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TAAHP QAP Committee Co-Chair Lora Myrick attended the TDHCA Board meeting held on November 10, 2021, in Austin, Texas.  There were changes made to the final draft of the QAP sent to the Governor’s office on November 15, 2021, for review and feedback. Below Myrick provides a summary of items recommended by TAAHP that did and did not make it into the draft submitted on November 15th.

TAAHP made the following comments and recommendations:
  • 11.7 Tie Breakers – TAAHP requested the three-year average be removed and have a flat 20% poverty threshold to be used in all regions with the exception of regions 11 and 13. This request would be consistent with Opp Index threshold criteria.  We further requested to have the tie-breakers separated out into three distinct tie-breakers.
  • Staff did not make any changes to this category, as they felt that timing of the QAP process does not allow for additional rounds of public comment. 
  • 11.9(c)(7) Proximity to JobsTAAHP recommended that these criteria be simplified by removing the population component of the criteria and simply make it rural vs. urban. Additionally, the radius for rural would be 4 miles and the radius for urban would be 2 miles.  It should be noted that 17 other commenters agreed with TAAHP’s position.  There were 8 commentors that supported language as is, and 2 that wanted more review of population and did not agree with expanded radius.
  • Staff did not make any changes to this category, as they felt that timing of the QAP process does not allow for additional rounds of public comment. 
  • 11.9(d)(7)(A) Concerted Revitalization PlanTAAHP recommended a 2-point option to be added to the sites that are in the footprint of a plan, but that are not in a QCT. The applicant would be able to claim 2-points if they provided a letter from the appropriate local official for the municipality that identifies the proposed development as contributing to the CRP efforts.
  • Staff accepted this recommendation and modified the QAP to reflect the recommendation. 
  • 11.9(e)(7)(B) Right of First RefusalTAAHP recommended that this point category be removed and tabled for further discussion and public comment for the 2023 QAP. The industry does not feel ready to implement this category and there was no guidance from TDHCA other than for us to come up with solutions.  For us, TAAHP and the industry, we felt like there was insufficient time to vet out all the potential issues and formulate solutions.  Of the 13 commentors on this item, 10 recommended to remove.
  • Staff did not make any changes to this category, as they felt that timing of the QAP process does not allow for additional rounds of public comment.  They are also committed to compliance with Section 42, as this point category has been missing from the Texas QAP for a number of years. 
  • 11.204(6) Experience RequirementTAAHP recommended that experience certs issued by TDHCA between 2014 and 2021 be valid for the experience requirement in the application rather than experience certs issued between 2015 and 2021.
  • Staff accepted this request from TAAHP and the industry and made the appropriate modifications. 

 

Subchapter F. Supplemental Housing Tax Credits
  • 11.502 Program Calendar for Supplemental Housing Tax CreditsTAAHP recommended the Notice of Intent be submitted in early November so the development community could evaluate those potential applications as it contemplates site selection for the traditional application cycle in 2022. TAAHP further recommended an application deadline of roughly December 10th with board approval in March of 2022.
  • Staff accepted the recommendations.  The Notice of Intent is due November 19th with awards made in February of 2022.
  • 11.503(b) Maximum Supplemental Housing Tax Credits, Requests and Award LimitsTAAHP recommended to lower the cap on supplemental credits from 15% to 7%.
  • Staff accepted the recommendation.  It should also be noted that staff rejected a request to increase the total credits available to supplemental allocations. 
  • 11.505(c) Supplemental Credit Allocation ProcessTAAHP recommended to rank supplemental credit applications by original score, which supports TDHCA’s approach described in the September 20th roundtable discussion. TAAHP further recommended to implement tie-breakers, as suggested for the 2022 QAP, to further prioritize supplemental credit applications.
  • Staff did not accept the recommendation and left language as it was.  However, they did recommend the use of tie-breakers and the tie-breakers will be what is currently drafted in the QAP and not the recommendations made by TAAHP for the 2022 QAP.   
  • 11.507 Required Documentation for Supplemental Credit Application SubmissionTAAHP recommended that as part of the supplemental application documentation, an applicant be required to provide evidence from the investor that the additional credits will be purchased and include the dollar amount associated with the purchase. This would be for the benefit of REA in their underwriting evaluation.
  • Staff accepted the recommendation and made the necessary modifications to the QAP.

 

Second, there were changes made to the QAP based on public comment during the board meeting.  Staff made the following changes to the draft QAP that will go to the Governor’s office:
  • The $2MM dollar cap was re-instated by the board. The second draft reduced the cap to $1.5MM, but it is back up to $2MM.
  • Undesirable Site Features had added (K) – Joint Land Use Study areas. This has great impact in military base cities.  For example, 70% of San Antonio is covered by Joint Land Use Studies between military bases and surrounding municipalities.  As written, a developer could not be within a Joint Land Use Study area and be able to mitigate.  Staff limited this prohibition to Accident Zones and Clear Zones (which is already in the rule) and allowed for mitigation of noise hazards down to 65 db – up to 70 db can be mitigated without board approval, above 70 and below 75 must come before the board to explain mitigation and receive approval from board, and 75 db and greater are prohibited.
  • Special Needs Population – the original draft showed 3 points; however, the current draft shows 4 points, essentially making the Veteran’s facility a requirement rather than an option under this point category. Additionally, this is a huge change made without the public being aware to comment.  This was rolled back to the original language in the first draft.
  • Continuum of Care points are now available to USDA and At-Risk applications.
  • USDA set-aside language will be massaged further to ensure compliance with statute – no less than 5% will be allocated to USDA set-aside…
  • For underserved, the AHNI date for that data set will be updated. It appears that the data is correct, only the date reflected was incorrect.  Appears to be a typo.
  • ROFR – Staff did modify the “and” to “or”. As written, it seemed possible to get two points, although after further review of the language, it would be difficult to achieve both.  We did request that each criterion be worth one point for a one-point category.  That suggestion by TAAHP and others was rejected by staff.  While is it an “and” vs. “or”, the first option will be worth one point and the second option will be worth 2 points.  Our concern is that everyone will go for those two points and open up several issues that have not been thought through properly and applicants will be going back to TDHCA and the board for solutions.

 

Additional Information on Supplemental Credits
  • Supplemental Credits Notice of Intent will be due November 19, 2021 – Materials for the Notice of Intent will be released November 12, 2021.
  • Supplemental Credits Application materials will be released on November 19, 2021.
  • Supplemental Credits Applications will be due to TDHCA on December 10, 2021.
  • Supplemental Credits Allocations will be made February 2022.
  • 2022 Draft Application and Procedures Manual to be released November 18, 2021 for feedback from industry as these materials are used for Bond Lottery apps and 2022 HTC apps.
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