SEATTLE—Developers who face NIMBY opposition will get some support under a new policy from the Washington State Housing Finance Commission.

The policy enables the commission to give discretionary priority to projects that were allocated low-income housing tax credits (LIHTCs) but were forced to return the credits and reapply due to NIMBY-related delays.

"In more than one instance over the past five years, the commission has experienced situations where neighborhood opposition groups have initiated multiple actions, causing delays and threatening tax credit projects from proceeding," said a report on the 2008 program changes. "Specific instances have included projects serving the homeless and a project serving farmworkers."

Delays are particularly punishing for LIHTC developments, which must be completed within certain timelines.

The proposal is not intended to inhibit the rights or due process of neighborhood groups, said the commission.

However, it does send a message that delay tactics alone will not prevent tax credit developments from moving forward. "We’re going to stand by these projects and give them every opportunity to go forward," said Steve Walker, director of the tax credit division.

Under the policy, the commission can allow developers under certain circumstances to reapply for their credits with top priority.

In another move, the commission is eliminating allocation points for "project readiness." Instead, projects with all funding in place will receive priority.

In the special-needs set-aside, the number of available points has increased for housing for the homeless and farmworkers, two populations that have been a focus for the state. Walker said this move is aimed at both simplifying the allocation process and creating long-term project viability by reducing an overcommitment to serve multiple special-needs populations.

It will allow project sponsors to focus on their mission rather than chasing points to get an allocation of credits, which can take them away from their mission.

A temporary set-aside for HOPE VI projects will remain in place in 2008. This set-aside receives 20 percent of the annual authority and replaces the set-asides for nonprofit organizations and for-profit entities. The set-aside for projects sponsored by qualified nonprofit organizations remains at 10 percent.

Beginning in 2009, the commission will require LIHTC projects to meet the state’s Evergreen Sustainable Development Standard as a minimum threshold requirement.

The commission passed the policy this year to give developers plenty of time to prepare and integrate the necessary elements into their projects, according to Walker, who noted that the state’s affordable housing developers already have a good track record of building green projects.

Washington will have about $12.7 million in LIHTCs in 2008. Like several other states, Washington reported seeing an increase in the number of rehab and preservation requests.

2007 recap

In 2007, the commission reserved about $13 million in LIHTCs to 26 projects. About $9 million went toward new construction and nearly $4 million went to acquisition-rehab projects. Washington also achieved deep income targeting, with about 36 percent of the units serving residents earning no more than 30 percent of the area median income (AMI). Walker said one reason for this is a big effort in the state to house the homeless.

Public housing authorities received 39 percent of the reservations; nonprofits, 33 percent; and for-profits, 28 percent.

Tax-exempt bonds

The state will have roughly $550 million in overall tax-exempt privateactivity bond cap in 2008. About $106 million is estimated to be set aside for rental housing and $70 million for homeownership mortgage revenue bonds.

Multifamily projects must meet the minimum threshold and readiness requirements, reported the commission. Projects will be ranked first by three priority categories—government rental subsidies, leveraging, and targeted areas—for which the projects qualify, and then by the number of optional points they achieve. Optional point categories include taxable bond options, project-based government rental subsidies, extended regulatory agreements, and having an additional 30 percent of the units at 50 percent of the AMI. Each project must score a minimum of 30 optional points.

The priority categories were created due to the high level of competition for the limited bond cap that is available each year. So far, the commission has had enough bond cap to finance all the projects that have applied within the past year. However, officials expect to see strong demand going forward, and there may be $100 million less for multifamily housing in 2008.

Twenty-nine multifamily projects were slated to receive approximately $310 million in bond financing in 2007.


  • 2008 LIHTC authority (est.): $12.7 million
  • Application deadlines: January 2008
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