A total of 91 proposed affordable housing projects are hoping to win 9% federal tax credits in California according to second round data from the California Tax Credit Allocation Committee (TCAC). In September, TCAC will announce the selected projects to receive financing from the largest source of affordable housing subsidies available in California.
Awards are typically provided based on tiebreaker scoring and allocations to certain targeted categories (or “buckets”), including rural and at-risk projects. A senior project in the city of San Diego had the highest tiebreaker score at 76.166%. A senior project in the city of Placerville had the lowest tiebreaker score at 4.978%. This project competes in the rural bucket. The average score for the rural bucket is 25.175%. The rural set-aside has the lowest average score of all set-asides. The at-risk set-aside has the highest tiebreaker score at 60.300%.
Projects that do not win tax credits in set-aside buckets compete in geographic buckets. Of all geographic buckets, the South and West Bay Region was the most competitive. The average score in this bucket is 68.412%. The city of Los Angeles is the geographic bucket with the lowest score at 38.265%. This round the San Francisco County region had only one submission, despite being an area with great demand for affordable housing. On the other hand, the Central Valley Region had ten applications (the most of geographic buckets).
The largest development that was submitted is 180-units, and the smallest was 10-units. Seventy-six of the projects are new construction, and 12 are acquisition rehab. Most applications are spread throughout the geographic regions. However, several cities had more developments than others Los Angeles had 5 submissions, 4 in San Diego, and 3 in Santa Ana.
Although 91 projects submitted for tax credits this round, only a small portion will be funded this year. This does not seem like a lot given the serious need for housing and California’s significant low-income population. Hopefully, we will have greater success with State and Federal Legislatures doing more to provide subsidies and other incentives to build additional units.
Written by Greg Smith, a Senior Associate at RSG, Inc.