a
M

The TDHCA convened its board meeting at 10am, April 15, 2022 at the John H. Regan Building, JHR 140 1400 Congress Ave Austin, Texas 78701

April 15th Meeting Summary

TAAHP Staff attended the board meeting and have summarized its main takeaways. Click here to can watch a video recording of the entire meeting.

ANNOUNCEMENTS

  • First board meeting for new Board member Anna Maria Farias of San Antonio. Ms. Farias brings a great deal of affordable housing experience to the governing board.
  • The Board passes a resolution in recognition of May 2022 being National Mobility Awareness Month & Community Action Month

 

EXECUTIVE DIRECTOR’S REPORT

Brooke Boston, Deputy Executive Director, will be presenting the report today

  • Homeowner assistance fund (HAF) is active – approved $22.3 million, serving 2100 households. Targeting lower income households – 68% approved are at 30% AMI or below, 22% approved under 80% AMI
  • Texas Rent Relief – received another $47.8 million in ERA Funds, that were reallocated from different entities. New funding will go to applicants that applied before. They have distributed $1.98 billion since the start of the program.
  • Upcoming weatherization funding can be used for multifamily
  • QAP roundtables and working groups are still happening and TDHCA hosted a compliance roundtable
  • TDHCA staff met Senate Finance staff to discuss budget for the next biennium
  • 12 empty vacancies in temporary and permanent positions

 

MULTIFAMILY FINANCE

CODY CAMPBELL; DIRECTOR OF MULTIFAMILY PROGRAMS

REFINING THE FORCE MAJEURE DEFINITION

Extending the placement in service deadline under the provisions of the force majeure rule (10 TAC §11.6(5), including the return and re-issuance of tax credits. Recycled credits do not take credits from the current round. 

Background

Four developments requested a second placed-in service extension under the force majeure provision. The first extension was granted in 2021. If approved by the board, the Development Owner would return the awarded credits and execution of a 2022 Carryover Allocation Agreement will result in a new award and a new placed-inservice deadline of December 31, 2024, for the Development, with a new 10% Test deadline of July 1, 2023.

Force Majeure events are the following sudden and unforeseen circumstances outside the control of the Development Owner: acts of God such as fire, tornado, flooding, significant and unusual rainfall or subfreezing temperatures, or loss of access to necessary water or utilities as a direct result of significant weather events; explosion; vandalism; orders or acts of military authority; unrelated party litigation; changes in law, rules, or regulations; national emergency or insurrection; riot; acts of terrorism; supplier failures; or materials or labor shortages. If a Force Majeure event is also a presidentially declared disaster, the Department may treat the matter under the applicable federal provisions. Force Majeure events must make construction activity impossible or materially impede its progress.

For supply chain disruptions, material shortages, or labor shortages to constitute Force Majeure, the Development Owner must clearly explain and document how such events could not have been reasonably foreseen and mitigated through appropriate planning and risk management.

Discussion highlights

  • Board believes that the definition of force majeure is subjective and broad. The force majeure is not statuary; it is in the QAP.
  • Board asked if TDHCA could provide a more clarified, tighter definition, especially about cost overruns. For example, what would the percentage cost increase need to be for it to constitute a force majeure? Mr. Campbell stated that they could insert new language into the 2023 QAP.
  • Board is concerned that more projects will ask for a 2nd Why are there projects that are almost done with construction, while other projects have not started construction? Why are these projects the outliers? They should look at them on a case-by-case basis
  • Board asked if there were colleges, universities, or other government entities that have guidelines for force majeure situations. Mr. Campbell responded that TDHCA would investigate.
  • Risks – Adding new rules could make the function less usable. Need to be cautious about increasing regulations.

  

The next TDHCA board meeting is on May 12, 2022.