By Moses Leos III.
Multifamily affordable housing units could be on their way to Buda. However, with concerns brewing, the city council seeks more information from three interested developers.
On Jan. 21, Piscerne and AmTex Housing presented information regarding the Low Income Housing Tax Credit (LIHTC) Program.
A third group, Catayno Real Estate, recently spoke to staff after reaching out to State Representative Jason Isaac (R-Dripping Springs).
Should any of the projects come to fruition, they would become only the second non-age-restricted affordable housing unit in Buda.
According to Chance Sparks, director of planning in Buda, the developers initially approached the city in mid-November. Since then, the city has met with the developers regarding their proposals for LIHTC projects.
The LIHTC program was started in 1986 as a Federal subsidy that assists in developing affordable rental housing. The U.S. Department of Housing and Urban Development (HUD) regulates the LIHTC program; locally, the Texas Department of Housing and Community Affairs (TDHCA) administers the program.
In Texas, the LIHTC assists in adding to the state’s affordable housing supply, ensures they are well operated and maintained, and prevents shifts toward the wealthier demographic, or gentrification.
Developers are awarded federal tax credits that reduce debt they must borrow to build. In turn, developers must pass the savings to residents by providing affordable rents.
Tax credits fall under two mediums: Four percent and nine percent. Where four percent is awarded to developments that have tax-exempt bonds, nine percent tax credits are competitive, and are judged on a scoring system by the TDHCA, which allocates funds from a fixed
Sparks said all three developers are looking into the nine-percent category.
Proposed projects must meet guidelines to become eligible. They include operating under rent and income restrictions for 30 years, with the developer adhering to one of two income thresholds.
Those thresholds are the 20-50 and 40-60 rules, which state at least 20 or 40 percent of units must have rent restrictions, with household incomes at or below 50 or 60 percent of the HUD’s median income.
According to statistics compiled by Buda staff, the median income in Hays County is $73,200. The state’s non-metro median income is $50,500.
Based on these numbers, a family of four under the 20-50 rules would have to make less than $39,050 to qualify for low income housing; 40-60 under $46,860.
While the prospect of growing the city’s population is enticing, it also elicits some concern from city leaders.
Straining city services was one issue addressed by Mayor Todd Ruge. He felt the addition of such housing would place stress on city infrastructure, as well as the police force.
“Buda’s population was once 7,200; it’s now over 10,000,” Ruge said. “Since 2010, the police department has only added four people.”
He was also concerned over the perception of the housing by Buda residents. Specifically, those who feel low-income housing could lower property values.
It’s a notion debunked by Jorge Aguirre, vice president of development at Piscerne Real Estate.
With the group working in 20 states and Puerto Rico, Aguirre said such assertions are a “misconception.” He said people often misalign low-income housing with Section 8 housing—a government voucher program to help individuals find housing with very limited incomes.
“We bring a value to the community,” Aguirre said. “We generate tax revenue for all taxing authorities.”
Some developers have received push back from cities. Kecia Boulware, project manager at AmTex Housing, has seen such tactics.
“It’s a fear of the unknown,” Boulware said. “But it’s our philosophy to design developments that sit within local fabrics with respect to architecture, amenities, and site access.”
In Buda, four developments fall under a form of the LIHTC program. Three of those, Creekside Villas, Huntington Estates and Onion Creek Village, are age-restricted. Only the Tuscany Park at Buda Apartments is open to any low-income qualified individuals.
Why Buda?
For Aguirre, it’s to tap into the rapidly growing housing market.
“[Buda] is what we believe is the biggest growth corridors of the state,” Aguirre said.
Discussions now focus on where these could be placed. Initial locations discussed are near the Robert S. Light overpass.
However, Sparks said more time is needed to fully evaluate options.
“We’ll evaluate how it look in terms of [our] plans,” Sparks said. “We’ll then get council’s feedback…and any information about each site.”
