HomeMy WebLinkAboutLow income Housing Tax Credit Application Criteria_Part11 Commission Memorandum
REPORT TO: Honorable Mayor and City Commission FROM: Tracy Menuez, HRDC, CAHAB Liaison
Tim McHarg, Planning Director
SUBJECT: Low Income Housing Tax Credit Applications, Criteria for City of Bozeman Support
MEETING DATE: November 19, 2012
AGENDA ITEM TYPE: Action
RECOMMENDATION: Approve a process and criteria for responding to requests for support
for Low Income Housing Tax Credit (LIHTC) developments.
SUGGESTED MOTION: I move to approve the proposed Criteria for City Support for the
Low Income Housing Tax Credit Program.
BACKGROUND: The Low Income Housing Tax Credit (LIHTC) program has been identified by the City as a key tool for encouraging the development of rental housing affordable
to lower-income households. The City’s Affordable Housing plan has the stated goal to, over a
five year period, create 200 multifamily units for households earning between 30 and 60% of the
area median income using LIHTC and other subsidies. In order to access this funding from the
Montana Board of Housing, developers are required to submit a letter of support from their local jurisdiction. Previously, the City has not had a formal process for providing support, which has
led to confusion among staff and developers. Outlining criteria and a process for providing
support encourages LIHTC development in the City and promotes early communication between
developers and City Staff, thus ensuring that LIHTC projects receiving City support meet the
needs identified in the City’s Affordable Housing Plan.
UNRESOLVED ISSUES: None
ALTERNATIVES: The Commission has the following alternative actions available: 1. As recommended, approve the criteria for support for LIHTC projects;
2. Approve the criteria for support for LIHTC projects with specific changes as determined
by the Commission;
3. Table the item, with specific direction to staff for revision of the criteria for support for LIHTC projects; or, 4. Continue the current system of providing letters of support on an ad hoc basis without
defined criteria.
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FISCAL EFFECTS: No fiscal effects exist for providing letters of support. In the event that the
Commission elects to provide financial assistance to a proposed project, the fiscal effect would
vary according to project request and available budget.
Attachments: Criteria for Support and Request for Support Form
Report compiled on: November 8, 2012
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Low Income Housing Tax Credit Applications
Criteria for City of Bozeman Support
Background:
The Low Income Housing Tax Credit (LIHTC) program has been identified by the City as a key tool for
encouraging the development of rental housing affordable to lower-income households. The City’s
Affordable Housing plan has the stated goal to, over a five year period, create 200 multifamily units for
households earning between 30 and 60% of the area median income using LIHTC and other subsidies. In
order to access this funding from the Montana Board of Housing, developers are required to submit a
letter of support from their local jurisdiction. In support of the City of Bozeman’s Affordable Housing
Plan, the City has outlined the process below to assist developers seeking City support for Low Income
Housing Tax Credit (LIHTC) Applications. City support can be in the form of a letter of support, or, for
qualified projects, financial assistance in addition to a support letter.
Deadline for requests:
Developers of LIHTC properties must submit their request for support from the City along with the
required information 45 days before applications are due to the Montana Board of Housing (applications
are typically due to MBOH by the third Friday of January, as outlined in the Qualified Allocation Plan).
Criteria for Support:
Full criteria for City support of Affordable Housing Activities can be found in Appendix B of the City of
Bozeman Affordable Housing Action Plan for 2012-2016:
http://www.bozeman.net/Smarty/files/51/513668ad-f9e9-4ff7-a5ab-21953d79856f.pdf
Appendix B outlines maximum affordable rents, threshold requirements for support, and evaluation
criteria that will be reviewed in determining the City’s support.
Financial Support:
As outlined in Appendix B, LIHTC projects serving extremely low-income renters and special needs
clients may request financial support. Financial support is based upon funding availability and meeting
eligibility criteria in Appendix B. Projects anticipating a need for financial support should contact the City
as early as possible to ascertain the availability of funding.
Ranking Process:
Requests will be evaluated to determine if they meet the threshold requirements outlined in Appendix
B; those meeting threshold requirements will be scored by City and CAHAB staff according to the
following criteria:
• Review of market study – 20 points
To what extent do the market study and other available data demonstrate a need for the
proposed project?
• Review of financial data – 20 points
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Sources, uses and budget forecasts will be evaluated for reasonableness and long-term project
sustainability.
• Capacity of development team – 20 points
Do the team and key staff have experience with this type of project? How has the applicant
performed in the past? Has the developer made previous requests to the City or State
Department of Commerce to restructure commitments made on similar projects?
• Affordability of rents – 40 points
Rent schedules will be evaluated for the populations to be served and the rents proposed to be
charged by rent level.
• Inclusion of units for households earning less than 30% AMI – bonus points
The City has an interest in promoting the development of units for households earning less than
30% of the area median income. At the same, a balanced approach dictates that developments
be comprised of a mix of income levels and that very low income renters are not overly
concentrated in one development. The City will reward 5 bonus points per unit directed to
households earning less than 30% AMI.
Applications and the staff report will be forwarded to the Community Affordable Housing Advisory
Board (CAHAB). The CAHAB will forward the staff report and a CAHAB recommendation to the City
Commission, which shall have the final authority to determine which project(s) will receive letters of
support. The City Commission may elect to support more than one proposed project, and/or rank the
projects they are supporting.
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City of Bozeman
Low Income Housing Tax Credit
Request for Support
Project Name:
Developer(s):
Non-profit partner (if applicable):
Project Address:
Number of Buildings: Number of Units:
Amount of Credits being requested: Affordability Period:
Proposed Unit Mix:
# baths # at 30%
AMI or less
# at 40%
AMI or less
# at 50%
AMI or less
# at 60%
AMI or less
Studio
1BR
2BR
3BR
TOTAL at rent level 0 0 0 0
TOTAL # of Units 0
Proposed Rents:
30% AMI
or less
40% AMI
or less
50% AMI
or less
60% AMI
or less
Studio
1BR
2BR
3BR
Please provide responses to the following questions as an attachment to this form.
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1) Provide a brief description of the proposed project. Include information regarding project
location, number of units, type of units, development/unit amenities and any other information
you would like the city to consider.
2) Describe how the proposed project meets or exceeds the Green Building standards outlined in
Appendix C of the City of Bozeman Affordable Housing Action Plan.
3) Explain how the proposed project is in support of the City of Bozeman’s Affordable Housing plan
and serves a target income group identified by the plan.
4) How will your firm ensure that the long-term management of the project will 1) provide
adequate funding for project sustainability, and 2) be responsive to the needs of low-income
residents?
Attachments (for all support requests):
• Narrative responses
• Site plan
• For each unit type: proposed rent, # of bedrooms, # of bathrooms, rent level (AMI targets)
• Market Study
• Project financial data – sources and uses; 10 year operating budget; if supportive services are
identified as crucial to the project, the operating budget must include forecasted revenue and
expenditures for these services
• List of development team, including relevant experience in developing/owning similar projects.
Please attach resumes for key staff and firm principals.
If the project is requesting financial assistance, please answer the following:
Amount of financial assistance requested:
Number of units for which assistance is requested:
Please list the other subsidies the project has applied for, the amount requested from those sources, if
the funds have been awarded, or the anticipated award date.
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