The Rowlett City Council received information and discussed workforce housing during its Oct. 8 work session.
The purpose of this item was to discuss the increased interest the Planning Division has seen since June regarding workforce accommodation utilizing the 4 percent and 9 percent Housing Tax Credit programs and to seek direction on whether or not council would want to establish an assessment process for proposed affordable housing development using the Texas Department of Housing and Community Affairs (TDHCA) tax credits. Housing types typically include multifamily development and independent/active senior living.
This discussion was to provide council an update on locations of interest, a synopsis of this housing program, and discuss possible procedures to better assess the program.
Munal Mauladad, director of community development, noted during the presentation that the vision statement of the comprehensive plan emphasizes the desire to provide a place with affordable and diverse housing. In addition, one goal of the plan is to provide housing that supports various lifestyles and population demographics within the community.
She said the Planning Division received a least a dozen inquires in 2019 regarding the viability of workforce housing accommodation at the following locations: North corner of Merritt Road and Castle Drive, north of intersection of Merritt Road and Castle Drive; and southeast of I-30 and Miller Road.
According to the presentation, there are two general categories of workforce housing commonly referred to as 4 percent and 9 percent Tax Credit Programs administered by TDHCA.
The programs are structured to deliver affordable rental solutions for individuals whose income levels are at or below 60 percent of the area median income (AMI) by allowing qualified applicants to pay a reduced rental rate that is capped at 30 percent of their income.
The current AMI in Rowlett for a family of four is $83,100 as determined by the Department of Housing and Urban Development (HUD).
The approval process varies depending on the structure, but both programs typically require the input of City Council for either a resolution of support (9 percent program) or no objection (4 percent program).
“The 4 percent program is structured to cover 30 percent of the overall cost of the project with a minimum of 50 percent funding source being secured through private activity bonds via a local housing authority. In this case it would be our Rowlett Housing Finance Corporation (HFC),” Mauladad said. “Typically these projects are tax exempt and the land is owned by the housing authority.”
She reported that in 2018, there were about 5,700 multifamily apartments developed in Texas as a 4 percent Tax Credit Program, and 272 units were approved for development in Rowlett.
The 9 percent tax credit program is structured so that tax credits cover 70 percent of the overall cost of the project and is facilitated through a competitive tax credit program, and the remaining 30 percent is secured through conventional funding sources, according to the presentation.
“It does not require the tax exemption; it can become fully funded without the need of private activity bonds,” Mauladad said.
“We received so many inquiries associated with these programs and we researched what other communities have done, and a lot of communities have an evaluation process to vet applicants,” she added.
Mauladad said the key components of evaluation include a policy statement, the type of project, the unit breakdown, location, size, duration of affordability on the project, annual schedule, meeting with staff and presentation to City Council.
It was decided that staff would come back with a draft document/criteria for council to look at and decide how to proceed from there.