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County staff review LIHTC project capital stacks, describe common obstacles for developers
Summary
Staff presented an overview of low-income housing tax-credit (LIHTC) projects that have closed in Buncombe County, explained recurring developer challenges (experience, competitive caps, deadlines, costs, insurance and braided funding), and summarized how county housing funds have typically contributed to recent projects.
Buncombe County staff on Oct. 8 summarized common challenges developers face when building projects that rely on low-income housing tax credits and reviewed recent capital stacks for county-funded projects.
Staff said recurring barriers include: the program's preference for experienced tax-credit developers; the competitive nature and volume caps affecting 9% credits; timing and deadline pressure once awards are made; complex layers of underwriting and investor requirements; rising hard costs and insurance; and the need to braid federal, state and local funds to make deals feasible.
Staff also presented a comparison of recent projects the county supported. For 4% projects, tax-credit equity historically covered roughly 30% to 40% of total costs; county affordable-housing-service-program investments have typically represented under 20% of total development costs. Examples cited included Laurelwood (county support ~3% of project cost), Maribel (~15%) and Lakeshore Village (~9%). Among the 9% projects discussed, tax-credit equity made up a larger share of costs (closer to 70% by design), and county support in closed projects was in the 5% to 7% range (Starpoint, Fairhaven Summit, Jasper Apartments).
Staff identified local funding sources that have paired with tax-credit projects, including the City of Asheville housing trust fund, HOME Consortium funds (federally sourced HOME program dollars), the Dogwood Health Trust and, in other contexts, Western Carolina Housing Loan Fund and self-help program loans.
Members discussed clarifying the "other local funds" category (seller notes, developer-specific financing) and suggested future charts separate Dogwood Health Trust investments for clarity. Staff said they will adapt future materials to disaggregate sources and include pipeline projects where possible.
