A Look at Housing Credit Programs in the Four Corners' Region

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A Look at Housing Credit Programs in the Four Corners' Region

6 | Housing Credit Programs in theFour Corners’ Region – AZ, CO, NM, UTwhich includes the cities of Phoenix and Mesa, and in Pima County, whichincludes the city of Tucson.ADOH doesn’t issue tax-exempt multifamily housing bonds but takesapplications for 4% housing credits for bond-financed projects year-round.The Arizona Finance Authority can issue tax-exempt multifamily bonds forprojects anywhere in the state except Maricopa and Pima Counties. There arelocal industrial development agencies that are issuers, too.Possible gap financing sources from ADOH for LIHTC projects includefederal HOME dollars and state housing trust fund monies, offered whenavailable. The Arizona Community Foundation offers small low-interest predevelopmentloans.The likely timetable for ADOH’s 2014 housing credit program is the issuanceof a draft 2014 qualified allocation plan (QAP) before September 2013,focus groups and public hearings afterwards, QAP approval by the governor byyear-end, a January workshop, and an application deadline in March 2014. Thefirst focus group will be held during the 2013 Arizona Housing Forum, set forSeptember 18-20 in Scottsdale.Encanto Pointe ApartmentsPhoenix, ArizonaColorado Housing Credit ProgramThe Colorado Housing and Finance Authority (CHFA) has completed thefirst of two tax credit application rounds this year, both to reserve 2014 housingcredits.In Round 1, letters of intent were due February 1 and applications dueMarch 1. In Round 2, the letter of intent deadline was June 3 and the applicationdeadline is July 1. CHFA Manager of Tax Credit Allocations Tasha Weaverexpects Round 2 reservation awards to be announced by mid-September. TheColorado – Top 5 Cities in Population as of July 1, 2012CityPopulationEstimate7/1/12%PopulationChangeSince 7/1/121. Denver 634,265 +5.1%2. Colorado Springs 431,834 +3.0%3. Aurora 339,030 +4.0%4. Fort Collins 148,612 +3.0%5. Lakewood 145,516 +1.6%Colorado 5,187,582 +2.8%Source of population estimates: U.S. Census Bureau(1) Source: U.S. Dept. of Housing and Urban Development(2) Denver-Aurora-Broomfield MSA(3) Colorado Springs HMFA(4) Fort Collins-Loveland MSA(5) Source: National Association of Realtors(6) Denver-Aurora(7) Colorado Springs60% of Area MedianIncome, 20131-Person Family (1)4-Person Family (1)$32,700 (2)$46,680 (2)$29,340 (3)$41,880 (3)$32,700 (2)$46,680 (2)$31,860 (4)$45,480 (4)$32,700 (2)$46,680 (2)% Change in 60% of AMISince 20101-Person Family4-Person Family+2.4%Median SalesPrice, ExistingHomes, 1 st Q2013 (5)% Sales PriceChange from 2010+2.5% $261,200 (6) +12.4%-1.2%-1.1% $203,900 (7) +4.3%+2.4%+2.5% $261,200 (6) +12.4%+1.1%+1.2% NA —+2.4%+2.5% NA —


7 | Housing Credit Programs in theFour Corners’ Region – AZ, CO, NM, UTagency has about $11.6 million in2014 housing credits available forboth rounds.Weaver said CHFA’s prioritiesthis year are the same as last yearwith a few tweaks. “We have sevenpriorities,” she says. “That includesacquisition/rehab, homeless, specialneeds, seniors, pent-up demand(primary market areas with very lowmarket-rate and LIHTC rentalvacancy rates), projects servingcounties with less than 175,000people, and TOD (transit-orienteddevelopment) sites.”CHFA’s 2013 housing creditprogram has only two set-asides: at least 10% of available credits for projectswith nonprofit sponsors, and up to $1.25 million for the Denver HousingAuthority for a HUD HOPE VI project.Without numerous set-asides, the particular kinds of projects that areselected for credits depend on the type and strength of applicationsthat come in the door. Accordingly, there is no fixedformula for a certain share as family projects, seniors projects,etc. The mix can vary from round to round. “We are one of thestates that does not award projects strictly by points,” says Weaver.Tasha Weaver“We have more of a subjective process. They have to score a minimumnumber of points to hit threshold, but beyond that it’smore qualitative.”She added, “in our QAP we have guiding principles, and part of that is totry to disperse the credits around the state and to meet the different types ofneeds in the state, not only geographically but in terms of type.”In Round 1, CHFA had a nearly 4 to 1 ratio in terms of total requested creditsto available supply. The agency reserved $6.35 million in credits for 419housing units in three family and three senior projects and one permanent supportivehousing project for the homeless.According to Weaver, CHFA is seeing “pent-up demand for affordable unitsthroughout much of the state,” including the Denver metro area, other largecities, and even some resort and rural communities. As far as project type, shesays there’s “huge demand” for affordable senior units and growing demand forunits serving special populations.Provincetown Green CommunitiesFort Collins, ColoradoPhoto: ©Scott Dressel-Martin


8 | Housing Credit Programs in theFour Corners’ Region – AZ, CO, NM, UTCHFA does not have any specific gap financing programs. The city of Boulder,though, has an inclusionary zoning ordinance that requires developers ofnew market-rate multifamily housing projects to have a certain percentage ofunits as affordable, either on or off site.CHFA issues tax-exempt multifamily housing bonds and takes applicationsfor bond financing and 4% housing credits any time except December.Weaver anticipated that CHFA will issue its first draft 2014 QAP this August,with board approval hopefully by the end of October. CHFA may hold two applicationrounds in 2014 but is exploring the possibility of just one round, she said.Utah Housing Credit ProgramThe Utah Housing Corporation (UHC) is gearing up for next year’s taxcredit program, having issued a draft 2014 QAP for public comment. One applicationround is proposed with an application deadline of October 7, 2013.The 2014 QAP could be finalizedaround August 1 st . An applicationtraining workshop is likely in midtolate-August. Next year’s roundwill offer all of Utah’s 2014 percapita housing credits, of roughly$6.2 million, and possibly someadditional credits.UHC previously awarded about$6.3 million in 2013 federal 9%housing credits to 14 projects, alongwith $11,120 in state housing taxcredits to another four projects.The agency received total requestsfor nearly $11.6 million in federalcredits and $26,820 in state credits.Claudia O’Grady, UHC Vice President of Multifamily Finance, says thepriorities in the agency’s LIHTC program emphasize transit-oriented developmentsand projects for families and special needs populations. Transit-orientedprojects are those within one-third mile of the expanding light rail system thatruns all along the Wasatch Front and has east-west and north-south lines.O’Grady said Utah is “very urbanized” with about 85% of residents livingalong the Wasatch Front, a metropolitan area in the north-central part of thestate that includes Salt Lake, Utah, Davis, and Weber Counties. Within this areaare Salt Lake City, Provo, and some large suburban cities.Liberty Peak Apartmentsoutside Park City, Utah


9 | Housing Credit Programs in theFour Corners’ Region – AZ, CO, NM, UT“We try to focus our resources to those areas of need,” saysO’Grady. “Having said that, we do make provisions to ensure thatwe do at least one rural project, maybe even two projects, a year.”O’Grady says there is a “large disconnect” in Utah betweenwhere low-income households live and where the jobs are. Examplesare resort areas that need low-wage workers but don’t have Claudia O’Gradymuch if any affordable housing for them.Utah’s draft 2014 QAP proposes the same four set-aside pools as this year.These are:• Nonprofit-sponsored projects – At least 10% of the available credits;• Projects in non-metro areas and small projects – 25%;• Government and nonprofit-sponsored homeownership projects(i.e. lease-purchase) – 5%; and,• General Pool – 60%.UHC isn’t proposing any significant changes in its 2014 QAP. O’Grady,though, indicated that the agency is proposing to expand the definition of ruralto enable more communities to qualify for the non-metro set-aside pool and isadding points for cost efficiency in projects.UHC issues tax-exempt multifamily housing bonds and accepts applicationsfor bond financing and 4% credits year-round. The agency also has a few gapfunding sources available for LIHTC projects. These include the state housingtax credit, which can be combined with either 9% or 4% federal housing taxcredits, and low-interest loans made under UHC’s Olene Walker Housing LoanFund program. UHC’s “CROWN” program utilizes a portion of the state’s annual9% housing credits for lease-purchase projectsSalt Lake City has a local housing trust fund.Providence Place ApartmentsSalt Lake City, UtahUtah – Top 5 Cities in Population as of July 1, 2012CityPopulationEstimate7/1/12%PopulationChangeSince 7/1/121. Salt Lake City 189,314 +1.5%2. West Valley City 132,434 +2.1%3. Provo 115,919 +2.6%4. West Jordan City 108,383 +4.0%5. Orem 90,749 +2.3%Utah 2,855,287 +2.9%Source of population estimates: U.S. Census Bureau(1) Source: U.S. Dept. of Housing and Urban Development(2) Salt Lake City HMFA(3) Provo-Orem MSA60% of Area MedianIncome, 20131-Person Family (1)4-Person Family (1)$29,580 (2)$42,180 (2)$29,580 (2)$42,180 (2)$26,820 (3)$38,280 (3)$29,580 (2)$42,180 (2)$26,820 (3)$38,280 (3)% Change in 60% of AMISince 20101-Person Family4-Person Family+0.6%Median SalesPrice, ExistingHomes, 1 st Q2013 (7)% Sales PriceChange from 2010+0.4% NA —+0.6%+0.4% NA —-2.0%-2.0% NA —+0.6%+0.4% NA —-2.0%-2.0% NA —


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