What should Oklahoma’s housing priorities be? Why? Should particular populations or locations be served? Should there be a bedroom size priority? Should consideration be given to workforce housing? Let your voice be heard now.
I attended the state’s (Oklahoma) public comment session on the draft application for the low-income housing tax credits. About 40 people attended representing developers, consultants, attorneys, and agency staff.
The Oklahoma Housing Finance Agency sought written and verbal comments from interested parties about a month ago. OHFA assembled comments and provided written responses to the Pre-Application on August 15th. Be sure to check these out!
At the meeting, OHFA provided a “Summary of Major Changes to the 2015 Tax Credit Application.” This document outlined 10 items. From my perspective, most of those in attendance supported some of the changes. However, there were a couple of items that had lengthy discussion: overhauling the set-asides and enactment of the new State Housing Tax Credit HB 2128, Oklahoma Affordable Housing Act.
OHFA proposes
- Overhauling the set-asides from six to four {new construction, acquisition/ rehabilitation, and nonprofit}. While several others and I believed this was a positive change, a few did not. The positive benefits of the change make sure that the State preserves and increases the number of housing units. Proponents of keeping the old set asides, felt the change would negatively affect rural areas. In response, it was pointed out if the new set asides do not work the State could always change next year. Also, the new State Housing Tax Credit helps counter that concern since HB 2128 specifically limits investment to counties with populations of less than 150,000 (all counties except for Cleveland, Oklahoma and Tulsa) and requires this credit equal the federal low-income housing tax credit not to exceed $4,000,000.
- Awarding newly enacted State Housing Tax Credits by lottery. There was a lot of opposition to awarding credits by lottery. Suggested alternatives included awarding credits using the same criteria choice for the federal housing tax credit. Additionally, OHFA received input to reconsider the plan B financing option limiting the federal tax credits to the same amount as when applying for state credits. General group comments was to allow investment of more federal tax credits if state credits are not awarded. Although the Act requires OHFA to promulgate rules, agency staff felt they had authority to move forward without the rules in place based on their current administrative rules. This lead to discussion of OHFA’s authority to split the award of state housing tax credits into two cycles since the Act states equal to federal and OHFA awards about $4 million in each cycle.
My general observation:
1) OHFA’s responses to the pre-application comments are helpful. It was interesting to know that decisions are based on “staff thinks”. There was no reference to studies, best practices, or research.
2) In 2014 OHFA changed underwriting to a floating rate and lowered the 130% boost to 120% which caused developers to have to defer their fees to make the project financially viable for an award. Is this our State’s expectation that developers defer their income to make sure Oklahoma provides affordable decent housing to low and moderate income households? In January the floating rate was 7.53% for 9% Credit Applications and 3.23% for 4% Credit Applications. For July 2014 Applications Staff will underwrite at 7.60% for 9% Credit Applications and 3.26% for 4% Credit Applications.
3) The State Housing Tax Credit Act is up for interpretation and there does not appear to be an effort to ask the authors of the bill what they intended. Go figure.
Finally for all you advocates out there reading this and wondering what you can do to help your clients, I recommend reading the Advocates Guide, Qualified Allocation Plan from the National Low Income Housing Coalition, a brief guide on the low income housing tax credit and tips for local success.
OHFA will accept written comments through August 22. Contact Pam Miller at 405-419-8134 or email [email protected]. The 2nd draft will be on OHFA’s website approximately by Thursday, August 28. The second input session for the 2015 Tax Credit Application will be at 10:00 on Wednesday, September 3, at OHFA’s offices