Background

In 2016, City Council adopted a Housing Tax Credit (HTC) resolution request review process, which includes both the 4% and 9% LIHTC application types. KCG Development, a Multi-family (MF) developer, is seeking 4% HTCs for the construction of 206 units of affordable housing for families to be known as Espero Landing, and 123 affordable and 21 market rate units for seniors to be known as Asperanza Heights. The Texas Department of Housing & Community Affairs requires the City Council to approve two resolutions for each development for the developer to submit an application for 4% Housing Tax Credits. The resolutions are attached as Exhibit 1 - Resolution of No Objection and Two Times Acknowledgment.

City of Georgetown Resolution Request Process

As part of the 2016 Work Plan, the Housing Advisory Board updated the City of Georgetown Housing Tax Credit (HTC) resolution request process. On September 27, 2016, City Council approved a HTC process that requires applicants requesting a resolution to conduct public outreach to the surrounding neighborhoods, meet specific deadlines and provide a letter of intent with detailed information about the project. 

Resolution Request

Ina Spokas and CJ Linter of KCG Development, a Multi-family (MF) developer, are seeking 4% HTCs for the construction of 123 affordable and 21 market rate units for seniors to be known as Asperanza Heights for a portion of the Saddlecreek development located at the northwest corner of Sam Houston and Bell Gin Road. The property is zoned Planned Unit Development with an allowed multi-family use. KCG Development is proposing a tax exemption through partnership with a Housing Finance Corporation, meaning the parcel will not generate real estate taxes for the City.

The developer submitted an application requesting Resolutions of “No Objection” and the Two Times Acknowledgement resolutions to the Housing Coordinator on May 4, 2020. The application submitted is attached as Exhibit 2 - KCG Application for HTC Resolutions.The application submission was complete as outlined in the table below.

The developer presented the project at the June 15, 2020 Housing Advisory Board meeting.

The approved Public Outreach Plan (attached as Exhibit 3) includes:

· Two public meetings

o Virtual meetings at the below times:

• Meeting #1 June 12th at 5PM CST
• Meeting #2 July 10th at 5PM CST

· Letters

o KCG contacted residents in the ½ radius of the site via mail

· Signage

o Sign posted at site with meeting times and applicant contact information

· Ads

o KCG engaged the SaddleCreek HOA to have both meeting notices disseminated to residents via an Email Blast and via publication on the HOA Website

Public Meeting #1

The developer held the first required public meeting virtually on Friday, June 12th at 5:00 PM. Approximately 80 participants joined the meeting. The developer presented information about the project and answered questions regarding the developments.

Public Meeting #2

The developer will hold the second required public meeting virtually on Friday, July 10th at 5:00 PM. The developer will present information about the project and answer questions regarding the developments.

Housing Advisory Board meeting June 15, 2020

The application for the HTC resolution request was reviewed by the Housing Advisory Board on June 15, 2020 at a meeting held at the Georgetown Public Library. Two board members participated via phone (1 member only for part of the meeting), and 5 board members were in person at the meeting. The Board members made separate motions for each resolution type. The outcome of the Board meeting was:

1. Recommendation to approve the resolutions acknowledging Georgetown has two times the state average per capita number of housing tax credit units.
2. Recommendation to not approve resolutions of no objection.

The board members stated they did not have enough information on the proposed tax exemption or a proposed non-profit partnership for the development.

Fourteen members of the public were present and four signed up to speak. Resident statements included:

• Residential developer communicated property would never be developed
• Tax exemption is not appropriate if homeowners are required to pay
• Concern of proximity to affordable housing

KCG Development has provided additional information in response to questions the Housing Advisory Board asked at their June 15, 2020 meeting (see Exhibit 4 – KCG Development Additional Information).

2030 Comprehensive Plan

The 2030 Comprehensive Plan Update adopted on March 10, 2020, includes policies in the Housing Element to support the goal to “Ensure access to diverse housing options and preserve existing neighborhoods, for residents of all ages, backgrounds and income levels.” Policy H.5 of the Housing Element is:

· H.5. Support and increase rental choices for low-income and workforce households, unless the housing is substandard.

o Increase rental choices for workforce households through support of LIHTC development and providing incentives in development regulations, agreements and negotiated standards.

The applicant’s request is consistent with the housing policies by increasing rental choices for low income and workforce households.

Additionally, the housing diversity section of the Housing Element recommends promoting additional housing types to accommodate a range of ages, incomes, and lifestyles to address the challenge of limited available housing choices in Georgetown.

The 2030 Plan Implementation chapter outlines three implementation strategies for achieving the goals of the plan: regulatory framework, decision framework and plans, programs and partnerships. The chapter lists actions for each policy. A decision framework action for Policy H.5. is:

· H.5.b. Support the Low-Income Housing Tax Credit (LIHTC) developments that meet the City’s defined process.

Recommending the applicant’s request for resolutions if found to meet the City’s define process supports the 2030 Plan’s implementation strategy and action step for the housing policy that addresses rental choices for low-income and workforce households.

Low-Income Housing Tax Credit Program

The Low-Income Housing Tax Credit (LIHTC) program, created in 1986, is a federal housing development program and is the largest source of new affordable housing in the United States. The LIHTC subsidizes the acquisition, construction, and rehabilitation of affordable rental housing for low- and moderate-income tenants. The Texas Department of Housing and Community Affairs (TDHCA) allocates housing tax credits under a 4% and 9% program, each with different funding sources and application requirements. Rules for the programs are outlined annually in the Qualified Application Plan (QAP). The state approves the QAP each fall and awards for the 9% program are generally allocated the following July. Awards for the 4% program considered on a rolling basis.

4% HTC program (non-competitive)

The 4% HTC is a non-competitive program that uses tax-exempt bonds as a component of project financing. Applications for the 4% HTC program require a “Resolution of No Objection” from the city and/or county where the project is located. Applications for the 4% HTC program can be submitted to TDHCA throughout the year.

Twice the State Average Per Capita

In order to submit an application for Housing Tax Credits, the developer is also required by the State to obtain a resolution from Georgetown acknowledging that the city has more than two times the state average per capita amount of Housing Tax Credit units. In Texas, there is an average of 0.0097 tax credit units for each state resident. In Georgetown, we have 0.027 units per person, 2.82 times the average amount of statewide units of tax credit. The table below compares the surrounding counties and cities. No county in Texas has more than twice the state per capita number of units. Each year the State releases a Site Demographic Characteristics Report that lists each place (city), their population and number of housing tax credit units, and whether the place has 2x Per Capita. The numbers represented below are from the State of Texas 2020 Qualified Application Process and are the numbers used by the State and City to evaluate the ratio of population to number of housing units. The Site Demographic Characteristics Report 2020 uses the American Community Survey 2013-2017 5-year population estimates. The number of units are from TDHCA’s inventory of tax credit developments (as of November 7, 2019 TDHCA Board meeting).

Findings

Staff finds the application to be complete and further the goals of the 2030 Comprehensive Plan.