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The TDHCA convened its board meeting at 10:03 am on June 15, 2023, at the Texas Capitol, Extension Hearing Room E2.030 1100 Congress Avenue Austin, TX 78701.

June 15 Meeting Summary

TAAHP Staff attended the board meeting and summarized its main takeaways.

Consent Agenda report approved.

AGENDA ITEM 13: Presentation, discussion, and possible action on the SFY 2024 Operating Budget

  • SFY 2024 Internal Operating Budget – 88th Texas Legislature appropriated $741,805,246. The budget provides for administrative expenditures and associated revenues of $103.6M, a 10.5% decrease from last year’s budget. The decrease is due to temporary federal funding. The board approved TDHCA’s 2024 Operating Budget.

Agenda Item 14: Approve the SFY 2024 Housing Finance Division Budget

  • The board approves the SY 2024 Housing Finance Division Budget is $23,897,114.

Multifamily Bonds – Teresa Morales, Director of Multifamily Bonds

Agenda Item 15: Rule waiver request related to mitigation for Development Sites located in the attendance zone of an elementary school with a 2022 TEA Accountability Rating of “Not Rated: Senate Bill 1365” for Santiago Estates.

  • The rule states that if the development is located within the attendance zone of a school with an accountability rating of “Non-Rated: Senate 1365” then it must provide an afterschool learning center with a minimum of 15 hours of educational-related services. The applicant asked for waiver because the new rule would add significant operating expenses to the proposed project that is already battling increased construction, interest and operating costs, and that the long-permitting process (18-24 months) happened before the rule was put in place.Staff recommended denial of the rule waiver request from Santiago Estates. The Board concurs and approves by a 4-1 vote the recommendation to deny the request.

Agenda Item 16: Request Bond inducement resolution and waiver request related to the percentage of one-bedroom units for Airport Commerce Multifamily Apartments. 

Approval of the inducement resolution is the first step in the application process for a multifamily bond issuance by the Department; and approval of the inducement will allow them to submit an application to the Bond Review Board. The number of one-bedroom units comprise approximately 42% of the total unit count. This is against the 2023 QAP Rule that the unit mix must be below 30% efficiency and/or one-bedroom units. The design of the project was in the planning process at least two years before the introduction of the ineligible unit mix to the 2023 QAP.

The board approved staff recommendation to approve the bond inducement resolution and waiver request from Airport Commerce Multifamily Apartments.

 

Asset Management – Rosalio Banuelos, Director of MF Asset Management

Agenda Item 18: Waiver request related to the ownership structure change change for Campanile on Minimax. 

This item was tabled from last month. The applicant received two points because the development included a historically underutilized business (HUB) as the general partner. They have revised their ownership structure, where the HUB becomes a Special Limited Partner and adds a new general partner that is owned by a nonprofit corporation formed by the Houston Housing Authority. A ground lease with the Houston Housing Authority will allow for the development to a receive a property tax exemption that is needed for feasibility purposes. The change in the ownership structure would result in the loss of 2 Sponsorship Characteristics points. However, even with the loss of the two points – the application would still have been funded. The Mayor of the city of Houston supports the development and urged the board of directors to continue to support the project.

The board approved staff recommendation to approve the rule waiver request and ownership structure change for Campanile on Minimax.

 

Compliance – Wendy Quackenbush, Director of Multifamily Compliance

Agenda Item 22: Presentation, discussion, and possible action on an order adopting amendments to 10 TAC Chapter 10, Subchapter F, §10.606 Construction Inspections; §10.613 Lease Requirements; §10.622 Special Rules Regarding Rents and Rent Limit Violations; §10.626 Liability; and §10.627 Temporary Suspension of Sections of this Subchapter; and directing that they will be published for adoption in the Texas Register

The amendment is a new notification requirement regarding rental increases. Originally, TDHCA had set 120 days as the time required to notify tenants of rent increases. After the roundtable in December, TDHCA changed the notice period to 75 days.

The board unanimously approves staff recommendation to publish in the Texas Register for final approval the compliance monitoring rules referenced in the item.

 

HOME-ARP – Naomi Cantu, Director of HOME American Rescue Plan

Agenda Item 23: Awards from the 2023-2 HOME American Rescue Plan Rental Notice of Funding Availability (NOFA)

The HOME-ARP Rental 2023 (NOFA) made available $51.7 million: $48.4 million for rental development and $3.3 million for operating costs and capacity building for eligible nonprofits. in development costs. TDHCA recommends approval of three awards. Staff will recommend approvals of other applications at a later date.

The board approves staff recommendation on the three HOME-ARP awards.

 

Multifamily Bond Finance – Cody Campbell & Colin Nickells

Agenda Item 24: Report on Third Party Requests for Administrative Deficiency (RFAD) 

Third Party Requests for Administrative Deficiency (RFAD) is submitted to the department by an unrelated person or entity that brings new, material information about an Application. The deadline for submission of RFADs was May 5, 2023, and 19 RFADs were submitted by this date, one of which has since withdrawn. About half of the RFADs submitted this round did not present new or material information and were thereby eliminated.

Agenda Item 25: Requests related to Force Majeure Events

The Department received 22 requests for return/reallocation of tax credits under TDHCA rules related to Credit Returns Resulting from Force Majeure Events for Applications previously awarded 9% housing tax credits. The Development Owners have communicated to staff that rising construction costs, labor shortages, supply chain issues, inflation and interest rate increases have impacted the construction timelines. Staff determined that this effective “extension” of the 10% Test deadline due to Force Majeure events was appropriate under these circumstances. If approved, the new placed in service deadline would be December 31, 2025 and a new 10% test deadline of July 1, 2024.

The board approved staff recommendation to affirm the requests.

Agenda Item 26: Appeal of the termination of Westwind of Amarillo (23137)

Staff terminated the Application on May 23, 2023, because it did not disclose that the Development Site is within the attendance zone of Bowie Sixth Grade Campus, which received a TEA Accountability Rating of “Not Rated: Senate Bill 1365” for 2022, and thus constitutes a Neighborhood Risk Factor.

The applicant timely filed an appeal of the termination stating that the failure to disclose was due to an omission of that school from the district’s school locator tool. The Amarillo ISD locator map excluded Bowie Sixth Grade Campus. The applicant notified the district and they have since fixed the omission and submitted a letter for this appeal. In public comment it was stressed that the development community uses these school district website tools as standard diligence.

The board granted the appeal from Westwind of Amarillo.

Agenda Item 27: Appeal of the termination of Pioneer Crossing (23152)

Staff terminated this application because the applicant did not disclose an Undesirable Site Feature. This undesirable feature is a Brownwood ISD Bus Barn that’s a registered aboveground storage tank facility near the development site.

However, the applicant argued that the aboveground storage tank are registered under the same regulatory chapter as gas stations, so therefore it should not constitute an Undesirable Site Feature. During public comment it was stressed that the bus barn is more closely related to the classification of a refueling facility

The board grants the appeal from Pioneer Crossing.

Agenda Item 28: Appeal of the termination of Casitas Palmettos (23203)

This applicant submitted their market analysis after the deadline – and requests that the late submission be treated as an Administrative Deficiency. Staff remains consistent in its position that the late submission of the Market Analysis should not be treated as an Administrative Deficiency and recommends that the appeal of the termination be denied.

The board denied the appeal for termination of Casitas Palmettos.

Agenda Item 29: Multifamily Direct Loan Funds awards

Staff is recommending approval of five national housing trust fund awards totaling $18.8 million and one HOME award of $6.1 million.

The board approves staff recommendation.

Agenda Item 32: Issue a list of approved Applications for 2023 Housing Tax Credits (HTC)

Ninety-two competitive (9%) HTC applications were submitted prior to the application deadline of March 1, 2023. Five applications have been withdrawn, terminated, or not recommended for award as of June 6, 2023.

Board approves staff recommendation on the list of approved applications to be considered for 2023 9% HTC awards. This is not a list of awards. That will be announced at the meeting on July 27, 2023.

Meeting adjourned at 2:26 pm

The next TDHCA board meeting is on July 6, 2023.