Sacramento — The California Tax Credit Allocation Committee (CTCAC) clarified a couple of points that could make or break a low-income housing tax credit application in its 2006 qualified allocation plan.
First, CTCAC officials made sure that it is clear how tiebreakers are employed. Preference is given to projects that meet an undersubscribed need in the state. Then, CTCAC will consider if a project is located in a qualified census tract or another kind of specially designated community redevelopment zone. The final tiebreaker is whether a project has the lowest ratio of requested, unadjusted eligible basis to total residential costs.
The committee also clarified the order in which it will award projects under the rural set-aside, which receives 20% of the federal credit ceiling. Tax credit awards are first given to Rural Housing Service-funded projects.
CTCAC expects to award $68.8 million in federal tax credits and $74.7 million in state tax credits in 2006. It received 58 applications in the first round requesting approximately $60.1 million in federal tax credits. However, only six projects requested state tax credits – in total asking for $17.8 million.
Four projects requested $2.1 million in the 4% tax credits that come along with tax-exempt bonds. These projects also applied for $7.3 million in state tax credits.
This demand for tax credits comes at a time when Southern California apartment rents and occupancy rates have risen to be among the highest nationwide, according to the Casden Real Estate Economics Forecast released by the University of Southern California Lusk Center for Real Estate.
Almost 97% of apartments in Los Angeles, Orange, Riverside and San Bernardino counties are currently rented. Rent increases of 6% to 7% are expected this year in Los Angeles, where the average rent was $1,416 in 2005.
“The recent run-up in home prices makes apartment living more desirable,” said Delores Conway, director of the Casden Forecast. “And the tight supply of land coupled with more condo conversions means fewer available units.”
Montana awards three CDBGs
Helena, Mont. — The Montana Department of Commerce awarded $1.5 million in federal community development block grants (CDBG) to fund three projects in the state.
Meagher County received $500,000 to build the 30-unit Castle Mountain Apartments, a seniors housing project owned and managed by the Meagher County Senior Center.
Miles City will use a $500,000 CDBG grant to rehabilitate Old Holy Rosary Hospital, which was built in 1910. The 21-unit project will be the first affordable housing development built in the city in more than 30 years.
Shelby County received $480,000 for an unnamed housing and community renewal project. This project, with the help of Neighborhood Housing Services in Great Falls, Mont., will demolish vacant, dilapidated buildings and replace them with 12 new affordable single-family homes. The plan also includes homebuyer assistance for families to purchase one of these new homes or an existing home.
Oregon doubles IDA tax credits
Salem, Ore. — Oregon Housing and Community Services (OHCS) has doubled its state Individual Development Account tax credits to $3 million.
The Neighborhood Partnership Fund, a nonprofit, receives and manages the funds, which can be used for first-time homeownership and community redevelopment. Contributors receive a 75% credit against their state income tax liability.
In other news, OHCS Chief Financial Officer Rick Crager replaced Bob Repine as acting director. Repine resigned to join the Oregon Economic and Community Development Department as its new director.