It worked! TDHCA Tax Credit Exchange Program gets apps for 883 ELI apartments

The 2009 Stimulus Bill (American Recovery and Reinvestment Act of 2009) contained a provision allowing the limited exchange of tax credits granted under the Low- Income Housing Tax Credit (LIHTC) program for cash grants.

In Texas, the Texas Department of Housing and Community Affairs (TDHCA) recently adopted a policy providing incentives for developments to increase the number of units reserved for Extremely Low Income (ELI) households (i.e. those households earning not more than 30% of the area median income). Traditionally, the LIHTC program targets all but a small fraction of the apartments created under the program to families earning 50 percent to 60 percent of the area median, leaving ELI households. Under the adopted incentives, developments increasing the number of ELI units offered are eligible to receive a higher cash price for their tax credits, as well as a greater claim to the residual project value.

Texas Low Income Housing Information Service has analyzed TDHCA’s Notice of Intent to Return Credits Log1 to determine the impact of the incentive program.

Our findings:

1. Fifty-Nine Percent of all applicants to the Exchange program offered to provide additional ELI units, resulting to 883 new housing units targeted at ELI residents.

2. These additional units were fairly evenly allocated by target demographic population, with 435 new Elderly units, 411 new General units, and 37 new Intergenerational units resulting from the incentive program.

3. Although a greater percentage of rural deals elected to provide additional ELI units, (65% of rural deals vs 54% of urban deals) there were more urban deals in the application pool (and they tended to be much larger deals), resulting in 67% of the total ELI additional units being placed in urban areas. (590 new Urban ELI units, 293 new Rural ELI units)

4. Rehab deals were more likely to elect to provide additional ELI units: 72% of Rehab deals vs. 52% of new construction, but again, more ELI units resulted from new construction (541) than Rehab (342).

The table below summarizes the additional ELI units by TDHCA allocation region.

Region Representative City   New ELI Units  Total Units  % New ELI Units
1      Lubbock/Amarillo            24          413           6%
2      Wichita Falls	           52	       426	    12%
3      Dallas/Fort Worth          162	      1833	     9%
4      Tyler/Texarkana	           48	       336	    14%
5      Beaumont                    16	       400	     4%
6      Houston	                  251	      3380	     7%
7      Austin                      61	       884	     7%
8      Waco	                   71	       576	    12%
9      San Antonio	           69	       615	    11%
10     Corpus Christi	           36	       503	     7%
11     McAllen/Brownsville         50	       820	     6%
12     Midland/Odessa              23	       180	    13%
13     El Paso        	           20	       194	    10%
Total	                          883	    10,560	     8%

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Additional Web Resources: Texas Department of Housing and Community Affairs: http://www.tdhca.state.tx.us/recovery/detail-htc-exchange.htm

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