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Elizabeth Pagano is the editor of the Austin Monitor.
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Travis Commissioners to vote on trio of affordable housing projects
Friday, February 22, 2013 by Elizabeth Pagano
The Travis County Commissioners Court is looking at a new way to bring affordable housing to areas outside the city. Commissioners will vote next week on whether to endorse three projects seeking competitive housing tax credits from the state.
The largest project, which is asking for $1.8 million, would be located off of RM 620. Adrian Iglesias told the commissioners court that the project, dubbed the “Windy Ridge Apartment Homes” would be set aside for working families and veterans. All 120 units would be at 60 percent area median family income (AMFI) or below.
VP of Realtex Real Estate John Boyd said that he was planning to ask the county for $60,444 for an 80-unit development in the city of Manor, with all units under 60 percent AMFI.
Finally, Resolution Real Estate is asking for $425,000 for their 117-unit project that will be focused on seniors. The project will be located in Pflugerville.
Though the Texas Department of Housing and Community Affairs competitive nine-percent tax credits have been in place since the late 1980s, this would be the first time Travis County, or the Travis County Housing Finance Corporation (HFC) takes part in the program.
At this stage, the county is facing a March 1 state deadline. By that date, officials must have drafted letters to the state saying the applications are under consideration. These letters show the state, essentially, that there is support for these housing projects.
If any of these projects are ultimately accepted for the tax credit, either the county or the HFC would make the loan to the project. Though one of the entities (either the county or the corporation) would make the loan, they would also hold the certificate of deposit.
As a result, explained Naman Howell Smith & Lee attorney Cliff Blount, the financial risk to the county would be “virtually non-existent.”
“If for some reason the loan was defaulted on, the county could just foreclose, or take over that certificate of deposit, pay itself off, and be whole,” said Blount.
Judge Sam Biscoe proposed delaying the vote in order to present the item to a full court, as both Commissioners Ron Davis and Margaret Gomez were absent on Tuesday.
“This would be a major shift in how we do business here,” said Biscoe, who said they were certainly looking for a way to be supportive, either as the county or as the Travis County Housing Finance Corporation.
In years past, the process typically would go through a regional HFC, but shifts in state policy mean that projects must go through the HFC of the county or municipality in which it would be located.
Jim Shaw, executive director of the Capitol Area Housing Finance Corporation, told the commissioners that his organization had done about 29 of these kinds of loans over the past three years. In total, he estimated they had lent about $20 million and helped put about 2,000 affordable units on the ground. He said there had never been trouble, financially, as the loans were all cash collateralized.
Shaw noted that the program was extraordinarily competitive. He estimated that in Region 7, which includes the county as well as Austin, there may be enough credits to do one urban and one rural project this year, though there was a possibility of a third project being accepted.
There are currently 23 applications for Region 7 projects. Of that number, only these three are asking to go through Travis County. If commissioners endorse the plans, they will be in direct competition with several city of Austin affordable housing projects.
Eckhardt said that she was supportive of the presented projects, but wanted to explore ways in which the county might put “real skin in the game” through collaboration with members of the housing development community.
“Because this feels a little strange to me,” said Eckhardt.
“This is skin in the game of a sort, but it’s not real skin in the game. Since there’s no real financial risk to us, and there’s really no ask to y’all,” said Eckhardt. “It feels like – and this made me uncomfortable when I saw it over there – when the developers of Formula One put in their own money, to give to the city…for the Major Events Trust Fund.”
Boyd told the commissioners court that his experience with HFCs around the state had been that they generally “take all comers” and let the state sort out which deals are most worthy, based on their own criteria.
Shaw said the chances of someone submitting another application for this year were “almost non-existent” at this point, given the looming state deadline.
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