Additionally, while the developer’s original 2015 application earned a total of 92 points (out of a possible 165 points), its current application earned a total of 109 points.
In support of the project, the Bexar County Housing Finance Corporation approved an Inducement Resolution for Medio Springs Ranch Apartments on December 6, 2016 with a 5-0 vote. Only one neighborhood association, Marbach Oaks Neighborhood Association, is located within 200 feet of the subject property, and issued a letter of no objection for the proposed development on October 5, 2016.
The value of the TDHCA tax credit award to Medio Springs Ranch Apartments will be approximately $19,248,010.00. The total development cost for this project will be approximately $51,577,823.00. All of the 348 planned housing units will be restricted to households earning at or below 60% of the area median income (i.e. a family of four will have a maximum income of $38,100). The 4% application is anticipated to be considered by the TDHCA Governing Board in September 2017. If approved, the project will commence in late 2017 and be completed by August 2019.
ALTERNATIVES:
City Council may elect not to issue a Resolution of No Objection, which would adversely impact the developer’s application with TDHCA’s Housing Tax Credit program and may deem the affordable housing development financially infeasible.
FISCAL IMPACT:
There is no fiscal impact to the City’s Budget with this staff recommendation.
RECOMMENDATION:
Staff recommends City Council approval of a Resolution of No Objection for Medio Springs Ranch Apartments, a 348-unit affordable housing development project listed herein seeking housing tax credits from the Texas Department of Housing and Community Affairs.