SACRAMENTO, CALIF.?The California Tax Credit Allocation Committee (TCAC) has received 118 applications in its first funding round, a 15 percent jump from a year ago.
Based upon self-scoring, approximately 50 to 54 projects are likely to receive low-income housing tax credits (LIHTCs), estimated Executive Director Bill Pavao.
First-round projects are scheduled to go before the committee on June 20. The state holds two funding rounds each year.
In 2011, there were a total of 175 applications, with 105 receiving reservations, said Pavao during a program update at the Housing California conference in Sacramento. About $83.6 million in federal credits and $86.9 million in state credits were awarded.
The average federal credit award was $796,000, a big drop from $1.07 million in 2010.
The average cost per unit was $285,008 in 2011, a nearly 8 percent drop from the year before. A big decline was also seen in the federal credits per unit, which was $138,870 last year, a 27.7 percent drop from 2010.
The cost of affordable housing projects is coming under increased scrutiny in California, Maine, and other states. In California, TCAC and the other state housing agencies are teaming to sponsor an in-depth study this year to see if development costs have gotten out of hand and to understand what drives the various cost components.
In the meantime, TCAC officials have added a high-cost test for tax credit projects. Developments with eligible basis exceeding 130 percent of adjusted threshold basis limits will not be considered for competitive credits unless a developer successfully appeals to the committee.
If the test had been applied in 2011, 13 projects would have hit the tripwire, according to Pavao.
In comparison, no applicants in this year’s first round reached the 130 percent limit, although several came very, very close. Developers were likely being extremely careful to avoid going before the committee to appeal.
It is clear that costs will continue to be an area of focus for TCAC. Officials will also continue to monitor a recent trend of more rehabilitation projects and fewer new construction deals receiving credits.