(AUSTIN) — The Texas Department of Housing and Community Affairs (TDHCA) has awarded $1.2 million in housing tax credits to a nonprofit developer constructing the 140-unit Homestead Apartments, a planned rental property in south Austin that will offer units with reduced rents.

The award, made through the state housing agency’s Housing Tax Credit Program, will help Foundation Communities finance 126 units which will be set aside for individuals and families earning no more than 60 percent of the area median family income. For Austin, this equals an annual income of $43,920 for a four-person household.

Because the state’s future population growth is expected to be the greatest at both ends of the age spectrum, an ample stock of affordable housing is critical to keeping the Texas economy healthy and vibrant, according to TDHCA Executive Director Tim Irvine. 

“The Housing Tax Credit Program plays a critical role in TDHCA’s mission to offer housing options for Texans of all income levels,” Irvine said. “Whether it is a young working family just starting out in life or a senior citizen living on a fixed income, thousands of Texans are in need of a safe, decent home that fits their limited budget. The Homestead Apartments will represent an important step toward filling that need.”

Besides bringing greater stability to low income individuals and families, he noted the program’s economic multiplier effect ensures that the entire city will benefit from today’s award.

“When you combine the jobs, payroll funds and sales tax revenue these properties generate,” he explained, “TDHCA anticipates that this allocation of housing tax credits could generate as much as $11 million for the Austin economy and $1.1 million in taxes and fees for both city and state coffers.”

The federal Housing Tax Credit Program is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers and their investment partners use the credits to offset their federal tax liability on a dollar-for-dollar basis in exchange for the construction or rehabilitation of rental units offering a reduced rent.