On Thursday, City Council will consider resolutions of support for seven affordable housing developments seeking funding through the state’s 9 percent Low-Income Housing Tax Credit (LIHTC) program. If approved, items 16-22 on the agenda will be included in developers’ applications to the Texas Department of Housing and Community Affairs, which oversees the competitive program that helps finance affordable housing projects.
The proposed developments include a mix of new construction, rehabilitation and redevelopment, targeting general, elderly and supportive housing populations. They total 660 units, ranging in size from 38 to 130 units, and are located across the city, with two – Eberhart Place and St. George’s Court – falling under the At-Risk Set-Aside category, a designation made to preserve existing affordable housing stock.
A recent memo from Mandy DeMayo, interim director of the Housing Department, details the process that will see the Austin applicants compete for funding in Region 7, which includes Travis and surrounding counties. According to the state’s pre-application log, $5.99 million in 9 percent tax credits is available for Region 7, which would generate $60 million in equity – enough to support two to three developments.
An additional $13.7 million is available in the At-Risk Set-Aside, which is allocated statewide. City staff believes funding is likely available for at least one or both of the At-Risk projects, along with other local applications.
The LIHTC program provides a significant source of affordable housing financing by allowing developers to sell awarded tax credits to private investors, generating approximately 70 percent of the funding needed for a project. In return, developers commit to long-term affordability requirements, typically for 45 years. It is estimated the $5.9 million available in the region will generate $60 million in equity via the sale into the private market.
Council’s possible resolution of support can add up to 17 points to the competitive process, while waived development fees under the city’s SMART Housing program contribute an additional point. Housing staff use additional criteria to determine whether to recommend support, prioritizing projects located near transit, in high-opportunity or displacement-risk areas or those with commitments to supportive housing or family-friendly units. Each of the seven projects under consideration meets at least two of these criteria.
The memo notes that the approval of a resolution does not constitute a commitment of city funding. Some applicants plan to apply separately for Rental Housing Development Assistance gap financing, which will go through a separate review process.
In addition to the seven 9 percent LIHTC projects, Council will also consider a resolution supporting Manor Apartments, which is applying for 4 percent LIHTCs. Unlike the competitive 9 percent program, 4 percent tax credits are awarded noncompetitively to projects that use tax-exempt bonds. The distinction in uses for the different tax credit programs was discussed recently during a meeting of Council’s Public Health Committee, regarding the need for funding to move forward with developments that will include permanent supportive housing units.
Final LIHTC awards will be determined later this year by the state agency, with Austin’s resolutions of support playing a key role in applicants’ competitiveness.
Also related to affordable housing development, the Housing Department recently announced the success of the Housing Accelerator Loan Fund, managed by the Austin Community Foundation. The fund provides low-interest, short-term loans to affordable housing developers for needs such as pre-development, land acquisition and bridge financing.
As of early February, the fund has disbursed eight loans totaling over $13.5 million, supporting the creation of more than 1,000 new affordable housing units in the Austin area. The Austin Housing Finance Corporation contributed a $5 million loan to the fund in 2024, bringing its total to $16.4 million.
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affordable housing: This general term refers to housing that is affordable to Austinites, with or without subsidy.
Austin Housing Finance Corporation: A city tool to create housing for low- to moderate-income families in Austin. The Board of Directors is made up of the entire City Council.
