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Credits to help finance construction or rehabilitation of 64 affordable housing developments; allocation could have estimated $932.8 million impact on state

(AUSTIN) — Texas Department of Housing and Community Affairs (“TDHCA”) has announced statewide funding awards through the 2016 Housing Tax Credit Program allocation that will help finance the development of high quality rental properties offering reduced rents and increased housing options.

TDHCA will provide $65.3 million in housing tax credits to private developers constructing or rehabilitating 64 properties across the state that will offer rents affordable to households earning up to 60 percent of the area median family income. The credits are expected to help finance approximately 5,000 affordable units across the state.

“We have a vibrant economy of which high quality affordable housing is an important piece. Yet rents in Texas continue to increase beyond what many household budgets can afford and still allow for other necessities,” said TDHCA Executive Director Tim Irvine. “The credits allocated today are helping the state accommodate a young and rapidly expanding workforce while also meeting the housing needs of older residents living on fixed incomes, two populations that might otherwise have little to no choice in where they live.”

Citing data from the U.S. Department of Housing and Urban Development, Irvine noted that an estimated 1.2 million renters in Texas pay more than 30 percent of their income on housing costs, a spending level generally considered to exceed the threshold for housing affordability.

The Housing Tax Credit Program, authorized under the Internal Revenue Code, is the state’s primary means of directing private capital toward the development of affordable rental housing. Investors purchase credits allocated to developers which they may apply toward their federal tax liability each year for ten years on a dollar-for-dollar basis in exchange for their investment in the property.

Developers use proceeds from the sale as financing for their property. The credits announced today are designed to cover approximately 70 percent of each property’s eligible development costs.

According to Irvine, the credits will not only expand housing options for low-income individuals and families, the combined construction payroll salaries, local purchases, and taxes and fees the program generates could have as much as a $932.8 million impact on the Texas economy.