Houston staff recommend 14 multifamily tax-credit projects; waivers and district limits part of package

Houston housing staff presented recommendations Feb. 4 for which multifamily projects the city should endorse for 9% low-income housing tax credit points, telling a special Housing and Affordability call that 14 of 22 applications are being recommended and that several administrative waivers will be requested to make some projects eligible for TDHCA scoring.

The committee chair (meeting chair) said the meeting represented an early, strategic step: "this is the Super Bowl of tax credits," and city staff described the recommendations as the first stage in a longer process to secure private equity for affordable housing construction.

City Housing and Community Development Department Director Mike Nichols told the committee the agenda was about the long view of affordable housing and emphasized the target population for many projects: people at or below 50% of area median income. Derek Sellers, a department presenter, clarified that "these are not funded by the city. We are just a player in the process," explaining that the Treasury allocates credits to states, and TDHCA awards points under a Qualified Allocation Plan.

Why it matters: TDHCA awards up to 17 local points for municipal resolutions of support that can determine whether a competitive 9% tax-credit deal receives funding. City staff said municipal points are a significant part of the scoring mix and can be decisive for projects that are otherwise competitive.

Key items from staff presentation

- Applications and recommendations: staff received 22 applications and recommended 14 projects to receive the city's resolution of support. Staff said the recommended package includes both projects inside Houston and projects in the extraterritorial jurisdiction (ETJ).

- District caps and equitable dispersion: staff outlined an "equitable dispersion" policy to limit concentration: generally recommending only two endorsements per council district, with a mechanism to allow a third in some cases; rehabilitation projects and permanent supportive housing are exempt from the per-district cap.

- Scoring basics: the department described the city's contribution as worth up to 17 points in TDHCA's scoring. The city's internal ACD scoring criteria have a 10-point minimum and a maximum of 23 points. Staff said resiliency features (including emergency generators and storm-hardening measures), transit proximity, rehabilitation, supportive housing, and educational programming are priorities in scoring.

- Waivers and other determinations: staff said they will request waivers under TDHCA rules where projects fall within restricted proximity/time windows (a 2-mile same-year waiver and a 1-mile/3-year waiver) and will also seek a waiver for projects located in areas with poverty rates above 40% when the project is in a targeted zone (examples cited included Hillcroft and Ashmore F and J). Staff emphasized these waivers are required under the QAP to allow some projects to move forward.

- Timeline: staff noted an aggressive timeline driven by TDHCA. Pre-applications were due to TDHCA on Jan. 9, the city's application round followed immediately, and staff planned to bring the recommended package to the City Council agenda on Feb. 12 so the city can meet TDHCA filing deadlines. Staff said awards by TDHCA are announced later in the year.

Questions and concerns from council members

Vice Mayor Pro Tem Tiffany D. Peck (Vice Mayor Pro Tem) thanked staff for adding resiliency and rehabilitation to the scoring and asked about how projects in limited-purpose areas were being treated; staff said they would verify whether a project in Kingfield Trails sits in a limited-purpose annexation (LPA) or the ETJ and confirm whether it should be treated as in-city or ETJ for the purposes of requiring dual resolutions.

Councilmember (unnamed) asked about geographic gaps: several council members noted there were no applications in Council Districts C, E, G and H in this round and questioned whether the city's process, state scoring incentives, or public commentary about affordable housing deter developers from submitting proposals in some districts. Staff said they will study barriers and consider additional tools (including a potential summer NOFA focused on rehabilitation only) to increase proposals in underrepresented districts.

Resiliency and rehabilitation

Councilmember (unnamed) asked whether resiliency points required generators and whether other measures such as green stormwater infrastructure (GSI) or LEED-style measures were included. Staff said emergency generators that power elevators and common areas are a scoring path; other resiliency features such as energy-efficiency windows and detention/parking reservoirs also qualify for resiliency points.

Public comment and project highlights

Three members of the public spoke in favor of specific projects. Nathan Kelly said he was representing Harkwood at Windstone Development (Katy ISD, ETJ) and noted the developer had applied to Harris County for a supporting resolution. Pastor Rudy Rasmus and Abel Green spoke in support of Trinity East Senior, a project led by Trinity East Village CDC; Abel Green described the project as having broad community support in the Third Ward and noted additional points tied to a HUD implementation grant that could strengthen the application's score.

Withdrawals and changes

Staff informed the committee that Senior Homes at Ella withdrew its application shortly before the meeting; staff said some adjustments to the recommended list are likely due to developer changes or withdrawals and promised to update council offices and post any changes after the meeting.

Direction to staff

Staff said they will post an updated list after the meeting, verify boundary questions (for example, whether Kingfield Trails is in an LPA or the ETJ), notify council offices if recommended projects move or withdraw, and facilitate responses to information requests from council offices within 72 hours. The chair urged developers and community groups to consult with council offices and neighborhood groups before the council hearing.

What the committee did not do

No formal vote or council action was taken during the Feb. 4 special call. Staff presented recommendations and signaled intent to bring a package of actions to the City Council agenda on Feb. 12 that will include the set of recommended projects and requests for the 2-mile same-year waiver, the 1-mile/3-year waiver, and the poverty-rate waiver. Final outcomes will depend on subsequent council action and TDHCA award decisions.

Next steps

Staff will send updates to council offices, post any changes to the recommended list, and proceed with the Feb. 12 agenda item in hopes of meeting the state's filing timeline. TDHCA's award decisions are made later in the year and will determine which projects receive credit allocations and private equity to proceed.