VA’s Preliminary Response on FC Affordable Housing — Sorry, No Tax Credits

According to preliminary information released late Tuesday by the Virginia Housing Development Authority, Falls Church’s proposed affordable housing projects do not have a sufficient “tax credit score” to receive low income housing tax credits, the primary subsidy used to build low-income housing in the United States.

In an email to housing and municipal officials around the state, VHDA Tax Credit Allocation Specialist Debbie L. Griner provided a table showing the winners and losers of of the credits.  Falls Church’s proposals narrowly missed the cut off.

According to Griner’s message, proponents will have through July 21 to comment on their scores  –  presumably to make the case for higher scores.  It is unknown at this time whether the Falls Church Housing Corporation, the City’s affordable housing organization, will attempt to raise its scores.

The low-income housing tax credit is provided by the federal government but allocated to and administered by state housing agencies.  Each state housing agency determines which proposals within its borders merit the subsidy based on a competitive process.  The tax credits are awarded to low-income housing builders, with competition for the credits providing an incentive for high quality and low price.

Falls Church’s City Center South Apartment proposal has experienced recent turbulence.  Last year, the Falls Church Planning Commission rejected the project’s site plan due to inadequate parking, a decision prompting significant public criticism of the Planning Commission.  At the end of 2008, the City Council appointed a number of new members to the Planning Commission amid speculation that the new members would consider the site plan favorably.

Before such a reversal could occur, however, the Housing Corporation announced that it was pulling its original proposal in favor of a scaled-back version involving fewer square feet and lower structural height.  The organization had decided not to purchase one property previously planned to include, even though it had received a $2 million short term loan from the City to help buy the property and already re-loaned the money to the property owner.  (See ASK THE TIMES:  Where’s the (Taxpayers’) $2 Million.)

The revised proposal split the effort into two separate projects, one for seniors and one for families.  Although the senior project scored slightly higher in the tax credit competition than the families project, neither score was sufficiently high to obtain the subsidy.

FCHC Executive Director Carol Jackson provided the following written comment.

“The preliminary rankings were issued at 5:20 last evening and I have barely studied them in detail for all their potential meaning.  I will be at a meeting most of today where most of the NOVA housing leaders will be present and there will be buzz, but no actual conclusions about any permanent results because it’s too soon to say in final.  I am scheduled to discuss next steps with our TCB partners later today.  Our score held up under VHDA review while several were adjusted down.  That is positive and means we did all we could do to position CCSA for funding.  Ultimately, the 2 deals that now appear to be getting full funding were heavily subsidized–Arlington County Bd voted in April to rescue The Jordan (old Bob Peck Chevy on Glebe Rd ) from low score purgatory by infusing another $6 mil of outright subsidy to help improve AHC’s pro forma and prevent the project from needing any stimulus $$ which formulated a loss of points IF T-CAP $$ were requested on an app.  FCHC knew better than to go back to our City Council for any additional funds.  We had heard their fiscal mandate loud and clear last December.  Our projects had no choice but to request stimulus credits and as a result we lost 40 points from an earlier score we had been expecting to submit until VHDA adjusted the stimulus funds scoring section at the last minute prior to May 15 deadline.”

No comment has been received as yet from City officials.

The preliminary rankings appear below.   (Use zoom function to adjust character size.)
VIRGINIA 2009 LOW INCOME HOUSING TAX CREDIT PROGRAM: PRELIMINARY RANKINGS