LEGISLATIVE ACTION ITEM
SPONSOR: D.C. Reeves, Mayor
SUBJECT:
title
LOCAL GOVERNMENT AREA OF OPPORTUNITY SUPPORT FOR 9% HOUSING TAX CREDIT APPLICATION
end
RECOMMENDATION:
recommendation
That City Council authorize funding in the amount of $460,000 to support a Local Government Area of Opportunity application for Kupfrian Manor for Florida Housing Finance Corporation’s RFA 2023-201 Housing Credit Financing for Affordable Housing Developments located in Medium and Small Counties. Further, that City Council authorize the Mayor to sign the Local Government Verification of Contribution Form as required by the Florida Housing Finance Corporation.
end
body
HEARING REQUIRED: No Hearing Required
SUMMARY:
A priority recommendation made to the City in 2020 as part of the Final Report presented by the City’s Affordable Housing Task Force was for the City to support tax credit development applications as a means of producing affordable rental developments. The Task Force was convened to provide support and create objectives related to the City’s goal of 500 Homes in 5 years. Support of an affordable multi-family rental development also supports multiple Housing goals as outlined in the City’s current Comprehensive Plan. City Council approved $2,000,000 for affordable housing programs and services using Coronavirus State and Local Fiscal Recovery funds under the American Rescue Plan Act (ARPA) in a special workshop in June 2021, which included incentives for affordable housing development.
Florida Housing Finance Corporation (FHFC), the agency in Florida that oversees the low income housing tax credit (LIHTC) application process, released RFA 2023-201 Housing Credit Financing for Affordable Housing Developments Located in Small and Medium Counties on July 7, 2023, which provides the 9% competitive housing tax credits. For this year’s annual RFA, the state established the following funding priorities:
• Six Local Government Area of Opportunity applications (two with local government support from 2021 or earlier; two with local government support from 2022 or earlier; and two additional applications with local government support regardless of year)
• One SunRail application
• Three Family developments that are located in a HUD defined “Geographic Area of Opportunity” OR “Small Area Difficult to Develop Areas” (no SADDA areas are located in Escambia County)
The Local Government Area of Opportunity (LGAO) preference requires a local government to select one development for support and provide a minimum funding amount based on County size. The minimum funding commitment under this year’s RFA for a development located in Escambia County is $460,000. The Housing Department issued a request for applications from developers interested in submitting an application to FHFC under RFA 2023-201 in order to select a LGAO application that can be competitive for funding in the City limits. Applicants had to submit a proposal for a 9% housing tax credit within the City limits that would also meet ARPA grant requirements.
The only proposal received by the deadline was from Paces Preservation Partners, LLC (Paces), a partnership between The Paces Foundation, Inc. and Soho Housing Partners, LLC, to develop a 94-unit senior multi-family development at the southeast corner of H and Avery Streets, to be called Kupfrian Manor. The proposal demonstrated developer experience and capacity, site control, zoning/land use compliance, a 50 year minimum commitment to affordability commitments, and ability to proceed.
Since the City CRA supported this development last year as a LGAO, this proposal has a higher chance of receiving a LIHTC allocation from FHFC. Because of the competitive nature of the FHFC 9% housing tax credit RFA process, there is no guarantee that funding will be received from the State. Applications are due to FHFC September 12, 2023. FHFC Board approval of development applications is tentatively scheduled for late October 2023. Should Kupfrian Manor be selected for award by the State, an agreement will come back to the City Council for approval to formally obligate funds and outline developer commitments. This rental development will comply with all City planning and zoning requirements. Properties awarded LIHTC funding are routinely monitored by FHFC for set asides, rents, and other property conditions as outlined in the RFA.
Kupfrian Manor will consist of 47-1 bedroom/1 bath units and 47-2 bedroom/2 bath units to be located over ground floor retail and amenities space. Paces is committing to unit affordability for 50 years. All of the units will be targeted to households at or below 80% area median income (AMI) to meet both IRS, FHFC, and ARPA requirements. 15 units will be set aside for residents at or below 30% AMI; 59 units at or below 60% AMI; and 20 units at or below 80% AMI (for reference, the current maximum annual income limits for a one-person household at 30% AMI may not exceed $17,190; 60% AMI may not exceed $34,380; and 80% AMI may not exceed $45,850). Additionally, 8 of the 30% AMI units will be set aside for special needs households. Based on unit set asides, the one-bedroom rents are expected to range from $344-$1112/month and two-bedroom rents are expected to range from $404-$1326/month. The following programs will be available to Kupfrian Manor residents at no additional cost: 24 Hour Support to assist residents in handling urgent issues, adult literacy, daily activities, and computer training.
PRIOR ACTION:
June 30, 2021-City Council workshop for ARPA Housing funds
December 12, 2022-CRA approved designation of Kupfrian Manor as a LGAO under RFA 2022-201 with $460,000 in CRA funds
FUNDING:
Budget: $ 460,000
Actual: $ 460,000
FINANCIAL IMPACT:
No City general funds are required. The $460,000.00 contribution will be funded from Housing ARPA funds. No funds will be provided to the developer unless the proposed development is awarded funding from FHFC under RFA 2023-201.
The statewide housing tax credit application process through FHFC is extremely competitive, so there is no guarantee of this project being funded by the state. Should this project be awarded a 9% tax credit, an agreement will come back to Council outlining developer responsibilities in accordance with the RFP and ARPA requirements.
LEGAL REVIEW ONLY BY CITY ATTORNEY: Yes
8/1/2023
STAFF CONTACT:
Kerrith Fiddler, City Administrator
David Forte, Deputy City Administrator
Marcie Whitaker, Housing Director
ATTACHMENTS:
1) Local Government Verification of Contribution Loan Form
2) Proposed Site Map-Kupfrian Manor
3) Paces Application for Local Government Area of Opportunity
PRESENTATION: No end